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M/S URC Construction (P) Ltd. vs. Airports Authority of India

Enforcement Petition (Commercial Arbitration) · 2026:DHC:7520Decided 1 Sept 2026New Delhi Bench
OMP (ENF.) (COMM.) 155/2026CNR: DLHC010313232026
Justice Om Prakash Shukla

Background

URC Construction sought to enforce an arbitral award dated 26.03.2019 (corrected on 07.05.2019) awarding it roughly Rs 2.59 crore plus interest against the Airports Authority of India. The Court noticed that the award had originally been stamped with only Rs 100 in duty, and the decree holder only paid the balance stamp duty (Rs 25,850) shortly before the hearing: years after the award was signed. This raised a larger question the Court examined in detail: when must stamp duty actually be paid on an arbitral award, and can a decree holder simply pay the shortfall unilaterally, right before enforcement, without any penalty?

Decision Breakdown

After an extensive review of the Indian Stamp Act and the Arbitration and Conciliation Act, the Court held that the two statutes operate independently: enforcement of an award is not what triggers the stamp duty requirement; rather, stamp duty becomes due when the award is signed, and must ordinarily be paid within one month of signing. A Supreme Court ruling that objections to insufficient stamping cannot be raised at the award-challenge stage (Section 34) only defers when such an objection can be raised: it does not excuse late or penalty-free payment. The Court found it has no power to waive the statutory penalty for late stamping (that power lies only with the Collector of Stamps), and it is legally bound to "impound" (formally flag and set aside) any arbitral award that is not adequately stamped rather than simply act upon it. The Court impounded the award in this case, directed the decree holder to produce the original award before the Joint Registrar so the stamp-duty shortfall and penalty could be assessed by the Collector, and issued detailed, forward-looking practice directions for how all future enforcement petitions in the Delhi High Court must declare and prove stamp duty compliance.

Lesson Learnt

Anyone relying on an arbitral award to recover money must ensure it is properly stamped within a month of the award being signed, waiting until enforcement to "cure" an underpaid stamp duty, without also paying the prescribed penalty, will not be accepted by the court, and the enforcement process can be held up until the Collector of Stamps assesses and resolves the deficiency.

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