M/S SHRIRAM EPC LIMITED versus RIOGLASS SOLAR SA

Citation: [2018] 10 S.C.R. 749 · Decided: 13-09-2018 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Dismissed

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Judgment (excerpt)

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M/S SHRIRAM EPC LIMITED
v.
RIOGLASS SOLAR SA
(Civil Appeal No. 9515 of 2018)
SEPTEMBER 13, 2018
[R. F. NARIMAN AND INDU MALHOTRA, JJ.]
Arbitration and Conciliation Act, 1996 – ss. 48 and 49 –
Foreign award – Enforceability of, when award not stamped – Held:
Foreign award not bearing stamp duty under the Stamp Act, would
not be rendered unenforceable – Term ‘award’ under Item 12 of
Schedule I of the Stamp Act, does not include foreign award, thus, a
foreign award not being includible in Schedule I, is not liable for
stamp duty – Stamp Act, 1899 – Item 12, Schedule I.
Dismissing the appeal, the Court
HELD: 1. The Single Judge of the High Court is correct,
and the fact that a foreign award has not borne stamp duty under
the Stamp Act, 1899 would not render it unenforceable.
[Para 25] [770-A-B]
2.1  It becomes clear that the only “award” that is referred
to in the Stamp Act, 1899 is an award that is made in the territory
of British India provided that such award is not made pursuant to
a reference made by an order of the Court in the course of a suit.
It is important to note that there were several princely states in
India governed by sovereign rulers which had their own laws.
Arbitration laws, if any, in the said princely states, if they were to
culminate in awards, would not be “awards” under either the Civil
Procedure Code, 1882 or the Arbitration Act, 1899. They would
therefore, be foreign awards insofar as British India is concerned.
An award made in a princely state, or in a foreign country, if
enforced by means of a suit in British India, would not be covered
by the expression “award” contained in Item 12 of Schedule I of
the Stamp Act, 1899. Only awards which are decisions in writing
by an arbitrator or umpire, made in British India, on a reference
made otherwise than by an order of the Court in the course of a
suit would be included.  [Para 10] [759-E-H]
  [2018] 10 S.C.R. 749
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SUPREME COURT REPORTS
[2018] 10 S.C.R.
2.2 “Award” under Item 12 of Schedule I of the Stamp Act,
1899 has remained unchanged till date. In 1899, this “award”
would refer only to a decision in writing by an arbitrator or umpire
in a reference not made by an order of the Court in the course of
a suit. This would apply only to such award made at the time in
British India, and today, after the amendment of Section 1(2) of
the Stamp Act, 1899 by Act 43 of 1955, to awards made in the
whole of India except the State of Jammu and Kashmir. This being
the case, the expression “award” has never included a foreign
award from the very inception till date. Consequently, a foreign
award not being includible in Schedule I of the Stamp Act, 1899,
is not liable for stamp duty. The Tamil Nadu Amendment of the
Stamp Act, 1899 contains the identical definition of “award” as
given in Item 12 thereof. The only difference is in the figures
contained for stamp duty. [Para 16] [765-C-E]
2.3 The Stamp Act, 1899 is a fiscal statute which must be
construed literally. Any ambiguity in the said statute would enure
to the benefit of the assessee who has to pay stamp duty.
[Para 17][766-B-C]
2.4 There is no doubt whatsoever that if stamp duties are
leviable in India on foreign awards, the imposition should not be
substantially more onerous than the stamp duty that is imposed
on recognition or enforcement of domestic arbitral awards. For
the said Article to apply, stamp duty must first be leviable on a
foreign award, which, is not the case. Equally, reliance upon the
194th Law Commission of India Report, insofar as stamp duty on
domestic awards is concerned, would again have little bearing,
given the finding that under the present state of the law, foreign
awards are not liable to stamp duty under the Stamp Act, 1899.
[Para 23][769-B-C]
2.5 An argument that Section 47 of the Act requires three
things and only three things to be produced before the Court for
enforcement of a foreign award, and that therefore, stamp duty
not being one of the three things required, cannot ever be levied,
is an extreme argument. All that Section 47 deals with is
production before the Court of proof of the fact that a foreign
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award is sought to be enforced. In no manner does Section 47
interdict the payment of stamp duty if it is otherwise payable in
law. This argument must thus be rejected. Equally, the argument
that under Section 48(2)(b), even if stamp duty is payable on a
foreign award, it would not be contrary to the public p

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