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Indian Law Applibable to Proceedings - Consequences

4.1 Arbitrator - Qualifications and Capacities

    The Indian law does not lay down any specific qualifications for arbitrators. Every person who is of age and of sound mind can be appointed as an arbitrator. Arbitral institutions include in their panel a wide range of experts drawn from various professions, trade and business. Their impartiality is ensured by the Arbitration Committee of the institution which takes care that persons are chosen for their knowledge, experience, impartiality and integrity. Some arbitral institutions conducting international arbitration in India have included in their panel of arbitrators foreigners also, in order to enable foreign parties to choose arbitrators of other nationalities whom they consider more suitable.

New Law

    Section 11(1) and 11(2) of the new Act impliedly continue the above position. The provisions for challenge to the appointment of arbitrator are new. Section 12 provides that the arbitrator before accepting his appointment shall disclose in writing to the parties such matters as are likely to give rise to justifiable doubts about his independence or impartiality.

    The appointment of an arbitrator may be challenged only if :

    1. circumstances exist that give rise to justifiable doubts about his independence or impartiality, or



    2. he does not possess the qualifications agreed to by the parties.


    A party may challenge the appointment of an arbitrator only for reasons of which he becomes aware after the appointment has been made.

4.2 Appointment of Arbitrators and Composition of Arbitral Tribunal
  1. The number of arbitrators to be appointed was to be determined by the agreement of the parties. If the agreement was silent about it, the law was that a sole arbitrator would be appointed.


  2. If the parties had provided for a sole arbitrator to be appointed by mutual consent and they did not agree or concur in the appointment after the dispute had arisen, any party could serve on the other party a written notice to concur in the appointment made by him. If there was no agreement within 15 days of the notice, the court might on application by that party, make the appointment after giving the other party an opportunity to be heard (Sections 8 and 9 of 1940 Act).


  3. Where the agreement was for the appointment of two arbitrators and one of the parties failed to appoint the arbitrator, the other party might serve on the defaulting party notice to appoint the arbitrator. If within 15 days, the other party had not done so, the party might appoint his arbitrator as sole arbitrator and he would be deemed to have been appointed as sole arbitrator by consent.

    If the reference was to an even number of arbitrators, the arbitrators had to appoint an umpire not later than one month from the latest date of their respective appointment. If the umpire was not appointed by the arbitrators, the court was empowered to make the appointment even after the expiry of one month.


  4. The parties might also provide in the agreement that the arbitrator should be appointed by a designated person or by the holder of a specified office in an organization.


  5. When there was a vacancy because of a neglect to appoint an arbitrator or neglect of the arbitrator appointed to act or because of death or incapacity or of resignation by the arbitrator, a substitute arbitrator might be appointed by the party originally appointing the arbitrator or on his failure by the court.


  6. If the arbitration agreement provided that the arbitration should be conducted in accordance with the rules of an arbitral organisation, the number and mode of appointment of arbitrators would be determined in accordance with the rules of the organization.


  7. The number and mode of appointment of arbitrators in international arbitration was generally agreed to by the parties in the arbitration clause or the submission clause. When the arbitration was under the auspices of an arbitral organization, the appointment of arbitrators would be governed by the rules of that organization.

New Law
  1. Section 10 of the new Act provides for the number of arbitrators. The parties are free to determine the number of arbitrators provided that such number is not an even number. If the parties have failed to provide for the number of arbitrators, Section 10 provides that an arbitral tribunal shall consist of a sole arbitrator.

  2. Section 11 contains provisions regarding the procedure for appointment of arbitrators. A person of any nationality may be an arbitrator unless otherwise agreed to by the parties. The parties are free to agree on a procedure for appointment of an arbitrator or arbitrators.

  3. Failing any such agreement, in an arbitration with three arbitrators, each party will be entitled to appoint one arbitrator and the two appointed arbitrators shall appoint a third arbitrator who shall act as the presiding arbitrator. If a party fails to appoint an arbitrator within 30 days from the receipt of a request to do so from the other party or if the two appointed arbitrators fail to agree on the third arbitrator within 30 days from the date of their appointment, the appointment shall be made upon request of a party by the Chief Justice or his designate [See Sections 11(3) and 11(4)].

