In SMS Tea Estates, the deed of lease was neither stamped nor registered, and it was therefore stated that “where a deed of tenancy or other instrument is used as a dispute against the arbitration agreement, the court should verify from the outset whether or not an objection is raised on that behalf, whether the document is properly stamped. If it is concluded that it is not properly stamped, it should be seized and dealt with in the manner defined in section 38 of the Stamps Act. The Tribunal cannot react to such a document or the arbitration clause contained therein. However, if the deficit tax and penalty are paid in the manner set out in section 35 or section 40 of the Stamps Act, the document may be considered as evidence or may be admitted. However, this section is also an exception to the following rule and states that an unregistered document, which relates to and must be registered, may be used for the following purposes: this has been cemented by the Supreme Court by declaring that an agreement will only become a contract if it becomes enforceable under the law, and under the Indian Stamp Act, an agreement will not be enforceable by law if it is not or is mis-stamped. Therefore, an arbitration clause contained in such an agreement would not exist if it is not applicable. 2. With regard to the document, which is compulsorily registered but not registered, the court may, taking into account Article 16(1)(a) of the Act, dissociate the arbitration agreement from the main document as an agreement independent of the other terms of the contract, even if the document itself cannot affect the immovable property or cannot be obtained as evidence of a transaction, which relates to this property. In accordance with Article 7(2), an arbitration agreement may be concluded between the parties in the form of an arbitration clause in a contract or in the form of a separate agreement. Section 11 of the Arbitration Act deals with the appointment of arbitrators.
Section 11(6) of the Arbitration Act provides, among other things, that if a party does not act or does not declare itself willing to appoint the arbitrator under an arbitration agreement, the party may apply to the Supreme Court or, as the case may be, the Supreme Court or any person or institution designated by that court to take the necessary action. The competent supreme judge or the person or institution designated by the senior judge shall then appoint the arbitrator(s). § 16, para. 1 of the Arbitration Act provides that the arbitral tribunal may rule on its own jurisdiction, including the decision on objections to the existence or validity of the arbitration agreement, and to that end (a) an arbitration clause forming part of a contract shall be treated as an agreement independent of the other terms of the contract; and (b) a decision of the arbitral tribunal that the contract is void shall ipso jure not ipso jure result in the invalidity of the arbitration clause. . . .