Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 05.10.2026
Delhi HC: Unstamped Arbitral Award Cannot Be Enforced Until Stamp Duty Formalities Are Completed
This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .
The Delhi High Court has held that an unstamped arbitral award cannot be executed, and consequently declined British Marine PLCβs request for release of the balance amount of over βΉ213.24 crore deposited by Steel Authority of India Ltd. (SAIL), despite the latterβs challenge under Section 34 and subsequent appeal under Section 37 of the Arbitration and Conciliation Act, 1996 having already been dismissed.
The Court, however, permitted the decree holder to bring the original arbitral award before the Court, complete the requisite stamp-duty formalities and thereafter seek enforcement and release of the balance amount through a fresh application.
Background of the Dispute
- The proceedings arose from enforcement of an arbitral award in favour of British Marine PLC, the decree holder, against Steel Authority of India Ltd., the judgment debtor.
- During the enforcement proceedings, SAIL deposited a total amount of βΉ230,33,32,891, representing 50% of the decretal amount at the applicable conversion rate, pursuant to earlier orders of the Delhi High Court. The deposits were made in different tranches with the Registrar General of the Court.
- British Marine subsequently sought release of the deposited amount.
βΉ17.09 Crore Earlier Released Against Bank Guarantee
- On 11 November 2024, the High Court had permitted release of a portion of the deposited amount subject to British Marine furnishing a bank guarantee.
- Accordingly, British Marine furnished a Bank Guarantee of βΉ17,09,25,000, dated 7 April 2025, issued by ICICI Bank. The corresponding amount was released to British Marine on 8 December 2025.
- Significantly, SAIL’s petition challenging the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 was subsequently dismissed. Its appeal under Section 37 was also dismissed by the Division Bench of the Delhi High Court.
- SAIL acknowledged before the Court that there was no stay from the Supreme Court operating against the award or enforcement proceedings.
- Considering these circumstances, the High Court held that no purpose would be served by continuing the bank guarantee and ordered the βΉ17.09 crore bank guarantee to be discharged and released to British Marine.
British Marine Seeks Release of Remaining βΉ213.24 Crore
- British Marine separately sought release of the remaining βΉ2,13,24,07,891, after deducting the βΉ17.09 crore already released from the total amount deposited by SAIL.
- The Court recorded that SAIL’s Section 34 petition had been dismissed on 13 October 2025, while its Section 37 appeal, FAO (OS) COMM. 17/2026, was dismissed on 17 September 2026.
- SAIL informed the Court that although it had filed a Special Leave Petition before the Supreme Court, no stay had been granted.
- It nevertheless raised a technical but crucial objection: the arbitral award was unstamped, and an unstamped award could not be executed.
Delhi High Court Examines Stamp Duty Requirement
Justice Vinod Kumar referred to the recent decision of a Coordinate Bench in:
- M/s URC Construction (P) Ltd. v. Airports Authority of India, OMP (ENF.) (COMM.) 155/2026, decided on 1 September 2026.
- The Court noted that the decision had examined the issue in detail and held that the requirements of the Indian Stamp Act, 1899, the Registration Act, 1908, and the procedural mandate of the Court were required to be strictly followed.
Original Award Was Before the Supreme Court
- An unusual practical difficulty then arose.
- Both parties informed the High Court that the original arbitral award was not before the Delhi High Court. It was lying in a sealed cover in connection with proceedings before the Supreme Court pursuant to directions passed on 14 September 2022 in Steel Authority of India Limited v. British Marine PLC, Civil Appeal No. 11384 of 2016.
- The Supreme Court’s earlier order had given SAIL liberty to raise objections available in law before the competent High Court and had made arrangements for copies of the award kept in sealed cover to be made available to the parties.
Copy of Award Cannot Substitute Original for Stamping
- The Delhi High Court observed that an arbitral award is a chargeable instrument under Article 12 read with Article 15 of Schedule IA of the Indian Stamp (Delhi Amendment) Act, 2001.
- The crucial difficulty was that the original award was unavailable before the Court. According to the Court, the copy of the award could neither be stamped nor impounded under the Stamp Act, 1899.
- Since the award remained unstamped, the Court concluded that it could not presently be executed. Consequently, the substantial balance deposited with the Registry could not yet be released to British Marine.
Court Refuses Release of βΉ213.24 Crore
- The High Court therefore dismissed British Marine’s application for immediate release of the balance amount.
- Importantly, this was not a rejection of British Marine’s entitlement under the arbitral award on merits. Rather, the impediment identified by the Court concerned the award’s enforceability until the applicable stamping requirements were completed.
The Court expressly granted British Marine liberty to:
- take steps to bring the original arbitral award before the Delhi High Court;
- present the original award before the Court;
- complete the necessary formalities relating to payment of stamp duty in accordance with law; and
- thereafter file a fresh application for release of the balance amount.
The Court stated that the award could be enforced after completion of these formalities.
Two Distinct Outcomes in the Same Order
- The order therefore resulted in two materially different outcomes.
- First, British Marine succeeded in securing the discharge of the βΉ17.09 crore bank guarantee, because the corresponding amount had already been released and SAIL’s Section 34 and Section 37 challenges had failed, with no Supreme Court stay operating.
- Second, British Marine’s request for release of the remaining βΉ213.24 crore was rejected for the time being, because the original arbitral award had not been produced for completion of the statutory stamping requirements.
Legal Significance
- The ruling highlights the distinction between the validity of an arbitral award and the procedural/statutory requirements governing its enforcement.
- Even where challenges under Sections 34 and 37 have failed and there is no stay from the Supreme Court, the decree holder must still satisfy the legal requirements applicable to execution of the award. On the facts before it, the Delhi High Court treated proper stamping of the original award as a prerequisite to enforcement.
- For parties engaged in high-value commercial arbitration, the decision underscores the importance of ensuring that the original award is available and the applicable stamp-duty requirements are addressed before or during enforcement proceedings, particularly where substantial sums have already been secured or deposited before the Court.
Key Takeaway
An arbitral award cannot be enforced merely because challenges under Sections 34 and 37 have failed. Where the award remains unstamped, the Delhi High Court held that enforcement and release of deposited sums must await production of the original award and completion of the applicable stamp-duty formalities.
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Source: Delhi High Court
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