Introduction

1.1. Arbitration is one of the most effective and most preferred Alternative Dispute Resolution (ADR) mechanism for corporates and businesses not only in India, but across the globe. As the Courts are overburdened with cases, therefore, the entire process of litigation is very time consuming and the parties not only have to incur huge financial expenses in prosecuting their cases, but at times they also undergo mental and physiological stress due to complex legal procedures and procedural technicalities involved in the cases.

1.2. In modern era since trade and commerce is being carried out both within the country and also across the borders, it is always advisable for the parties that while reducing their rights and obligations arising out of the contract/instrument in writing they must incorporate an arbitration clause/agreement for the speedy resolution of any dispute arising between them.

1.3. However if the agreement/contact/instrument between the parties containing the arbitration clause is either unstamped or insufficiently stamped such contract or agreement will not be admission in evidence as per the provisions of Section 35 of the Indian Stamp Act, 1899 which inter alia provides “no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped”

2.1. An instrument which is unstamped or insufficiently stamped is inadmissible in evidence and cannot be acted upon legally. The primary issue that is the subject matter of the present article is “whether the arbitration clause/agreement incorporated in an insufficiently stamped or un-stamped agreement will also become non-existent, unenforceable, or invalid if the underlying contract is not stamped?”