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HIGH COURT OF MADRAS
Honourable Mr Justice C.SARAVANAN
Wardwiz India – Appellant
Versus
IP Softcom India – Respondent
Arbitration - Award Enforcement - Indian Stamp Act 1899, Sections 17 and 35; Arbitration and Conciliation Act 1996, Section 34 - The court upheld the arbitral award, stating the non-impairment due to minor stamp duty issues was a curable defect and did not violate public policy.
Fact of the Case:
The petitioners sought to challenge an arbitration award on grounds of it being drawn on improperly dated stamp paper, thus violating the Indian Stamp Act. They also objected to the high-interest rate awarded and the harshness of the provisional measures imposed by the arbitrator.
Finding of the Court:
The court ruled that the award, although printed on a stamp paper after its issuance, was not a fatal error as any deficiency in stamp duty is curable. The challenging grounds did not constitute sufficient basis for setting aside the award, and the interest rate was agreed upon in the settlement.
Issues: Whether the award was void due to non-compliance with stamp duty timing requirements and if the interest rate awarded was excessive.
Ratio Decidendi: The court held that minor deficiencies in stamp duty are curable and do not render an award null. Additionally, interest awarded as per the settlement agreement was valid.
Final Decision: The Original Petition is dismissed.
IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on 07.03.2024 Pronounced on 13.08.2024 CORAM :
THE HONOURABLE MR.JUSTICE C.SARAVANAN Arb.O.P.(Com.Div.) No.136 of 2022
1.M/s.Wardwiz India Solutions Private Limited, Unit 101, First Floor, Pride Purple Accord, Baner Road, Pune, Maharashtra – 411 045. 2.M/s.Welkin IT Services Private Limited, Office No.102, First Floor, Pride Purple Accord, Baner Road, Pune, Maharashtra – 411 045. ... Petitioners Vs.
M/s.IP Softcom India Private Limited, Represented by its Director A.Ravichandran, Nos.18 & 19, Mahalakshmi Nagar Extension, Numbal Village, Thiruverkadu Post, Chennai, Tamil Nadu – 600 077. ... Respondent Prayer: Original Petition is filed under Section 34(2)(a)(ii) of the Arbitration and Conciliation Act, 1996 (as amended), praying to set aside the Award dated 17.02.2022 passed by the learned Arbitrator herein in the above Arbitration Case and direct the respondent to pay the costs of the petition.
For Petitioners : Mr.Prakash Goklaney For Respondent : Mr.U.Vijjay Metha for M/s.V Legal Empire
ORDER
This Original Petition has been filed by the petitioners against the Award passed by the learned Arbitrator on 17.02.2022. By the impugned Award, the learned Arbitrator had ordered as follows:-
“(a) The respondent shall pay the claimant the principal sum of Rs.27,31,787/- together with accumulated interest calculated upto 07/05/2021, the date of filing the claim statement, being the sum of Rs.34,03,063/- totalling to Rs.61,34,850/- together with interest at the rate of 24% per annum on the total sum of Rs.61,34,850/- till its realization.
(b) The following Bank Accounts held by the respondents with the various banks as detailed hereunder will stand attached till the Award is satisfied. The Banks are injected from permitting the respondents operating the accounts or opening any new account or transact their business in relation to the respondents through any other account.
Bank Accounts in the name of the 1st respondent:
Axis Bank – Account No:920020034847461 IDBI Bank – Account No:0670102000010353 Standard Chartered Bank – Account No:27005066252 ICICI Bank – Account No:098505006437 Bank Accounts in the name of the 2nd respondent:
Axis Bank – Account No:920020034555966 Standard Chartered Bank – Account No:27005073453 (c) The entire movables in the office premises of the respondents located at Unit No.101, First Floor, Pride Purple Acod, Baner Road, Pune 411 045, shall stand attached forthwith till the realization of the Award amount.
(d) The Claimant shall be entitled to recover the costs in this Arbitral proceeding incurred towards payment of Arbitrators Fees and the Advocate Fees (paid towards conduct of arbitration only).”
2. The second petitioner was the second respondent before the Arbitral Tribunal. The challenge to the impugned Award is primarily on the ground that the impugned Award is contrary to Section 17 of the Indian Stamp Act, 1899.
3. It is submitted that the impugned Award is dated 17.02.2022, whereas, it is drawn on a stamp paper which dated 18.02.2022 and thus, it is in clear violation of Section 17 of the Indian Stamp Act, 1899.
4. The learned counsel for the petitioners would draw attention to Section 17 of the Indian Stamp Act, 1899 and under Article 12 of the , to buttress the above point.
5. It is therefore submitted that the impugned Award is contrary to the public policy of India and thus, susceptible to be set aside under Section 34(2)(b)(ii) read with Explanation 1(ii) of the Arbitration and Conciliation Act, 1996.
6. That apart, it is submitted that learned Arbitrator had passed an order under Section 17 of the Arbitration and Conciliation Act, 1996 and without taking note of the mandatory requirement of Order XXXVIII Rule
5 of CPC.
7. It is submitted that an order of attachment before judgment has been passed without giving an opportunity which is to be provided under Order XXXVIII Rule 5 of C.P.C. Clauses 15(b) and 15(c) of the Award virtually completes the execution itself, t
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