  4. In an arbitration with a sole arbitrator and in the absence of agreement as to procedure for appointment if the parties fail to agree on the arbitrator within 30 days from the receipt of a request by one party from the other party to so agree, the appointment shall be made, upon request of a party, by the Chief Justice or his designate. [See Section 17(2) and 17(5)].

  5. Where under an appointment procedure agreed upon by the parties

    1. a party fails to act as required under that procedure; or

    2. the parties or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

    3. a person, including an institution, fails to perform any function entrusted to him or it under that procedure;

    a party may request the Chief Justice or any person or institution designated by him to take the necessary measures, unless the agreement on the appointment procedure provides other means for securing the appointment. The decision of the Chief Justice or his designate is final. The Chief Justice or his designate in appointing the arbitrator shall have due regard to the qualifications required of the arbitrator by the agreement of the parties and other considerations as are likely to secure the appointment of an independent and impartial arbitrator. [See Section 11(6)]


  6. In the case of appointment of sole arbitrator or third arbitrator in an international commercial arbitration, the Chief Justice of India or his designate may appoint the arbitrator of a nationality other than nationalities of the parties where the parties belong to different nationalities. [Section 11(9)]

  7. Under Section 11(10), the Chief Justice may make such scheme as he considers appropriate, for dealing with the matters entrusted to him under the section.

  8. Where more than one request has been made to the Chief Justice of different High Courts or their designates, the Chief Justice or designate to whom the request has been first made shall alone is competent to decide on the request. [See Section 11(10)]

In an international commercial arbitration, only the Chief Justice of India (or his designate) will have the power to make the appointment and not the Chief Justice of the High Court. The provisions regarding the powers conferred on the Chief Justice of the High Court and the Chief Justice of India are new. The power of the court to appoint has now been entrusted to the Chief Justice of the High Court and (in International Commercial Arbitration) to the Chief Justice of India.

The considerations to be kept in mind by the Chief Justice are set out in section 11(8) of the new Act. 4.3 Duties and Responsibilities of Arbitrators
  1. An arbitrator should be fair and absolutely impartial. He should have no bias and should decide the dispute referred to him in a judicious manner and not capriciously or whimsically. The terms of reference under the arbitration agreement should be strictly followed.

  2. He should not disregard the principles of natural justice. He must have scrupulous regard to the ends of justice. He should have no interest, direct or remote, in the subject matter of the dispute or in any of the parties and should not act as an advocate of the party appointing him.

  3. He should not misconduct himself or the proceedings. Failure to perform essential duties of an arbitrator is deemed to be a misconduct.

  4. He should not accept any illegal gratification or receive any pecuniary inducement which may affect the fair determination of the matters submitted for arbitration.

  5. An arbitrator should not engage in private discussion or conference with one of the parties on any matter connected with the case, in the absence of the opposite party.

    When there are two or more arbitrators, every stage of the proceedings must be conducted in the presence of all the arbitrators. Every judicial act must be performed after due notice to the parties. However, arbitrators may delegate some ministerial matters and functions to one of them or to a third person.

  6. An arbitrator must give the parties notice of hearing and sufficient opportunity to present their case. Both the parties must be given equal opportunity to produce evidence and to put forward their case.

  7. The arbitrator is entitled to proceed ex parte if it is clear that the party to whom reasonable notice has been given does not appear or if there is clear indication that he has no intention of appearing.

New Law

    Section 13 of the new Act contains detailed provisions as to challenge of arbitrators.

    As regards notice to the parties, section 24 provides that parties shall be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the inspection of documents, goods or other property.

    The new Act has expressly provided for several matters to be decided by the arbitrator. Some of the important provisions in this regard are contained in section 19(3), section 20(2), section 22(2), section 23(1), section 24(1), section 25, section 26(1), section 27(1) and so on.

