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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   9515      of  2018 (ARISING OUT OF SLP (CIVIL) NO.13913 OF 2018)

M/S SHRIRAM EPC LIMITED …APPELLANT

VERSUS

RIOGLASS SOLAR SA …RESPONDENT

J U D G M E N T

R.F. NARIMAN, J.

1.  Leave granted.

2. The present appeal arises from the judgment of a Single Judge of the

High Court of Judicature at Madras, dated 09.02.2017, in which a petition

filed to enforce a foreign award was allowed. Several grounds were taken

before the learned single Judge. We are concerned with only one ground that

has  been  argued  before  us,  namely,  that  as  the  award  has  not  been

stamped, it cannot be enforced under Sections 48 and 49 of the Arbitration

and Conciliation Act, 1996 (“1996 Act”).  

3. The  brief  facts  that  are  necessary  for  determination  of  the  present

controversy are as follows:

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3.1. An  ICC  award  was  delivered  in  London  on  12.02.2015  by  Mr.

Christopher Style QC in the following terms:

“363. After  consideration  of  all  the  factual  and  legal submissions  which  have  been  presented  to  me  and  for  the reasons set out in full above, I award, declare and adjudge as follows:

(1) I  declare that I  have no jurisdiction over the Second and Third Respondents.  

(2) I declare that Rioglass is not obliged to issue a Performance Bank Guarantee as provided for in clause 6 of the Agreement, as amended by Amendment No.1.   

(3) I declare that Rioglass is entitled to sell as scrap the mirrors that it holds in storage in relation to Delivery Four.  

(4) I declare that Shriram acted in breach of the Agreement in the respects set out above.  

(5) I order Shriram to pay Rioglass €4,366,598.70, consisting of damages amounting to €4,151,570.52 and interest amounting to €215,028.18.”

3.2. Objections dated 21.07.2015 under Section 34 of the Arbitration and

Conciliation Act, 1996 were filed by the Appellant which were dismissed on

27.09.2016,  stating  that  a  petition  under  Section  34  would  not  be

maintainable  as  against  a  foreign  award,  citing  this  Court’s  judgment  in

Bharat  Aluminium  Co.  v.  Kaiser  Aluminium  Technical  Services  Inc.,

(2012) 9 SCC 552.  Meanwhile, the Respondent filed a petition under Section

47 of the 1996 Act, dated 05.08.2015, to enforce the said award. As stated

hereinabove, all objections to the said award were rejected by the learned

Single Judge on 09.02.2017. An appeal to the Division Bench resulted in an

Order dated 14.03.2018, stating that in view of Section 50 of the 1996 Act,

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the said appeal would not be maintainable. This is how the present SLP has

been filed against the decision of the learned Single Judge.  

4. Shri K.V. Viswanathan, learned senior advocate, appearing on behalf of

the Appellant, has submitted before us, that given the provisions of the Indian

Stamp Act, 1899, it is clear that a foreign award would be covered by the said

Act. This being so, and stamp duty not having been paid, the said foreign

award cannot be enforced. He relied strongly on a judgment of the Punjab

and Haryana High Court reported in  Gujrals Co. v. M.A. Morris, AIR 1962

P&H 167. According to him, the contrary judgments of the Delhi High Court

reported in Naval Gent Maritime Ltd. v. Shivanath Rai Harnarain (I) Ltd.,

(2009) 163 DLT 391, and the Madhya Pradesh High Court judgment reported

in Narayan Trading Co. v. Abcom Trading Pvt. Ltd., (2013) 2 MP LJ 252,

are incorrect. According to the learned senior advocate, the Delhi High Court

judgment is really a judgment on registration of a foreign award, even though

it purports to speak about stamp duty payable. The judgment of the Madhya

Pradesh High Court, on the other hand, is not correct in stating that a foreign

award would not be included within the term “award” under Schedule I of the

Indian Stamp Act,  1899. He relied upon the Gujarat  High Court  judgment

reported in  Orient  Middle East  Lines Ltd.,  Bombay and Anr.  v.  Brace

Transport  Corporation of  Monrovia and Ors.,  AIR 1986 Guj  62,  which

stated that Article III of the New York Convention would make it clear that

stamp  duty,  being  in  the  nature  of  fees  or  charges  for  recognition  and

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enforcement of a foreign award, can be enforced in accordance with the rules

of procedure of the territory in which the award is sought to be enforced. This

being so, the New York Convention itself recognizes that foreign awards may

have to bear stamp duty for enforcement in the country in which they are

sought  to  be enforced.  He further  relied upon the 194th Law Commission

Report, which had suggested changes insofar as stamp duty is concerned in

Part II of the 1996 Act.  

