The Delhi High Court has laid down the procedure to be followed by the court registry when an insufficiently stamped domestic arbitral award is presented for enforcement [URC Construction Vs Airport Authority of India]

Justice Om Prakash Shukla held that unilateral payment of the stamp-duty shortfall more than one month after an award is signed will not cure the defect. Such an award must be impounded and dealt with under the Indian Stamp Act, 1899.

An enforcing court cannot waive or reduce the penalty payable for insufficient stamping, the judge made it clear.

“Enforcement of an arbitral award is not the chargeable event envisaged by the Stamp Act. Instead, execution/signing of an award is when stamp duty is attracted,” the Court held.

The Court further ruled that domestic arbitral award attracts stamp duty when it is signed and not when it is sought to be enforced.

The Court issued the following procedural directions to deal with enforcement petitions.

• Every enforcement petition must disclose the date of the award, date of payment of stamp duty, amount awarded and duty payable;

• Proof of sufficient stamp duty and registration, wherever applicable, must be annexed;

• The Court registry must not list a petition lacking such proof;

• Petitions filed on or before August 13, 2026 involving insufficiently stamped awards must be placed before the Joint Registrar;

• Petitions filed after August 13 must be returned under objections and placed before the Joint Registrar for impounding;

• Such petitions must not be dismissed merely for deficient stamping, and existing interim orders must continue until the defect is cured; and

• The petition may be listed before the Court after the requirements under the Stamp Act are satisfied.

The ruling came in an enforcement petition filed by URC Construction Private Limited against the Airports Authority of India (AAI). The company sought enforcement of a March 2019 arbitral award granting it approximately ₹2.59 crore, along with pendente lite and future interest at 10 percent.

The award initially carried stamp duty of ₹100. The company subsequently deposited deficient stamp duty of ₹25,850 after filing the enforcement petition.

The Court held that the subsequent unilateral payment did not, by itself, cure the defect. It said the award must be impounded under Section 33 of the Stamp Act and endorsed after compliance with the statutory procedure.

It further clarified that the three-month period available to challenge an award under Section 34 of the Arbitration and Conciliation Act, 1996 does not postpone the obligation to pay stamp duty.

“The three-month (and an additional thirty days) window under Section 36 of the Arbitration Act does not grant exemption from the requirement of stamp duty,” the judgment stated.

The Court further held that an enforcing court cannot waive or reduce the penalty prescribed for deficient stamping. The Collector of Stamps, however, has discretion over the quantum of penalty.

The bona fide pendency of a challenge under Section 34, an appeal under Section 37 or a special leave petition before the Supreme Court could be a ground for the Collector to waive the penalty or impose a minimal amount, the judgment added.

The Court said two routes are available when an insufficiently stamped award is produced for enforcement. The enforcing authority may collect the deficient duty and statutory penalty before acting upon the award. It must then send an authenticated copy of the award, a certificate and the amount collected to the Collector.

If the decree-holder refuses to pay, the original award must be impounded and sent to the Collector.

“To do away with another adjudication altogether, the Court may proceed under Section 35 read with Section 38(1) and act upon the instrument upon payment of deficit duty and penalty,” the Court said.

In the present case, the Court impounded the award and directed URC to produce the original before the Joint Registrar. It requested the Collector to complete the process preferably within six weeks.

URC was represented by advocates Vikas Mehta and Nitika Grover

AAI was represented by Standing Counsel Digvijay Rai and Advocate Archit Mishra.

[Read Judgment]