4.4 Arbitratorís Power

4.4.1 Arbitrators's jurisdiction ó decision as to jurisdiction

    The validity of an arbitration agreement depended on the decision of the arbitrator. But the power of the arbitrator to decide the question of the existence of the arbitration agreement and on his jurisdiction to act was not taken away by a mere denial of the existence of the arbitration agreement which might be done mainly to thwart arbitration. It is the arbitration agreement which gives jurisdiction and not its denial or acceptance. The arbitrator could decide whether he had jurisdiction in terms of the agreement. An aggrieved party might apply to the court for decision on the existence or otherwise of the arbitration agreement. This question could be agitated by a party even before the appointment of the arbitrator.

New Law

    Section 16 empowers the arbitral tribunal to rule on its jurisdiction.

    1. Under the new Act the arbitral tribunal can rule on its jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement and for that purpose;

      1. an arbitration clause which forms part of a contract will be treated as an agreement independent of the other terms of the contract, and

      2. a decision by the arbitral tribunal that the contract is null and void will not entail ipso jure the invalidity of the arbitration clause.

    2. A plea that the arbitral tribunal does not have jurisdiction will, however, have to be raised not later than the submission of the statement of defence. However, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of an arbitrator.

    3. A plea that the arbitral tribunal is exceeding the scope of its authority has to be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.

    4. The arbitral tribunal may, in either of the cases, referred to above, admit a later plea if it considers the delay justified.

    5. The arbitral tribunal has to decide on a plea about lack of jurisdiction or exceeding the scope of its authority and where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.

    6. A party aggrieved by an arbitral award is free to make an application for setting aside the award under Section 34.

4.4.2 Interim measures

    The parties may feel the need for safeguarding interim custody, preservation, protection, storage, sale or disposal of the whole or part of the subject matter of the dispute or for its inspection or for samples to be taken. Such matters had to be referred to the Court under Second Schedule to the Indian Arbitration Act.

New Law

    The new Act enables the court to take interim measures in section 9, and the arbitrator in section 17. Section 31 (6) also empowers the arbitrator at any time during the arbitration proceedings to make an interim arbitral award on any matter with respect to which the arbitrator may make a final award.

4.4.3 Expert Advice

    The arbitrator was generally presumed to have the power to consult any person having special knowledge of the discipline relating to subject matter of the reference or any expert such as a qualified accountant or solicitor. But such advice had to be disclosed to the parties with opportunity to rebut it.

New Law

    Section 26 of the new Act empowers the arbitrator to appoint experts, unless otherwise agreed by the parties. This section also provides that the expert shall on the request of the party make available to that party for examination, all documents, goods or other property in the possession of the expert with which he was provided in order to prepare his report.

    The Act does not elaborate the type of the issues for which an expert could be appointed. Questions of a scientific or technical nature will obviously fall within the scope of this provision.

4.4.4 Power to issue interrogatories

    The arbitrator could administer oath to the parties and witnesses. He could issue interrogatories to the parties, if he thought it necessary.

New Law

    There is no direct provision on this matter in the new Act, evidently because section 27 of the new Act enables a tribunal to avail of the assistance of a court in taking evidence.

4.4.5 Arbitrator's Power to Act as Amiable Compositeur

    An arbitrator could not decide as 'amiable compositeur' or give any decision according to what he thinks was just or reasonable. He had to decide according to law.

New Law

    Section 28(2) of the new Act recognises such a power, provided the parties have expressly authorised the arbitrator to decide as above.

4.4.6 Stating a Special Case

    The arbitrator had power to state a special case for the opinion of the court on any question of law. He could also state the award in the form of a special case for seeking the opinion of the court.

    In such a case, the court would give its opinion and complete the award. This power could be exercised by the arbitrator on his own motion or at the request of either party to the dispute. The arbitrator, however, was not bound or obliged to accept such a request.

New Law

    The new Act has dropped this procedure and there is no such power under the new Act.

4.5 Resignation

    Once an arbitrator has been appointed by a party, his authority could not be withheld or revoked, except when power had been reserved in the agreement or with the assistance of the court. An arbitrator who has accepted the appointment could, however, resign.

New Law

    Provisions for the termination of the mandate of an arbitrator have been made in the new Act. The mandate of an arbitrator shall terminate if (a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and (b) he withdraws from his office or the parties agree to the termination of his mandate. If the controversy remains on the question whether an arbitrator has become unable to perform his functions or has failed to act without undue delay, the party may apply to the court to decide on the termination of the mandate.