5. Learned counsel appearing on behalf of the Respondent, on the other

hand, relied strongly upon the judgment of the Delhi High Court as well as

the Madhya Pradesh High Court referred to hereinabove. According to the

learned counsel, the expression “award” which occurs in Schedule I of the

Indian Stamp Act, 1899 applies only to a domestic award and not a foreign

award. He relied on the fact that the Indian Stamp Act was enacted in 1899,

in which “award” has never been enlarged so as to include foreign awards

after the Arbitration (Protocol and Convention) Act, 1937 and/or the Foreign

Awards  (Recognition  and  Enforcement)  Act,  1961  were  enacted.  Also,

according to the learned counsel, the only requirement for the enforcement of

a foreign award is laid down in Section 47 of the Act, which does not require

the award to be stamped. A without prejudice argument was also made that

under Section 48(2)(b), even if a foreign award were required to be stamped,

but is not stamped, enforcement of such award would not be contrary to the

fundamental policy of Indian law.

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6. Having heard learned counsel for the parties, it is important to first set

out the relevant provisions of the Indian Stamp Act, 1899.  Section 1 of the

Indian Stamp Act, 1899 as it originally stood, reads as follows:

“1.  Short  title,  extent,  and  commencement.—(1)  This  Act may be called the Indian Stamp Act, 1899.

(2) It  extends to the whole of British India inclusive of Upper Burma,  British  Baluchistan,  the  Santal  Parganas,  and  the Pargana of Spiti; and

(3) It shall come into force on the first day of July 1899.”

Section 2(14) defines “instrument” as follows:

“2. Definitions.—

xxx xxx xxx

(14) “Instrument” includes every document by which any right  or  liability  is  or  purports to be created, transferred, limited, extended, extinguished, or recorded:”  

“Instruments chargeable with duty” are dealt with by Section 3.  Section 3

states as follows:

“3.  Instruments  chargeable  with  duty.—Subject  to  the provisions  of  this  Act  and  the  exemptions  contained  in Schedule I, the following instruments shall be chargeable with duty of  the amount indicated in that  Schedule as the proper duty therefore, respectively, that is to say—

(a) every instrument mentioned in that Schedule which, not having  been  previously  executed  by  any  person,  is executed in  India on or after the first day of July, 1899; (b)  every  bill  of  exchange  payable  otherwise  than  on demand or promissory note drawn or made out of   India on or after that day and accepted or paid, or presented for acceptance  or  payment,  or  endorsed,  transferred  or otherwise negotiated, in India; and

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(c)  every  instrument  (other  than  a  bill  exchange  or promissory note) mentioned in that Schedule, which, not having  been  previously  executed  by  any  person,  is executed out of  India on or after that day relates to any property situate, or to any matter or thing done or to be done, in India and is received in India:  

Provided that no duty shall be chargeable in respect of— (1) any  instrument  executed  by,  or  on  behalf  of,  or  in favour  of,  the  Government  in  cases  where,  but  for  this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument; (2)  any  instrument  for  the  sale,  transfer  or  other disposition,  either  absolutely  or  by  way  of  mortgage  or otherwise,  of  any  ship  or  vessel,  or  any  part,  interest, share or property of or in any ship or vessel,  registered under the Merchant Shipping Act, 1894, or under Act 19 of 1938, or the Indian Registration of Ships Act, 1841 (10 of 1841) as amended by subsequent Acts. (3)  any instrument  executed,  by,  or,  on behalf  of,  or,  in favour of, the Developer, or Unit or in connection with the carrying out of purposes of the Special Economic Zone.  

Explanation.—For the purposes of this clause, the expressions “Developer”,  “Special  Economic  Zone”  and  “Unit”  shall  have meanings respectively assigned to them in clause (g), (za) and (zc) of section 2 of the Special Economic Zones Act, 2005.”

