In Brief
N.N. Global Mercantile sued to enforce an arbitration clause in a Work Order for coal washing that was not stamped under the Maharashtra Stamp Act. The Supreme Court held that an arbitration agreement is separable from and retains independent legal existence from the underlying contract. Non-payment of stamp duty on the Work Order does not invalidate the arbitration agreement itself, since arbitration agreements are not listed as instruments subject to stamp duty. An unstamped Work Order cannot be acted upon until stamp duty is paid, but this deficiency does not prevent arbitration. The Court also held that allegations of civil fraud regarding bank guarantee invocation are arbitrable disputes, distinguishing criminal fraud (non-arbitrable) from civil fraud.
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