In Brief
A sub-contract for geotextile embankment work contained an arbitration clause but was allegedly unstamped. When one party sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, the High Court appointed the arbitrator without addressing the stamp duty issue, relying on the amended Section 11(6A), which narrowed court examination to 'existence' of the arbitration agreement alone. The Supreme Court held that the provisions of the Indian Stamp Act, being mandatory, remain binding: an unstamped agreement cannot be 'acted upon' until properly stamped, which includes the arbitration clause within it. Section 11(6A) does not override these fiscal requirements. The Court allowed the appeal and directed the High Court to impound the unstamped agreement and have stamp duties paid before proceeding with the appointment, establishing that 'existence' of an arbitration agreement presupposes legal enforceability.
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