This article was first published in www.lexology.com (February, 18, 2025).
Imposing stamp duty on arbitral awards seems rather unusual, as these two concepts don’t naturally go together. Stamp duty is a government tax levied on ‘instruments,’ which are documents that outline the rights and obligations of the parties involved. Typically, stamp duty is associated with contracts or deeds of conveyance entered into by consenting parties. In contrast, an arbitral award is the resolution of claims submitted to arbitration by two or more disputing parties, akin to a court judgment. After an award is issued, the prevailing party can file for its enforcement. This distinction is why prominent arbitration hubs like Singapore and the United Kingdom do not categorise arbitral awards as instruments subject to stamp duty. These common law jurisdictions prefer to impose stamp duty on documents, such as deeds or agreements, rather than awards. Hence, the requirement to pay stamp duty on domestic awards – those arising from India-seated arbitrations – appears to be peculiar to the Indian legal system.
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Authors
- Ritika Bansal and Viral Mehta
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