The Supreme Court on Tuesday stayed a Delhi High Court order directing the impounding of insufficiently stamped domestic arbitral awards presented for enforcement. [URC Construction Vs Airport Authority of India]
A Bench of Justices KV Viswanathan and Arun Palli stayed the September 1 order of the High Court which had laid down the procedure to be followed by the High Court registry while dealing with enforcement petitions involving insufficiently stamped arbitral awards.
The Court also stayed a separate order passed by the Delhi High Court on September 7 in another enforcement proceeding.
However, the Bench clarified that the pendency of the proceedings before the Supreme Court would not prevent the High Court from continuing with the execution proceedings.
The Bench further directed that the practice directions issued by the Delhi High Court on July 13 concerning the payment of stamp duty on arbitral awards would continue to operate.
The September 1 ruling was delivered in an enforcement petition filed by URC Construction Private Limited against the Airports Authority of India (AAI).
The High Court held that a domestic arbitral award attracted stamp duty when it was signed and not when it was presented for enforcement.
It further ruled that unilateral payment of deficient stamp duty more than a month after the signing of an award would not cure the defect. Such an award would have to be impounded under the Indian Stamp Act, 1899.
The High Court had also directed its registry not to list enforcement petitions unless proof of payment of sufficient stamp duty was furnished.
It directed that petitions filed after August 13, 2026, involving insufficiently stamped awards be returned under objections and placed before the Joint Registrar for impounding.
For petitions filed on or before August 13, the High Court directed that cases involving insufficiently stamped awards be placed before the Joint Registrar.
The High Court also held that an enforcing court could not waive or reduce the statutory penalty for deficient stamping, although the Collector of Stamps could exercise discretion in determining the penalty.
Challenging these directions before the Supreme Court, the petitioners argued that the High Court's directions were contrary to Section 33 of the Stamp Act.
It was submitted that an instrument could be impounded only when it was produced before an authority competent to receive evidence and that authority found it to be insufficiently stamped.
The petitioners argued that officials of the High Court registry scrutinising enforcement petitions at the stage of numbering of cases could not be considered authorities competent to receive evidence under the Stamp Act.
They also pointed out that the stamping of the awards was consistent with the Delhi High Court's practice directions dated July 13, 2026.
The petitioners maintained that there was no occasion to direct impounding of the awards in view of these practice directions. They also questioned the validity of the other directions issued by the High Court.
The Supreme Court issued notice on the petitions and stayed the operation and effect of the September 1 and September 7 High Court orders until further orders.
Senior Advocate Sunil Kumar and advocates Vikas Mehta, Saurabh Suman Sinha, Mrigank Prabhakar, Yerradoddy Charvi Reddy, V Ganesan, Nitika Grover, Vaishnav Kumar, Vaishak Omanakuttan, Anshumaan Sahni and Anindita Mitra appeared for the petitioners.
Advocates Anshul Rai, Digvijay Rai, Archit Goel, SK Pandey, Chandrashekhar A Chakalabbi, Ojaswa Pathak, Mallika Ranjan and Raunaq Singh appeared for the respondents.
[Read Order]