Under  Sections  33  and  35,  instruments  that  are  not  duly  stamped  in

accordance with the provisions of the Act are inadmissible in evidence, and

any such instrument which is not duly stamped is liable to be impounded as

provided in Section 33 of the Act. Item No.12 of Schedule I  of the Indian

Stamp Act, 1899 reads as follows:

Description of Instrument Proper Stamp-duty

“12.  AWARD,  that  is  to  say,  any  decision  in  writing  by  an arbitrator or umpire, not being an award directing a partition, on a reference made otherwise than by an order of the Court in

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the course of a suit.—

(a) where the amount or value  of  the  property  to which  the  award  relates as set forth in such award does  not  exceed  Rs. 1000;

The  same  duty  as  a bond (No. 15) for such amount.

(b) in any other case. Five rupees.

Exemption

Award under the Bombay District Municipal Act, 1873 (Bom. Act 6 of 1873), Section 81, or the Bombay Hereditary Offices Act, 1874 (Bom. Act 3 of 1874), Section 18.”

7. The  main  bone  of  contention  in  the  present  appeal  is  whether  the

expression “award” would include a foreign award.  

8. In order to determine this question, it is important to see the state of the

law insofar as arbitration is concerned in the year of the Indian Stamp Act,

1899.  At  this  point  of  time,  there  were  two  sets  of  laws  dealing  with

arbitration. The first was contained in the Code of Civil Procedure, 1882. In

Part V, Chapter XXXVII spoke of reference to arbitration. Under Sections 506

to 522 of the Code of Civil Procedure, 1882, parties to a suit may apply for an

order of reference to arbitration, in which case, the arbitrator or umpire, as

the case may be, may deliver an award which ultimately may be enforced by

a judgment which is to be according to the award and a decree to follow. By

Sections 523 to 526, agreements to refer disputes to arbitration may be filed

in Court, and awards delivered thereon. Needless to add, the Civil Procedure

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Code, 1882 applied to British India.  

9. Close on the heels of the Indian Stamp Act, 1899, comes the Indian

Arbitration Act, 1899. As per Section 1(2) of this Act, this Act also extended to

the whole of British India, but Section 2 made it clear that the Act will apply

only in cases where the subject matter submitted to arbitration, if it were the

subject of a suit, could be instituted in a Presidency Town. Section 2 of this

Act states as follows:

“2. Application.—Subject to the provisions of section 23, this Act  shall  apply  only  in  cases  where,  if  the  subject-matter submitted  to  arbitration  were  the  subject  of  a  suit,  the  suit could,  whether  with  leave  or  otherwise,  be  instituted  in  a Presidency-town:

Provided  that  the  Local  Government,  with  the  previous sanction  of  the  Governor-General  in  Council,  may,  by notification  in  the  local  official  Gazette,  declare  this  Act applicable in any other local area as if  it  were a Presidency- town.”

Section 4 of the said Act states as follows:

“4. Definitions.—In this Act, unless there is anything repugnant in the subject or context,-  

(a) “the Court” means, in the Presidency-towns, the High Court, and, elsewhere, the Court of the District Judge; and

(b) “submission” means a written agreement to submit present or  future  differences  to  arbitration,  whether  an  arbitrator  is named therein or not.”

Section 11 then states:

“11. Award to be signed and filed.—(1) When the arbitrators

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or umpire have made their award, they shall sign it, and shall give notice to the parties of the making and signing thereof, and of  the  amount  of  the  fees  and  charges  payable  to  the arbitrators or umpire in respect of the arbitration and award.  

(2) The arbitrators or umpire shall at the request of any party to the submission or any person claiming under him, and upon payment  of  the  fees  and  charges  due  in  respect  of  the arbitration and award, and of the costs and charges of filing the award, cause the award, or a signed copy of it, to be filed in the Court; and notice of the filing shall be given to the parties by the arbitrators or umpire.  

(3) Where the arbitrators or umpire state a special case under section  10,  clause  (b),  the  Court  shall  deliver  its  opinion thereon; and such opinion shall  be added to,  and shall  form part of, the award.”

Section 15, which is important, states as follows:

“15. Award when filed to be enforceable as a decree.—(1) An  award  on  a  submission,  on  being  filed  in  the  Court  in accordance  with  the  foregoing  provisions,  shall  (unless  the Court  remits  it  to  the  reconsideration  of  the  arbitrators  or umpire, or sets it aside), be enforceable as if it were a decree of the Court.  

