[Akash Kumar Surya is a 3rd year B.A., LL.B. (Hons.) student at the National Law School of India University, Bengaluru] In the case of In Re: Interplay the Supreme Court recently delivered its verdict on the legal position of unstamped arbitration agreement in India. The judgement has settled the issue, bringing clarity on a matter whose jurisprudence has otherwise been marked by chequered...
Unstamped Arbitration Agreements: Will the Wheels Stop Spinning?
On 13 December 2023, a seven-judge bench of the Supreme Court rendered its verdict in In Re: The Interplay between arbitration agreements under the Arbitration and Conciliation Act, 1996, and the Indian Stamp Act, 1899 (“In Re: The Interplay”) on the validity and enforceability of unstamped arbitration agreements. This issue had become a matter of some consternation for the arbitration community...
Stamping Out Uncertainty: Resolving the Conundrum of Unstamped Arbitration Agreements
[Hrishikesh Goswami and Aryan Soni are 3rd year students at the Gujarat National Law University, Gandhinagar] The enforceability of arbitration clauses within inadequately stamped agreements has been a longstanding matter of legal scrutiny, with divergent opinions and decisions from various courts, including the Supreme Court. However, a significant resolution was achieved on December 13, 2023...
Pre-Deposit Clauses in Arbitration Contracts: Analyzing the LombardiEngineering Case
[Suyash Pandey is a third year B.A., LL.B. (Hons.) student at the National Law School of India University, Bangalore] Recently, the Supreme Court (‘SC’) in Lombardi Engineering Limited v. Uttarakhand Jal Vidyut Nigam Limited has invoked Article 14 of the Constitution of India to test the validity of the pre-deposit arbitration agreement between Lombardi Engineering (‘LE’) and Uttarakhand Project...
Supreme Court Clarifies the Extent of Liability of Personal Guarantors under the IBC
[Tanisha Gautam is a 4th year B.A. LL.B. (Hons.) student at the Institute of Law, Nirma University, Ahmedabad] The impact of a personal guarantee in relation to a corporate debtor undergoing insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (the “Code”) has raised interesting legal issues. A personal guarantee refers to a promise made by an individual (the guarantor) to assume...
An Endeavour to Understand the “Endeavours” Clause and its “Legal Transplant” in India
[Shinoj Koshy and Radhika Malpani are with Luthra and Luthra Law Offices] Globalisation has led to a significant increase in the cross-border transactions and this in turn has led to “legal transplants” – a phenomenon where contracts memorializing cross-border transactions tend to include legal terms and concepts which are prevalent in other legal systems. The term “legal transplant” was coined...
Revival of Time-Barred Debts
[Mihir Modi is an Associate with PSL Advocates and Solicitors in Mumbai] According to the Limitation Act 1963 (‘the Limitation Act’), there is a set time limit for filing appeals and instituting lawsuits in various courts. The Limitation Act is based on the idea that there must be a strict time limit for bringing appropriate actions in the courts. In doing so, it protects only the diligent...
Balancing Contractual Autonomy vis-à-vis Application of Section 74 of the Contract Act, 1872: Part II
[Lavanya Pathak and Pallavi Mishra are advocates practicing at the Delhi High Court. This is a continuation from Part I] Position Taken by High Courts at Bombay, Delhi and Madras The recent judgements rendered by High Courts at Bombay, Delhi and Madras (discussed below) are instructive when it comes to offering clarity on the SC’s understanding of the law on liquidated damages and penalties. In...
Balancing Contractual Autonomy vis-à-vis Application of Section 74 of the Contract Act, 1872: Part I
[Lavanya Pathak and Pallavi Mishra are advocates practicing at the Delhi High Court.] The concept of ‘liquidated damages’ and ‘penalty’ was originally intended to be omitted from the realm of the Indian law by careful usage of the phrase “sum named in the contract” under section 74 of the Contract Act, 1872 (“Contract Act”). However, following the amendment brought about in 1899, the scope of...
Material Adverse Government Action (MAGA): Need for a PPP Framework in India
[Sri Janani S. is a 3rd year B.A., LL.B. (Hons.) student at National Law University, Jodhpur] In the recent years, public-private partnerships (“PPPs”) have been increasing manifold in India. The state is recognizing the private sector’s indispensable role in the infrastructure sector, urban water projects, healthcare and even in the development of electric vehicles. The Government is encouraging...
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