Case: M/S SHRIRAM EPC LIMITED Vs. RIOGLASS SOLAR SA

does not carry us much further.20. On the other hand, the Madhya Pradesh High Court judgment (supra) hits nearer home. This judgment, in paragraph 12 thereof, states why foreign awards do not have to suffer stamp duty in the following terms:?12. The Law on Arbitration in India was substantially contained in three enactments namely, The Arbitration Act, 1940, The Arbitration (Protocol and Convention) Act, 1937 and The Foreign Awards (Recognition and Enforcement) Act, 1961. It was widely felt the 1940 Act, which contains the General Law of Arbitration, has become outdated. The Arbitration and Conciliation Act, 1996 came in force to consolidate and amend the Law relating to Domestic Arbitrations, International Commercial Arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation, commission on international trade in short (UNCITRAL) Model Law and Rules. Apart from other object, the object of the Act is to provide that every final arbitral award is enforced in the same manner as if it were a decree of the Court. While Arbitration and Conciliation Act, 1996 was enforced, no amendment was made in the definition of award given in the Indian Stamp Act. Similarly, the Schedule which lays down the stamp duty payable on award was not amended by including the foreign award. It appears that law makers while enforcing the Arbitration and Conciliation Act, 1996 was of the view that foreign award shall be enforceable as if it were a decree of the Court, no amendment was brought either in the definition of award or in the Schedule relating to payment of stamp duty on award. Since the definition of award given at Entry No. 11 of the Schedule of the Indian Stamp Act does not cover the foreign award and one of the objects to enforce the new Act was to enforce final award as if it was a decree and keeping in view the law laid down by the Honble Apex Court in the matter of Fuerst Day Lawson Ltd. (supra), wherein the Honble Supreme Court has held that under the new Act the foreign award is already stamped as decree, this Court is of the view that the petition filed by the petitioner has no merits and deserves to be dismissed. In view of this, the petition filed by the petitioner is disposed of holding that foreign award is already stamped and is enforceable as decree.?21. The reasoning contained in paragraph 12 has our approval, short of the reasoning contained following Fuerst Day Lawson (supra) which, as we have already stated above, did not indicate that foreign awards can never suffer stamp duty.22. The other judgment heavily relied upon by Shri Viswanathan, namely the Gujarat High Court judgment (supra), merely refers to Article III of the New York Convention to state that so far as procedural aspects relatable to foreign awards are concerned, we must go by the Code of Civil Procedure, and going by the Code of Civil Procedure, the Court at Bhavnagar would have no jurisdiction to enforce the foreign award in the facts of that case. Since Article III of the New York Convention is strongly relied upon by Shri Viswanathan, we need to set it out. It states:?Article III Each Contracting State shall recognise arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.?23. 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, as we have held earlier in this judgment, is not the case. Equally, reliance upon the 194 th Law Commission of India Report, insofar as stamp duty on domestic awards is concerned, would again have little bearing, given our finding that under the present state of the law, foreign awards are not liable to stamp duty under the Indian Stamp Act, 1899.24. An argument was made by learned counsel for the Respondent 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. We are afraid that this again is an extreme argument. All that Section 47 deals with is production before the Court of proof of the fact that a foreign 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 policy of India, must be rejected. The fundamental policy of Indian law, as has been held in Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644, and followed in Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49 , makes it clear that if a statute like the Foreign Exchange Regulation Act, 1973 dealing with the economy of the country is concerned, it would certainly come within the expression ?fundamental policy of Indian law?. The Indian Stamp Act, 1899, being a fiscal statute levying stamp duty on instruments, is also an Act which deals with the economy of India, and would, on a parity of reasoning, be an Act reflecting the fundamental policy of Indian law. This argument on behalf of the Respondent must also, therefore, be rejected.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]16. It will thus be seen that ?award? under Item 12 of Schedule I of the Indian Stamp Act, 1899 has remained unchanged till date. As has been held by us hereinabove, 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 Indian 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, we are of the view that 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 Indian Stamp Act, 1899, is not liable for stampcannot forget that there is no challenge stage so far as a foreign award is concerned – so long as none of the grounds in Section 48 are attracted, the award becomes enforceable as a decree. The stage of enforceability, therefore, has arisen in these cases, and it cannot be said that the ratio of M. Anasuya (supra) would apply so that stamp duty would become payable only at some subsequent stage. This judgment is equally incorrect in stating that Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2001) 6 SCC 356  , would apply.An argument was made by learned counsel for the Respondent 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. We are afraid that this again is an extreme argument. All that Section 47 deals with is production before the Court of proof of the fact that a foreign 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 policy of India, must be rejected. The fundamental policy of Indian law, as has been held in Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644, and followed in Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49  , makes it clear that if a statute like the Foreign Exchange Regulation Act, 1973 dealing with the economy of the country is concerned, it would certainly come within the expression ?fundamental policy of Indian law?. The Indian Stamp Act, 1899, being a fiscal statute levying stamp duty on instruments, is also an Act which deals with the economy of India, and would, on a parity of reasoning, be an Act reflecting the fundamental policy of Indian law. This argument on behalf of the Respondent must also, therefore, be rejected.