(2) An award may be conditional or in the alternative.”

10. On a reading of the aforesaid provisions of these Acts, it becomes clear

that the only “award” that is referred to in the Indian Stamp Act, 1899 is an

award that is made in the territory of British India provided that such award is

not  made pursuant  to  a reference made by an order  of  the Court  in  the

course of a suit. At this point in time, it is important to note that there were

several princely states in India governed by sovereign rulers which had their

own laws. Arbitration laws, if any, in the aforesaid princely states, if they were

to  culminate  in  awards,  would  not  be  “awards”  under  either  the  Civil

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Procedure  Code,  1882  or  the  Indian  Arbitration  Act,  1899.  They  would

therefore be foreign awards insofar as British India is concerned. An award

made in a princely state, or in a foreign country, if enforced by means of a

suit  in  British  India,  would  not  be  covered  by  the  expression  “award”

contained  in  Item 12  of  Schedule  I  of  the  Indian Stamp Act,  1899.  Only

awards which are decisions in writing by an arbitrator or umpire, made in

British India, on a reference made otherwise than by an order of the Court in

the course of a suit would be included.  

11. This position continued even when the Code of Civil Procedure, 1908

contained a Second Schedule,  which substituted the arbitration provisions

contained  in  the  Code  of  Civil  Procedure,  1882.  Here  again,  under  the

Second Schedule, parties to a suit may apply for an order of reference to

arbitration and an award would follow. Section 16 of the Second Schedule is

important, and states as follows:

“16. Judgment to be according to award.— (1) Where the Court sees no cause to remit the award or any of the matters referred to arbitration for re-consideration in manner aforesaid, and no application has been made to set aside the award, or the Court has refused such application, the Court shall,  after the time for making such application has expired, proceed to pronounce judgment according to the award.

(2)  Upon the judgment so pronounced a decree shall  follow, and no appeal shall lie from such decree except insofar as the decree is in excess of, or not in accordance with, the award.”

Under Sections 20 and 21, arbitration without the intervention of a Court is

referred to, and awards delivered in such cases are to be incorporated in a

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judgment by a Court, after which a decree is to follow, which decree then

becomes enforceable.  

12. Next in line, chronologically speaking, is the Arbitration (Protocol and

Convention)  Act,  1937,  in  which,  certain  foreign awards  governed by the

Geneva Convention of 1923 were to be recognized and enforced in signatory

countries, India being one. In this Act, “foreign award” is defined as follows:

“2.  Interpretation.—In  this  Act  “foreign  award”  means  an award  on  differences  relating  to  matters  considered  as commercial under the law in force in India, made after the 28th day of July, 1924,—

(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the First Schedule applies;

(b)  between  persons  of  whom  one  is  subject  to  the jurisdiction of  some one of  such  powers as  the Central Government,  being  satisfied  that  reciprocal  provisions have  been  made,  may,  by  notification in  the  Official Gazette, declare to be parties to the Convention set forth in the Second Schedule, and of whom the other is subject to the jurisdiction of some other of the powers aforesaid; and

(c)  in one of such territories as the Central Government being satisfied that reciprocal provisions have been may by like notification,  declare to be territories to which the said convention applies,

and for the purposes of this Act an award shall not be deemed to be final if any proceedings for the purposes of contesting the validity of the award are pending in the country in which it was made.”  

13. The  Arbitration  Act,  1940  then  came  into  force,  repealing  both  the

Arbitration Act, 1899 as well as the Second Schedule to the Code of Civil

Procedure, 1908. This Act, under Section 1(2), extended to the whole of India

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except the State of Jammu and Kashmir. Under this Act, “award” was defined

as follows:

“2. Definitions.— xxx xxx xxx

(b) “award” means an arbitration award;”

Under this Act, Chapter II dealt with arbitration without the intervention of a

Court. Section 17 is important, and is set out as follows:

“17. Judgment is terms of award.— Where the Court sees no cause  to  remit  the  award  or  any  of  the  matters  referred  to arbitration for  reconsideration or  to  set  aside the award,  the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award,  and upon the judgment  so pronounced a decree shall follow and no appeal shall lie from such decree except on the  ground  that  it  is  in  excess  of,  or  not  otherwise  in accordance with, the award.”