    By virtue of section 14, if an arbitrator withdraws from his office or a party agrees to the termination of a mandate of an arbitrator, that shall not imply acceptance of the validity of any ground of objection. Section 15 states the circumstances in which the mandate of an arbitrator shall terminate. These are :-

    1. where he withdraws from office for any reason; or

    2. by or pursuant to agreement of the parties. To a certain extent Sections 14 and 15 overlap.

    Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. Where an arbitrator has been replaced, he may hold hearings afresh or may start from the point left by the previous arbitrator. Merely because there has been a change in the composition of the arbitral tribunal, the order or ruling of the previous arbitral tribunal shall not be invalid.

4.6 Challenge to the appointment of arbitrator

    There were no provisions in the Arbitration Act, 1940 as to the circumstances under which the appointment of an arbitrator could be challenged. The rules of some arbitral organizations provided that an arbitrator had to discuss any kind of interest or presumptive interest in the subject matter of the reference and whether he was interested in any manner in any of the parties to the dispute.

New Law

    Section 13 deals with the procedure for challenging the appointment of an arbitrator. The party who intends to challenge the appointment may, within 15 days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances giving rise to justifiable doubts as to his independence or impartiality, send a written statement of the reasons for the challenge to the arbitral tribunal. The arbitral tribunal is given the power to decide on the challenge unless the arbitrator himself withdraws from his office or the other party agrees to the challenge. If the challenge is not successful, the arbitral tribunal shall continue the proceedings and make the award. After the award has been made the party challenging the appointment of the arbitrator can make an application for setting aside the award under Section 34. If the court sets aside the award, it will also decide as to whether the arbitrator who was challenged, is entitled to any fees or not.

4.7 Removal of arbitrator

    An arbitrator could be removed by the court if he did not proceed with the reference with reasonable despatch. He could also be removed if he had misconducted himself or the proceedings.

New Law

  1. The mandate of an arbitrator can be terminated under Section 14(1) of the new Act, if the arbitrator becomes de jure or de facto unable to perform his duties.

  2. In case a controversy arises on the above point, the matter is decided by the court under Section 14(2).

4.8 Arbitration proceedings

4.8.1 Domestic arbitration

    In non institutional arbitrations, the arbitrators could adopt such procedures as were agreed to by the parties. Where the arbitration was under the Rules of an arbitral institution, those rules would apply to the conduct of arbitration, appointment of arbitrators, filing of pleadings, furnishing of oral and documentary evidence, hearing of parties and making of award. The rules, however, could not violate the mandatory provisions of the Act.

New Law

    The above position, in substance, survives under the new Act.

4.8.2 International arbitration

    The rules of the organization which the parties had agreed to would apply. These rules might be of a domestic arbitral institution or of a foreign organization. The rules of a foreign organization should not, however, be opposed to any mandatory provisions of Indian law, if the arbitration was to be held in India. If the award was pronounced outside India, its enforceability in India was subject to the provisions of the enactments relating to foreign awards.

4.8.3 Non-Institutional Arbitration - Commencement

    The Act of 1940 did not contain any direct provision as to when the arbitration was said to commence. The First Schedule to the Act (where it spoke of the arbitrator entering on the reference) had created considerable controversy in this regard. According to many High Courts the arbitration commenced when the arbitrator took the decision for holding the first hearing.

New Law

    In the new Act, section 21 provides that (in the absence of an agreement between the parties) the arbitral proceedings commence on the date on which the respondent receives the request for referring the matter to arbitration.

4.8.4 Written pleadings

    After the appointment of the arbitrator, the parties usually exchanged pleadings, claims, counter-claims, rejoinders, documents, etc., on which they relied, according to the directions of the arbitrator. In simple cases, written statements of the parties might be sufficient. In complicated cases, parties might take the help of legal counsel for the preparation of pleadings. This was as per the usual practice. The Arbitration Act, 1940 did not contain any detailed rules as to pleadings etc.

New Law

    Section 23 makes detailed provisions as to statements of claim and defence. Section 23(1) provides that within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim points at issue and relief sought. The respondent must then state his defence.

