Delhi High Court Lays Down Guidelines For Execution Of Insufficiently Stamped Domestic Arbitral Awards

The Delhi High Court has laid down detailed guidelines to its registry for ensuring compliance with stamp duty and registration requirements in petitions seeking enforcement of domestic arbitral awards.

The directions come after the court held that an inadequately stamped arbitral award cannot be acted upon at the enforcement stage merely because the decree holder subsequently deposits the deficient stamp duty.

Where adequate stamp duty is sought to be paid after the permissible period, the statutory procedure, including impounding and payment of penalty wherever applicable, must be followed.

A Bench of Justice Om Prakash Shukla ruled:

“An insufficiently stamped arbitral award sought to be enforced is to be impounded under Section 33 and dealt with either under Section 35 or 38(2).”

“There is no provision in the Stamp Act which permits Decree Holders to deposit adequate stamp duty on an arbitral award after lapse of one month from its execution unilaterally and without payment of penalty (if applicable).”, it added.

The bench issued the following directions for enforcement petitions:

• Every petition must disclose the date of the award, the date of payment of stamp duty, amount awarded and the stamp duty payable.
• Verified proof of payment of sufficient stamp duty and registration, where applicable, must be annexed to the petition.
• The Registry must scrutinise whether the petition is accompanied by proof of adequate stamp duty and registration, where applicable, before listing it.
• The Registry must specifically record the stamp-duty position, including the amount paid and the amount chargeable.
• For petitions filed on or before August 13, 2026, Matters involving inadequately stamped awards are to be directly listed before the Joint Registrar, who may proceed in accordance with the applicable provisions of the Stamp Act.
• For Petitions filed after August 13, 2026, the Registry must return petitions accompanied by inadequately stamped awards under objections, and the awards must be dealt with in accordance with the statutory procedure for impounding.
• Enforcement petitions shall not be disposed of merely for want of stamp duty, and interim orders, if any, may continue until the defect is cured.
• Where deemed fit, parties in pending enforcement proceedings may withdraw their petitions with liberty to seek restoration after satisfying the applicable stamp-duty requirements.
•  Parties may withdraw petitions with liberty to re-file or seek restoration once a subsisting stay, moratorium, liquidation proceedings, or another statutory or judicial impediment ceases.
• The Registrar General or Joint Registrar may call for the original arbitral award. If it is not voluntarily furnished, no penalty may be imposed on that ground, though the statutory bar on acting upon an inadequately stamped award will continue.
• Where applicable, and where an award is compulsorily registrable, decree holders must ensure compliance with the Registration Act.
• The directions do not apply to foreign arbitral awards.

The ruling came in an enforcement petition filed by URC Construction Private Limited against the Airports Authority of India concerning an arbitral award dated March 26, 2019, which was subsequently corrected on May 7, 2019.

The award granted URC Construction ₹2,59,07,248.60 along with pendente lite and future interest at 10% per annum. The award initially carried stamp duty of ₹100, and URC Construction subsequently deposited deficient stamp duty of ₹25,850 on July 29, 2026.

The dispute before the Court was whether the decree holder could unilaterally deposit the deficient stamp duty at the enforcement stage to cure the defect or whether the award had to undergo the statutory procedure for impounding.

URC Construction argued that insufficient stamping was a curable defect and that payment of the requisite duty cured the defect. The Airports Authority of India contended that the statutory procedure under the Stamp Act, including the applicable penalty mechanism, could not be bypassed.

The court held that the Arbitration and Conciliation Act and the Indian Stamp Act operate independently and must be read harmoniously. It clarified that stamp duty is attracted upon the execution or signing of an arbitral award and not at the enforcement stage.

It further held that inadequately stamped instruments produced before a competent authority are subject to the statutory obligation of impounding. On the issue of penalty, the Court held that the discretion regarding the quantum of penalty under the statutory scheme lies with the Collector and not with the authority exercising the power to impound the instrument.

Noting that earlier Practice Directions on stamp-duty declarations had not been followed in their “true letter and spirit”, the Court issued the detailed framework to ensure statutory compliance.

Consequently, the court held that the March 26, 2019, award and the May 7, 2019, correction order were liable to be impounded and directed URC Construction to furnish the original award before the Joint Registrar.

It requested the concerned Collector to complete the process preferably within six weeks from receipt of the award.

For Petitioner (URC Construction (P) Ltd.): Advocates Vikas Mehta and Nitika Grover.

For Respondent (Airports Authority of India): Standing Counsel Digvijay Rai, with Advocate Archit Mishra.