Supreme Court: Arbitration Clause in Unstamped Agreement Not Invalidated; Stamp Duty Curable

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Published 28 October 2026

Case: M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation
Court: Supreme Court of India
Citation: 2026 LiveLaw (SC) 1096
Statutes: Arbitration and Conciliation Act, 1996
Indian Stamp Act, 1899
Source: LiveLaw

Bottom Line Up Front (BLUF)

In M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation, 2026 LiveLaw (SC) 1096, the Supreme Court held that an arbitration clause in an unstamped agreement is not rendered invalid. The Court clarified that the deficiency in stamp duty is a curable defect, allowing the agreement to be admitted into evidence upon payment of the requisite stamp duty and penalty.

Ratio Decidendi · Legal Principle Established

An arbitration clause in an unstamped agreement is not invalid and such an agreement can be admitted into evidence upon payment of the deficient stamp duty and penalty, as the defect is curable.

Practice & Procedural Impact for Advocates

Advocates should ensure agreements are properly stamped to avoid delays. If an agreement is unstamped, parties can still invoke arbitration, but must be prepared to pay stamp duty and penalty to cure the defect. Litigants should be aware that the lack of stamping does not nullify an arbitration clause.

Key Legal Takeaways

1An unstamped agreement containing an arbitration clause is not void.
2Deficiency in stamp duty is a curable defect.
3The agreement can be admitted into evidence after payment of stamp duty and penalty.

The Legal Issue The Supreme Court addressed the question of whether an arbitration clause contained within an unstamped agreement is rendered invalid due to the lack of proper stamping. This issue often arises in commercial disputes where parties seek to enforce arbitration agreements that have not been duly stamped as per the provisions of the Indian Stamp Act, 1899.

Court's Reasoning The Supreme Court, in M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation, 2026 LiveLaw (SC) 1096, clarified that an arbitration clause in an unstamped agreement is not invalid. The Court reasoned that the deficiency in stamp duty is a curable defect, not one that renders the entire agreement, including its arbitration clause, void or unenforceable. The Court held that such an agreement can be admitted into evidence once the requisite stamp duty and any applicable penalty are paid. This approach ensures that the substantive rights of the parties, particularly their agreement to arbitrate, are not defeated by a procedural irregularity that can be rectified.

What Follows Parties seeking to enforce an arbitration clause in an unstamped agreement must pay the deficient stamp duty along with any penalty prescribed by law. Upon such payment, the agreement will be admissible in evidence, allowing the arbitration proceedings to commence or continue. This ruling provides clarity for courts and arbitral tribunals on how to handle unstamped agreements containing arbitration clauses, preventing unnecessary dismissal of arbitration applications on this ground alone.