Validity of arbitration agreement embedded in unstamped contract: Senior Advocate Gourab Banerji appointed amicus

The Supreme Court on Thursday appointed Senior Advocate Gourab Banerji as amicus curiae in a Constitution Bench case dealing with the validity of an arbitration agreement embedded in unstamped contracts. (NN Global Mercantile Pvt Ltd v. Indo Unique Flame Ltd and ors).The Bench of Justices KM Joseph, Ajay Rastogi, Aniruddha Bose, Hrishikesh Roy and CT Ravikumar posted the matter for hearing on December 6.The Court is considering the following question:“Whether the statutory bar contained in Section 35 of the Indian Stamp Act, 1899 applicable to instruments chargeable to Stamp Duty under Section 3 read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent, un-enforceable, or invalid, pending payment of stamp duty on the substantive contract/instrument?”.The reference to a five-judge Bench was necessitated given the decision of the top court in NN Global Mercantile Pvt Ltd v. M/s Indo Unique Flame Ltd, in which it had held,"The arbitration agreement would not be rendered invalid, un-enforceable or non-existent, even if the substantive contract is not admissible in evidence, or cannot be acted upon on account of non-payment of Stamp Duty."In doing so, the three-judge Bench of Justices DY Chandrachud, Indu Malhotra and Indira Banerjee had doubted the correctness of the two-judge Bench decision in Vidya Drolia & Ors v. Durga Trading Corporation, and accordingly stated,"We consider it appropriate to refer the following issue, to be authoritatively settled by a Constitution bench of five judges of this Court.".Banerji is a former Additional Solicitor General, known for international arbitration.The Supreme Court had in 2020 also appointed him amicus in determining the applicability of Malaysian laws in Vedanta's foreign award when the contract provided for Indian laws to govern the contract..[Read order]