The arbitration agreement is taxable under Section 5 of the Indian Stamp Act of 1899. With respect to the 1940 law, the Calcutta High Court in Bengal Hire Purchase Corpn v. Harendra Singh, that an unsealed arbitration agreement cannot take effect unless the full stamp duty paid properly. The courts would first refer the unstamped agreement and pass it on to the appropriate authorities for the payment of stamp duty and penalty (if applicable). It is only once the gap is healed that the arbitration agreement can be executed. The Supreme Court held the same position with respect to the 1996 law in Garware Walls Ropes Ltd. v. Coastal Marine Constructions – Engineering Ltd. . . .
. any challenge or claim arising from this agreement or relating to this agreement, its interpretation, validity (including, but not limited, to any allegation that all or part of the agreement is null and valid), or the purpose of this agreement are resolved by confidential and binding arbitration . . . . It should be noted that the above list is not exhaustive. In order to develop effective arbitration agreements, reviewing a number of additional mechanisms can help parties overcome the complications that may arise during the arbitration process. In the case of BGS-SGS SOMA-JV Vs. NHPC Ltd., the three-judge bank of the Hon`ble Supreme Court ruled that if an arbitration agreement designates a court, but does not mention the seat or rules of the court, the place of the court is interpreted as the seat of the arbitration tribunal. Therefore, in the absence of a seat and the law in force, the jurisdiction of arbitration rests exclusively with the competent court. While it is always preferable to design clear and clear clauses, an arbitration agreement that does not mention the terms “arbitration tribunal,” “arbitrator” and/or “arbitrator” can still be considered a valid arbitration agreement if it contains the fundamental attributes of a valid arbitration agreement (as noted above). For a long time, parties (both domestically and internationally) may experience communication difficulties during the dispute resolution process due to the diversity of language skills.
In such cases, translation costs can skyrocket and cause additional difficulty for the parties. Therefore, choosing the language of arbitration in advance is always a wise decision. The terms “seat” and “place” are not defined by the 1996 Act and were used interchangeably prior to Bharat Aluminium Company`s decision against Kaiser Aluminium Technical Services Inc., (Balco). In Balco, tIn Balco, the Supreme Court held that the “seat” is the centre of gravity of the arbitration process and decides on the jurisdiction of the Tribunal, as well as the jurisdiction of the place where the plea is formed. Therefore, if the arbitration is based in London, the first part of the 1996 Act will not be applicable and the London courts will be competent for arbitration. As a result of Balco, questions were raised as to the interpretation of the terms “place” or “place” in arbitration proceedings.