Analysis of Bombay High Court Judgement in Gautam Landscapes Private Ltd. vs. Shailesh S. Shah & Ors.

The Court under section 9 of the Arbitration is empowered to grant ad-interim and interim reliefs even if the document is not adequately stamped and also at the same time, the Court need not wait for outcome of the said adjudication for passing any order under section 9 & 11 of Arbitration.

Issue 1 : Whether a court, under the Arbitration and Conciliation Act, 1996, can entertain and grant any interim or ad-interim relief in an application under Section 9 of the said Act when a document containing arbitration clause is unstamped or insufficiently stamped?

The Honourable Bench Members ordered that “In our view, the question of law i.e. whether a Court, under the Arbitration and Conciliation Act, 1996, can entertain and grant any interim or ad interim relief in an application under Section 9 of the said Act when a document containing arbitration clause is unstamped or insufficiently stamped, is required to be answered in the affirmative.”

Issue 2 : Whether, inter alia, in view of Section 11 (6A) of the Arbitration and Conciliation Act, 1996, inserted by Arbitration and Conciliation (Amendment) Act, 2016, it would be necessary for the Court before considering and passing final orders on an application under Section 11(6) of the Act to await the adjudication by the stamp authorities, in a case where the document objected to, is not adequately stamped?

The Honourable Bench Members ordered that “We are of the view that the party need not be put to a disadvantage merely because an objection has been raised in respect of insufficiency of the stamp on the agreement presented before the court. Neither a contesting party could deprive legitimate rights of a litigant in praying for timely intervention of the court by praying for appointment of an arbitral tribunal nor for interim reliefs in the fact situation of a case. That would be rendering a party without any forum and in a given situation the outcome would be, at times, catastrophic and disastrous and the damage could be irreparable one. A balanced approach, keeping in view the legislative intent and the view adopted by the Supreme Court, needs to be adopted, so that the purpose of enacting the provisions of Sections 11 and 9 of the Act as amended by the Amendment Act is not defeated.”

Judgement link : https://bombayhighcourt.nic.in/generatenewauth.php?auth=cGF0aD0uL2RhdGEvanVkZ2VtZW50cy8yMDE5LyZmbmFtZT1PU0FSQkFQODcyMTYucGRmJnNtZmxhZz1OJnJqdWRkYXRlPSZ1cGxvYWRkdD0wNC8wNC8yMDE5JnNwYXNzcGhyYXNlPTA2MDQxOTIxNDcxNw==