The Supreme Court reiterated the principle of minimal judicial intervention in arbitration cases, advising High Courts to generally avoid interfering with arbitral tribunal orders under Section 16 of the Arbitration and Conciliation Act during ongoing arbitration proceedings. The case involved a mine owner, Tarini Prasad Mohanty, appealing against a decision of the Orissa High Court’s division bench related to insufficiently stamped agreements concerning the sale of iron ore in 2004 with Sunflag Iron and Steel Company Limited.
The mine owner objected during arbitration proceedings, citing inadequate stamping of the agreements, which the arbitral tribunal later ruled as properly stamped “agreements to sell” and not “conveyance” as claimed. Despite a single-judge bench initially directing impounding of the agreements for stamp duty payment, the division bench overturned this decision, stating that the judge had overstepped by delving into contractual disputes.
The apex court upheld the division bench’s stance, emphasizing that parties should generally await the final arbitration award before seeking remedies under Section 34 of the Arbitration and Conciliation Act. It clarified that stamping issues are within the arbitral tribunal’s jurisdiction and not for High Courts to intervene under constitutional provisions. The court also highlighted that non-stamping or inadequate stamping is a “curable defect” and does not invalidate agreements, allowing the arbitrator to address stamping objections.