Under Chapter III, arbitration with intervention of a Court where there is no

suit  pending  is  dealt  with,  and  in  Chapter  IV,  arbitration  which  arises  in

references  from  suits  is  dealt  with.  This  Act,  like  its  predecessors,  also

applied only to awards that were made first in British India, and later in the

territory of India except the State of Jammu and Kashmir.

14. In 1961, after the New York Convention of 1958, the Foreign Awards

(Recognition and Enforcement) Act, 1961, came into force to recognize and

enforce  New  York  Convention  Awards.  Here  again,  such  awards  were

referred to as “foreign awards” in Section 2 thereof which defines foreign

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awards as follows:

“2.  Definition.—In  this  Act,  unless  the  context  otherwise requires,  “foreign  award”  means  an  award  on  differences between  persons  arising  out  of  legal  relationships,  whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960—

(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the Schedule applies; and

(b)  in one of such territories as the Central Government being satisfied that reciprocal provisions have been made, may, by notification in the official  Gazette, declare to be territories to which the said Convention applies.”

15. As  is  well-known,  the present  Arbitration and  Conciliation  Act,  1996

then came into force and repealed the Arbitration (Protocol and Convention)

Act, 1937, The Arbitration Act, 1940, and the Foreign Awards (Recognition

and  Enforcement)  Act,  1961  bringing,  with  certain  important  changes,

domestic  awards  within  Part  I,  foreign  awards  relatable  to  the  New York

Convention within Chapter I of Part II, and foreign awards relatable to the

Geneva Convention within Chapter II  of  Part  II.  In the present Act,  under

Section 2(1)(c), “arbitral award” is defined as follows:

“2. Definitions.—(1) In this Part, unless the context otherwise requires,—

xxx xxx xxx

(c) “arbitral award” includes an interim award;”

Section 44 in Chapter I of Part II defines a New York Convention award as

follows:

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“44. Definition.—In this Chapter, unless the context otherwise requires,  “foreign  award”  means  an  arbitral  award  on differences between persons arising out of legal relationships, whether  contractual  or  not,  considered as commercial  under the  law in  force  in  India,  made on  or  after  the  11th  day  of October, 1960—

(a) in pursuance of an agreement in writing for arbitration to  which  the  Convention  set  forth  in  the  First  Schedule applies, and

(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.”

Section 53 in Chapter II of Part II defines a Geneva Convention award as

follows:

“53. Interpretation.—In this Chapter “foreign award” means an arbitral award on differences relating to matters considered as commercial under the law in force in India made after the 28th day of July, 1924,—

(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second Schedule applies, and

(b)  between  persons  of  whom  one  is  subject  to  the jurisdiction of  some one of  such  powers as  the Central Government,  being  satisfied  that  reciprocal  provisions have  been  made,  may,  by  notification  in  the  Official Gazette, declare to be parties to the Convention set forth in the Third Schedule, and of whom the other is subject to the jurisdiction of some other of the powers aforesaid, and

(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made, may, by like notification, declare to be territories to which the said Convention applies,

and for  the purposes of  this  Chapter  an award shall  not  be deemed  to  be  final  if  any  proceedings  for  the  purpose  of contesting the validity of the award are pending in the country in which it was made.”

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The other important sections which have a bearing on the controversy before

us are as follows:

“46. When foreign award binding.—Any foreign award which would be enforceable under this Chapter shall  be treated as binding for all  purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set-off  or otherwise in any legal proceedings  in  India  and  any  references  in  this  Chapter  to enforcing  a  foreign  award  shall  be  construed  as  including references to relying on an award.

47. Evidence.—(1) The party applying for the enforcement of a foreign  award  shall,  at  the  time  of  the  application,  produce before the Court—

(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;

(b) the original agreement for arbitration or a duly certified copy thereof; and

(c) such evidence as may be necessary to prove that the award is a foreign award.

