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SUPREME COURT OF INDIA
R. F. Nariman, Indu Malhotra,
M/S SHRIRAM EPC LIMITED – APPELLANT
VERSUS
RIOGLASS SOLAR SA – RESPONDENT
CIVIL APPEAL NO. 9515 of 2018 (ARISING OUT OF SLP (CIVIL) NO.13913 OF 2018)
Decided On : 13-09-2018
(2013) 2 MP LJ 252 – Cited with approval
(2012) 9 SCC 552; (2003) 8 SCC 565; (2001) 6 SCC 356; (1999) 9 SCC 334 – Referred
AIR 1962 P&H 167; (2009) 163 DLT 391; AIR 1986 Guj 62; (1962) 3 SCR 146 – Distinguished
(b) Interpretation of statute – Indian Stamp Act, 1899 being a fiscal statute must be construed literally. (Para 17)
(c) Indian Stamp Act, 1899 – Section 47 – Does not interdict the payment of stamp duty if it is otherwise payable in law. (Para 24)
(d) Indian Stamp Act, 1899 – Section 48(2)(b) – Stamp Act dealing with economy of India – Is an Act reflecting the fundamental policy of Indian law – Levying or paying stamp duty on foreign awards would be against fundamental policy of Indian law. (Para 24)
1994 Supp (1) SCC 644; (2015) 3 SCC 49 – Relied upon
Facts of the case:
An ICC award was delivered in London on 12.02.2015 by Mr. Christopher Style QC.
Objections under Section 34 of the Arbitration and Conciliation Act, 1996 were filed by the Appellant which were dismissed stating that a petition under Section 34 would not be maintainable as against a foreign award.
Meanwhile, the Respondent filed a petition under Section 47 of the 1996 Act to enforce the said award.
All objections to the said award were rejected by the learned Single Judge. An appeal to the Division Bench resulted in an Order stating that in view of Section 50 of the 1996 Act, the said appeal would not be maintainable.
Finding of the Court:
Foreign award are not liable to stamp duty.
Result: Appeal dismissed.
JUDGMENT
R.F. NARIMAN, J.
1. Leave granted.
2. The present appeal arises from the judgment of a Single Judge of the High Court of Judicature at Madras, dated 09.02.2017, in which a petition filed to enforce a foreign award was allowed. Several grounds were taken before the learned single Judge. We are concerned with only one ground that has been argued before us, namely, that as the award has not been stamped, it cannot be enforced under Sections 48 and 49 of the Arbitration and Conciliation Act, 1996 (“1996 Act”).
3. The brief facts that are necessary for determination of the present controversy are as follows: 3.1. An ICC award was delivered in London on 12.02.2015 by Mr. Christopher Style QC in the following terms:
“363. After consideration of all the factual and legal submissions which have been presented to me and for the reasons set out in full above, I award, declare and adjudge as follows:
(1) I declare that I have no jurisdiction over the Second and Third Respondents.
(2) I declare that Rioglass is not obliged to issue a Performance Bank Guarantee as provided for in clause 6 of the Agreement, as amended by Amendment No.1.
(3) I declare that Rioglass is entitled to sell as scrap the mirrors that it holds in storage in relation to Delivery Four.
(4) I declare that Shriram acted in breach of the Agreement in the respects set out above.
(5) I order Shriram to pay Rioglass €4,366,598.70, consisting of damages amounting to €4,151,570.52 and interest amounting to €215,028.18.”
3.2. Objections dated 21.07.2015 under Section 34 of the Arbitration and Conciliation Act, 1996 were filed by the Appellant which were dismissed on 27.09.2016, stating that a petition under Section 34 would not be maintainable as against a foreign award, citing this Court’s judgment in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552. Meanwhile, the Respondent filed a petition under Section 47 of the 1996 Act, dated 05.08.2015, to enforce the said award. As stated hereinabove, all objections to the said award were rejected by the learned Single Judge on 09.02.2017. An appeal to the Division Bench resulted in an Order dated 14.03.2018, stating that in view of Section 50 of the 1996 Act, the said appeal would not be maintainable. This is how the present SLP has been filed against the decision of the learned Single Judge.
4. Shri K.V. Viswanathan, learned senior advocate, appearing on behalf of the Appellant, has submitted before us, that given the provisions of the Indian Stamp Act, 1899, it is clear that a foreign award would be covered by the said Act. This being so, and stamp duty not having been paid, the said foreign award cannot be enforced. He relied strongly on a judgment of the Punjab and Haryana High Court reported in Gujrals Co. v. M.A. Morris, AIR 1962 P&H 167. According to him, the contrary judgments of the Delhi High Court reported in Naval Gent Maritime Ltd. v. Shivanath Rai Harnarain (I) Ltd., (2009) 163 DLT 391, and the Madhya Pradesh High Court judgment reported in Narayan Trading Co. v. Abcom Trading Pvt. Ltd., (2013) 2 MP LJ 252, are incorrect. According to the learned senior advocate, the Delhi High Court judgment is really a judgment on registration of a foreign award, even though it purports to speak about stamp duty payable. The judgment of the Madhya Pradesh High Court, on the other hand, is not correct in stating that a foreign award would not be included within the term “award” under Schedule I of the Indian Stamp Act, 1899. He relied upon the Gujarat High Court judgment reported in Orient Middle East Lines Ltd., Bombay and Anr. v. Brace Transport Corporation of Monrovia and Ors., AIR 1986 Guj 62, which stated that Article III of the New York Convention would make it clear that stamp duty, being in the nature of fees or charges for recognition and enforcement of a foreign award, can be enfo
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