    Section 23(2) provides that the parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

    Section 23(3) further provides that unless otherwise agreed by the parties, either party may amend or supplement the claim or defence during the course of the arbitral proceedings. But the arbitral tribunal may disallow the prayer for amendment on the ground of delay.

4.8.5 Hearing of the parties to the arbitration

    If the parties so agreed, the arbitrator decide the dispute on the basis of written submissions and documents filed. If a hearing was required by the parties or the arbitrator thought a hearing was necessary, he fixed the time, date and place of the hearing. The parties then made their submissions by themselves or by their representatives, who might or might not be legally qualified persons.

4.8.6 Evidence of witnesses

    If the parties wish to adduce oral evidence, they and their witnesses were permitted to do so. The arbitrator had power to administer oath or affirmation to the witness. As per practice witnesses were examined and cross-examined.

New Law

    In the new Act, Section 24(1) provides for hearings and written proceedings before the arbitral tribunal. The arbitral tribunal shall decide, (unless otherwise agreed by the parties) whether to hold oral hearings for the presentation of evidence or for oral arguments or whether the proceedings shall be conducted on the basis of documents and other materials etc.

4.8.7 Inspection by arbitrator of the subject matter of dispute

    As per practice, if the arbitrator desire to make an inspection of the subject matter of the dispute, he could do so after giving the parties an opportunity to be present at the inspection.

New Law

    The procedure is to continue under the new Act.

4.9 The Arbitral Award

4.9.1 The time limit for making the award

    The arbitrator had to make the award within four months after entering on the reference or having been called upon to act by notice in writing by any party, unless the agreement gave a different time schedule. The arbitrator entered on the reference when he first applied his mind to the dispute. The parties could, however, extend the time before the expiry of four months. Failing such an agreement, the court on the application of any party could extend the time.

New Law

    The new Act does not lay down any time limit as such for completing the arbitration. However, under Section 14 an arbitrator's mandate can be terminated if he fails to act without undue delay "which means in effect if he is guilty of undue delay".

4.9.2 Content and form of the award

4.9.2.1 Reasons in support of the award

    Under the old law, it was not necessary for an arbitrator to state the reasons for the award. Reasons were given if parties by their agreement expressly desired that reasons be given.

    In domestic arbitrations, the arbitrator often preferred not to give reasons, because if the reasoning was based on a legal proposition which was erroneous, it was liable to be set aside as an award containing an error of law on the face of it.

    In International arbitrations, the arbitrator generally gives the reasons. The Rules of some arbitral institutions provide for giving the reasons in international cases, unless the parties desire that reasons need not be given.

New Law

    Section 31(3) provides that the award must state the reasons unless the parties dispense with it or unless the award is on agreed terms under Section 30.

4.9.2.2 Award by consent

    If the parties arrived at settlement of the dispute by common agreement during the course of arbitration proceedings and the arbitrator was satisfied that such agreement was genuine and not arrived at to defeat the purpose of any law, he could render an award as per the agreement of the parties. This was the existing practice, though the old Act was silent.

New Law

    Section 30 expressly recognizes the liberty of the parties to come to a settlement. The arbitrator, if satisfied about the genuineness and validity of the settlement has to give an award in terms of the settlement. In fact Section 30 further envisages that the arbitrator may encourage efforts at settlement.

4.9.2.3 Interim Award

    Unless there is an agreement to the contrary between the parties and depending upon the nature of the dispute, the arbitrator could make an interim award. An interim award has the same sanctity as final award. If it was not complied with, it could be enforced through the court by the same procedure as in the case of final award (S 27).

New Law

    Under Section 31(6), the arbitrator may make an interim award on any matter on which final award may be made.

4.9.3 Notification of making of the award

    The arbitrator had to inform the parties about the making and signing of the award.

New Law

    Section 31(5) provides that after the award is signed, copy will be given to each party.

4.9.4 Making of the award

    All the arbitrators need not sign the award at the same time or place or in the presence of each other. It is not necessary for the parties to be present when the award is made. The award in practice mentions the place where it was made and its date and it bore the signatures of the arbitrators. (The proposition states the position as usually understood).

New Law

    Section 31 lays down the requirements of the form and contents of arbitral award as follows:-
    1. An arbitral award shall be made in writing and shall be signed by the member of the arbitral tribunal.