(2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award  shall  produce  a  translation  into  English  certified  as correct  by  a  diplomatic  or  consular  agent  of  the  country  to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Explanation.— In this section and in the sections following in this Chapter, “Court” means the High Court having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same had been the subject-matter of a suit on its original civil jurisdiction and in other cases, in the High Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court.”

xxx xxx xxx

“49.  Enforcement  of  foreign  awards.—Where  the  Court  is

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satisfied  that  the  foreign  award  is  enforceable  under  this Chapter,  the award shall  be deemed to be a decree of  that Court.”

16. It will  thus be seen that “award” under Item 12 of Schedule I of the

Indian Stamp Act, 1899 has remained unchanged till date. As has been held

by us hereinabove, in 1899, this “award” would refer only to a decision in

writing by an arbitrator or umpire in a reference not made by an order of the

Court in the course of a suit. This would apply only to such award made at

the time in British India, and today, after the amendment of Section 1(2) of

the Indian Stamp Act, 1899 by Act 43 of 1955, to awards made in the whole

of India except the State of Jammu and Kashmir. This being the case, we are

of the view that the expression “award” has never included a foreign award

from the very inception till  date.  Consequently,  a foreign award not  being

includible in Schedule I of the Indian Stamp Act, 1899, is not liable for stamp

duty. Shri Viswanathan also relied upon the Tamil Nadu Amendment of the

Indian Stamp Act, 1899. The Tamil Nadu Amendment contains the identical

definition of “award” as given in Item 12 thereof. The only difference is in the

figures contained for stamp duty.  Consequently, this does not take the matter

very much further.  

17. Shri  Viswanathan then argued, based on  Senior Electric Inspector

and Ors. v. Laxminarayan Chopra and Anr., (1962) 3 SCR 146, that an Act

must be construed as on date, despite the fact that the definition contained in

an old Act may not literally fit  the bill.  We are afraid that this judgment is

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wholly  distinguishable  in  that,  in  the  aforesaid  case,  the  definition  of

“telegraph line” in the Indian Telegraph Act, 1885, was construed as being

wide  enough  to  include  electric  lines  used  for  the  purpose  of  wireless

telegraph. This Court held that in a modern progressive society, it would be

unreasonable  to  confine  the  intention  of  the  legislature  to  the  meaning

attributable to a word used at the time the law was made, and, unless a

contrary intention appeared, an interpretation should be given to the words

used in the statute to take in new facts and situations, if  such words are

capable of  comprehending them. As stated hereinabove,  this  judgment  is

wholly distinguishable in that, given the factual scenario of 1899, and the fact

that foreign awards existed even then, in princely states as well as foreign

countries, no new fact situation has arisen subsequently in order to apply the

ratio of the said judgment. Further, we must not forget that the Indian Stamp

Act, 1899 is a fiscal statute which must be construed literally. Any ambiguity

in the said statute would enure to the benefit of the assessee who has to pay

stamp duty. This being the case, Shri Viswanathan’s argument based on the

aforesaid judgment, must be rejected.  

18. We now come to some of the judgments referred to by counsel for the

parties.  The  Punjab  and  Haryana  High  Court  judgment (supra),  strongly

relied upon by Shri Viswanathan, referred to and relied upon Section 3(c) of

the Indian Stamp Act, 1899, and held that an instrument mentioned in the

Schedule which is executed out of India, being a foreign award, would relate

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to a matter or thing done or not to be done in India, and that, therefore, stamp

duty would be payable on such an award. It  is important to note that this

judgment does not refer to the definition of “award” in Item 12 of Schedule I

at all. For this reason alone, this judgment cannot take us very much further,

as it is clear that a foreign award, as has been held by us, is not contained

within the expression “award” in Item 12 of Schedule I and is, therefore, not

an “instrument” which is taxable under Section 3(c) of the Indian Stamp Act,

1899.  

19. The Delhi High Court judgment (supra), strongly relied upon by learned

counsel appearing on behalf of the Respondent also does not take us very

much further. As has been rightly pointed out by Shri Viswanathan, the said

judgment refers to the definition of “foreign award” contained in the 1996 Act,

but then goes on to rely upon a Supreme Court judgment, stating that such

foreign  award  would  not  require  registration  as  it  can  be  enforced  as  a

decree. It further went on to rely upon the Supreme Court judgment in  M.

