Matter: Pigments & Allieds v. Carboline India Pvt. Ltd. & Anr.
Order date: 28 February 2022
Pigments & Allieds (“P&A”), Carboline India Pvt. Ltd. (“Carboline”), and Octamec Engineering Pvt. Ltd. (“Octamec”) entered into a tripartite agreement under which P&A was to carry out certain works including construction and maintenance. Due to nonpayment of its prescribed fee, P&A invoked the arbitration clause under the tripartite agreement. However, due to refusal of Carboline and Octamec to nominate an arbitrator to constitute the arbitral tribunal, P&A filed a petition before the HC for appointment of the arbitrator under the Arbitration Act.
In the present case, the parties had not disputed the existence of the tripartite agreement and the arbitration clause. The HC had impounded the photocopy of the tripartite agreement as the original was not in possession of either party, and thereafter Octamec had raised an issue that a photocopy of a document is not an “instrument” under the Maharashtra Stamp Act, 1958 and therefore could not have been impounded. The issue under consideration before the HC was whether an arbitrator can be appointed on the basis of a photocopy of an insufficiently stamped agreement, the original of which was lost.
The HC analysed the relevant provisions under the Maharashtra Stamp Act, 1958 in light of the scheme of the Arbitration Act and observed that arbitration is devised to be a speedy mechanism and to await the decision of whether or not stamp duty is to be paid on the agreement even for the purposes of appointment of an arbitral tribunal would defeat the very purpose of arbitration. The HC further clarified that once the parties have acknowledged the signing and existence of the substantive contract containing the arbitration clause, the non-availability of the original agreement will not prevent the court from appointing an arbitral tribunal. Therefore, the HC proceeded with appointment of the arbitrator and left the questions of insufficient stamping or non-availability of the original agreement open for the consideration of the arbitral tribunal.