JUDGMENT

[VIA HYBRID MODE]

SANJEEV NARULA, J. (Oral):

1. The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 [hereinafter, ‘the Act’], seeking appointment of a Sole Arbitrator for adjudication of disputes arising out of/ pertaining to a ‘Service Agreement’ dated 05th December, 2018 which contains an arbitration clause.

2. The Respondent does not dispute the existence of the arbitration agreement, but opposes the maintainability of the present petition, primarily on the ground that the Service Agreement is not sufficiently stamped as per the provisions of the Indian Stamp Act, 1899. In this regard, counsel for the Respondent submits that although, he is aware that this Court in IMZ Corporate Pvt. Ltd. v. MSD Telematics,1 has taken a view contrary to the contention being urged by him, yet, reference of disputes to arbitration should be declined. He emphasises that while rendering decision in IMZ (Supra), the Court followed the judgment of Supreme Court in N. N. Global v. Indo Unique Flame,2 however, failed to notice that the judgment in N.N. Global (Supra) does not take into consideration an earlier view of the Supreme Court in Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram v. Bhaskar Raju & Bros.,3 wherein a three-judge bench, in unequivocal terms, upheld the dictum of law laid down in SMS Tea Estate v. Chandmari Tea Co. P. Ltd.4

3. The Court finds the above submissions to be devoid of merit. The holding of the judgment in N.N. Global (Supra) is clear and unequivocal in its overruling of the earlier judgment in SMS Tea Estate (Supra).

4. Pertinently, this Court has also been apprised of the recent judgement of the Supreme Court in Intercontinental Hotels Group (India) Pvt Ltd v. Waterline Hotels Pvt Ltd.,5 wherein while noticing that the bench in N. N. Global (Supra) had made reference to a larger Bench to settle the jurisprudence on this issue, expressed the following opinion which shall guide this court to decide the issue urged by the Respondent:

“22. Although we agree that there is a need to constitute a larger Bench to settle the jurisprudence, we are also cognizant of time sensitivity when dealing with arbitration issues. All these matters are still at a pre appointment stage, and we cannot leave them hanging until the larger Bench settles the issue. In view of the same, this Court – until the larger Bench decides on the interplay between Sections 11(6) and 16 – should ensure that arbitrations are

1 2021 SCC OnLine Del 3016.

2 (2021) 4 SCC 379.

3 (2020) 4 SCC 612 [See paragraphs no. 17-24]. 4 (2011) 14 SCC 66 [See paragraphs no. 17-22].

5 2022 SCC OnLine SC 83.

carried on, unless the issue before the Court patently indicates existence of deadwood.”

5. For the sake of clarity, let’s examine the views of the Supreme Court with respect to arbitration agreements contained in unstamped documents. The 2011 judgment of SMS Tea Estates (Supra) – holding stamping to be a requirement for reference – was affirmed in 2019 in Garware Ropes (Supra). A three-judge bench in Dharmaratnakara Rai (Supra) in February, 2020 relied upon SMS Tea Estates (Supra) and refused reference to arbitration of disputes arising out of an unstamped lease deed. Later in the same year, another three judge bench in Vidya Drolia (Supra) affirmed Garware Ropes (Supra) (see paragraph no. 92), on the aspect of meaning of “existence” and “validity” of an arbitration agreement. Then, the judgment of N. N. Global (Supra) was delivered in January, 2021, wherein, another three-judge Bench of the Supreme Court, in paragraph no. 6.9, expressly stated that “we overrule the judgment on SMS Tea Estates”. Further, in paragraph no. 6.10, it noted that, “the Garware judgment has followed the judgement in SMS Tea Estates”, and “We hold that this finding is erroneous, and does not lay down the correct position in law. We have already held that an arbitration agreement is distinct and independent from the underlying substantive