Anasuya Devi and Anr. v. M. Manik Reddy and Ors., (2003) 8 SCC 565, to

state that the Court, while deciding enforceability of a foreign award under

Sections 47 and 48, cannot hold the award non-enforceable on the ground of

it being unstamped. This also, strictly speaking, is incorrect, as M. Anasuya

(supra) merely stated, in the context of a domestic award, that the question

as to whether an award is required to be stamped would be relevant only at

the enforcement stage under Section 36 of the 1996 Act and not at the stage

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of challenge, which is governed by Section 34 of the 1996 Act. We cannot

forget that there is no challenge stage so far as a foreign award is concerned

– so long as none of the grounds in Section 48 are attracted,  the award

becomes enforceable as a decree. The stage of enforceability, therefore, has

arisen in these cases, and it  cannot be said that the  ratio of  M. Anasuya

(supra) would apply so that stamp duty would become payable only at some

subsequent stage. This judgment is equally incorrect in stating that  Fuerst

Day Lawson Ltd. v. Jindal Exports Ltd., (2001) 6 SCC 356, would apply.

One sentence in Fuerst Day Lawson (supra) reads, “[T]he only difference as

found is that while under the Foreign Awards Act a decree follows, under the

new Act the foreign award is already stamped as the decree.” This sentence

does  not  lead  to  the  conclusion,  following  the  judgment  in  Thyssen

Stahlunion GMBH v. Steel Authority of India Ltd., (1999) 9 SCC 334, that

under the 1996 Act, a foreign award is considered to be stamped already. All

that this sentence means is that the foreign award is to be regarded as a

decree.  The expression  “stamped”  means “regarded”.  This  judgment  also

does not carry us much further.  

20. On the other hand, the Madhya Pradesh High Court judgment (supra)

hits nearer home. This judgment, in paragraph 12 thereof, states why foreign

awards do not have to suffer stamp duty in the following terms:

“12. The Law on Arbitration in India was substantially contained in  three  enactments  namely,  The  Arbitration  Act,  1940,  The

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Arbitration  (Protocol  and  Convention)  Act,  1937  and  The Foreign Awards (Recognition and Enforcement)  Act,  1961.  It was widely felt the 1940 Act, which contains the General Law of Arbitration,  has  become  outdated.  The  Arbitration  and Conciliation Act, 1996 came in force to consolidate and amend the  Law  relating  to  Domestic  Arbitrations,  International Commercial Arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation,  commission on international trade in short (UNCITRAL) Model Law and Rules. Apart from other object, the object of the Act is to provide that every final arbitral award is enforced in the same manner as if it were a decree of the Court. While Arbitration and Conciliation Act,  1996  was  enforced,  no  amendment  was  made  in  the definition of award given in the Indian Stamp Act. Similarly, the Schedule which lays down the stamp duty payable on award was not amended by including the foreign award. It  appears that law makers while enforcing the Arbitration and Conciliation Act,  1996  was  of  the  view  that  foreign  award  shall  be enforceable as if it were a decree of the Court, no amendment was brought either in the definition of award or in the Schedule relating  to  payment  of  stamp  duty  on  award.  Since  the definition of award given at Entry No. 11 of the Schedule of the Indian Stamp Act does not cover the foreign award and one of the objects to enforce the new Act was to enforce final award as if it was a decree and keeping in view the law laid down by the Hon'ble Apex Court in the matter of Fuerst Day Lawson Ltd. (supra),  wherein  the  Hon'ble  Supreme  Court  has  held  that under  the new Act  the foreign award is  already stamped as decree, this Court is of the view that the petition filed by the petitioner has no merits and deserves to be dismissed. In view of this, the petition filed by the petitioner is disposed of holding that foreign award is already stamped and is enforceable as decree.”

21. The reasoning contained in paragraph 12 has our approval, short of the

reasoning contained following Fuerst Day Lawson (supra) which, as we have

already stated above, did not indicate that foreign awards can never suffer

stamp duty.  

22. The other judgment heavily relied upon by Shri Viswanathan, namely

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the  Gujarat High Court judgment (supra), merely refers to Article III  of the

New York Convention to state that so far as procedural aspects relatable to

foreign awards are concerned, we must go by the Code of Civil Procedure,

and going by the Code of Civil  Procedure, the Court at Bhavnagar would

have no jurisdiction to enforce the foreign award in the facts of that case.