    2. For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.

    3. The arbitral award shall state its date and the place of arbitration as determined in accordance with Section 20 and the award shall be deemed to have been made at that place.

4.9.5 Award by majority

    An award was required to be signed by the arbitrator to give its validity. Where there were more than two arbitrators, then unless the arbitration agreement provided for a unanimous decision, the award would have to be the decision of the majority. When an arbitrator differed from the majority decision, he could attach his dissenting opinion to the majority decision (though it was not obligatory). If any of the arbitrators refused to sign, that fact was mentioned by the majority of the arbitrators making the award by majority opinion.

    If no majority was possible then (unless there is an agreement to the contrary) there could be no award which could be acted upon. The arbitration rules of some organizations provide that in the absence of a majority opinion, the award of the Chairman will prevail.

New Law

    Section 29(1) provides that unless otherwise agreed by the parties, the decision of the arbitral tribunal shall be made by a majority of all its members.

4.9.6 Filing of the award
  1. The arbitrator could file the award himself or cause the award to be filed in the court having jurisdiction in the matter through a person authorized in that behalf (Section 14). The court having jurisdiction was the court which the parties would resort to, if the dispute had been the subject matter of a suit instead of being referred to arbitration. If the arbitrator did not file the award in court, either party could apply to the court within 30 days of the notice of the award for directing the arbitrator to file the award.

  2. After the award is filed, either suo moto by the arbitrator or on an application by the parties, the court would issue notices to the concerned parties. Any of the parties could within 30 days time file objections, if any, to the court. If no objections were filed or if they were filed and the court saw no cause to remit the award on any of the matters referred to arbitration for reconsideration or to set aside the award, it would pronounce judgement according to the award. Upon the judgement so pronounced a decree would follow. No appeal lay from such a decree except on the ground that it was in excess of or otherwise not in accordance with the award (S.17).

New Law

    Sections 34, 35 and 36 deal with these matters. Section 34 deal with the applications for setting aside the arbitral award. It provides that an application for setting aside the award may not be made after three months have lapsed from the date on which the party making that application has received an award on ground specified in the clause.

    Section 35 provides that an arbitral award shall be final and binding on the parties and persons claiming under them. Section 36 provides that where the time for making the application to set aside an arbitral award has expired, or where such application has been refused by the court, the award shall be enforced as if it were the decree of the court. Under the new Act, it will not be necessary to make the award a rule of the court and to pass a decree in terms of the award, as is mandatory under the repealed law.

4.9.7 Power to award Interest

    The Supreme Court held in Secretary to the Government of Orissa Vs. Raghunath Mahapatra (1992), CLA 54 that even under the old Act the arbitrator could award interest from the date of submission to arbitration to the date of the award. Section 31 sub-section (8) of the new Act empowers the arbitrator, in a monetary award, to include interest on the amount awarded, unless otherwise agreed by the parties. The provision in the new law is far reaching, because the power is expressed as covering "the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made." Thus, the arbitrator's power extends to the pre-arbitration period, as also to the period for which the arbitration remained pending. After the date of the award, section 31(8)(b) takes over and unless the award otherwise directs, the awarded sum shall carry interest at the rate of 18 percent per annum from the date of the award to the date of payment.

4.9.8 Correction of the award by the arbitrator

    After the arbitrator has made the award, he becomes functus officio, that is to say he ceases to function thereafter with reference to the arbitration. However, if there is no agreement to the contrary, he may correct in an award, at any time after the award has been made, any clerical mistake or error arising therein by an accidental slip or omission (S.13).

4.9.9 Stamp duty on award

    An award has to be stamped with requisite stamp duty. The rates of stamp duty vary from State to State. If the award is not stamped or is not adequately stamped, it may be admitted in evidence after payment of proper stamp duty together with the penalty prescribed under the Stamp Act. This subject is outside the Arbitration Act and falls within the Stamp Act.

New Law

    Stamp Duties are dealt with in the Indian Stamp Act, 1899 and not in Arbitration Act, 1940. After the new Act, the stamp duties levied by various States will continue. The new legislation contains no provision on the subject (Just as the old Act also contained no provision on the point).

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