AN ARBITRATION AWARD RECORDING SETTLEMENT DOES NOT REQUIRE STAMP DUTY OR REGISTRATION

Channulal Chandrakar –vs- Chhangalal & others 2012(2)Arb.LR 18 (DB) Chhattisgarh

The parties to the arbitration agreement were real brothers, who entered into arbitral agreement for distribution/partition of the movable and immovable properties.  The parties had appointed Arbitrators, who had passed an Award.  The Award was challenged on the ground that it was not properly stamped and was not registered under Section 17 of the Indian Registration Act, 1908.   The award was set aside   against which an appeal was preferred before the Division Bench.  The Division Bench has set aside the order of Court below and passed a judgment in terms of the Arbitral Award as provided under Section 17 of Arbitration Act, 1940.  While passing the judgment in terms of the Award, the Division Bench has held that the Court below should not have entertained the application to set aside the Award as it was barred by limitation.  The Division Bench has further held,  by relying upon the  judgment of Apex Court, in the case of N. Khadervali Sagar (Dead) by LRs  –vs- N. Gudu Sahib (Dead) 2003(1) Arb. LR 647 (SC) wherein it was held that the document which records the settlement, an award, does not require registration under Section 17 of the  Registration Act, 1908 since the document does not transfer or assign interest in any asset and hence there is no question of payment of stamp duty.  In the instant case, it was held that  since it was the settlement of the properties between parties who were real brothers, no stamp duty or registration was required.

BY

D. SARAVANAN

CHAIRMAN

COUNCIL FOR NATIONAL AND INTERNATIONAL COMMERCIAL ARBITRATION (CNICA)