Since Article III of the New York Convention is strongly relied upon by Shri

Viswanathan, we need to set it out. It states:

“Article III

Each  Contracting  State  shall  recognise  arbitral  awards  as binding  and  enforce  them  in  accordance  with  the  rules  of procedure of the territory where the award is relied upon under the conditions laid down in the following articles. There shall not be  imposed  substantially  more  onerous  conditions  or  higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.”

23. There is no doubt whatsoever that if stamp duties are leviable in India

on foreign awards, the imposition should not be substantially more onerous

than  the  stamp  duty  that  is  imposed  on  recognition  or  enforcement  of

domestic arbitral awards. For the said Article to apply, stamp duty must first

be  leviable  on  a  foreign  award,  which,  as  we  have  held  earlier  in  this

judgment, is not the case. Equally, reliance upon the 194 th Law Commission

of India Report,  insofar as stamp duty on domestic awards is concerned,

would again have little bearing, given our finding that under the present state

of  the  law,  foreign awards are  not  liable  to  stamp duty  under  the  Indian

Stamp Act, 1899.

22

24. An argument was made by learned counsel for the Respondent that

Section  47  of  the  Act  requires  three  things  and  only  three  things  to  be

produced  before  the  Court  for  enforcement  of  a  foreign  award,  and  that

therefore, stamp duty not being one of the three things required, cannot ever

be levied.  We are afraid that  this  again is  an extreme argument.  All  that

Section 47 deals with is production before the Court of proof of the fact that a

foreign  award  is  sought  to  be  enforced.  In  no  manner  does  Section  47

interdict  the payment of stamp duty if  it  is otherwise payable in law. This

argument must thus be rejected. Equally, the argument that under Section

48(2)(b), even if stamp duty is payable on a foreign award, it would not be

contrary  to  the public  policy  of  India,  must  be rejected.  The fundamental

policy of  Indian law,  as has been held in  Renusagar Power Co.  Ltd.  v.

General Electric Co.,  1994 Supp (1) SCC 644, and followed in  Associate

Builders v. Delhi Development Authority, (2015) 3 SCC 49, makes it clear

that if a statute like the Foreign Exchange Regulation Act, 1973 dealing with

the economy of the country is concerned, it would certainly come within the

expression “fundamental policy of Indian law”. The Indian Stamp Act, 1899,

being a fiscal statute levying stamp duty on instruments, is also an Act which

deals with the economy of India, and would, on a parity of reasoning, be an

Act reflecting the fundamental policy of Indian law. This argument on behalf

of the Respondent must also, therefore, be rejected.

25. We, therefore, hold that the learned Single Judge of the Madras High

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Court is correct, and the fact that a foreign award has not borne stamp duty

under the Indian Stamp Act, 1899 would not render it unenforceable for the

reasons given in our judgment. The appeal accordingly stands dismissed.

………..……………… J. (R. F. Nariman)

…..…………………… J. (Indu Malhotra)

New Delhi. September 13, 2018.

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ITEM No. 1501           Court No. 9             SECTION  XII (For Judgment)                  

S U P R E M E   C O U R T   O F   I N D I A                     RECORD OF PROCEEDINGS        

       Civil Appeal  No. 9515  of 2018             (Arising out of SLP (Civil) No. 13913 of 2018)

M/S. SHRIRAM EPC LIMITED                   Appellant(s)

                               VERSUS

RIOGLASS SOLAR SA          Respondent(s)

 Date :  13.09.2018   This matter  was called on for pronouncement  

 of judgment today.

For Appellant(s) Mr. Snehasish Mukherjee, Adv.

                        For Respondent(s) Mr. Hiroo Advani, Adv.

Mr. Divyakant Lahoti, Adv. Mr. Shashank Garg, Adv. Ms. Amrita Grover, Adv. Mr. Parikshit Ahuja, Adv. Mr. Tariq Khan, Adv.

Hon'ble Mr. Justice   Rohtinton Fali Nariman

pronounced the judgment of the Bench comprising His

Lordship and Hon'ble Ms. Justice Indu Malhotra.

Leave granted  

The appeal is dismissed in terms of the signed

reportable judgment.

Pending applications, if any, shall stand disposed

of.

(Shashi Sareen) AR­cum­PS

(Tapan Kumar Chakraborty) Branch Officer

(Signed reportable judgment is placed on the file)