Our company is the payee of an unstamped bill of exchange that states ''pay to the order of XYZ or order after 180 days of acceptance....'' We propose to enforce the bill of exchange through court as the drawee has failed to honour it. However, we have been informed that an unstamped bill of exchange will be inadmissible in court. Please advise.

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Your unstamped bill of exchange may be admissible as evidence in court in proceedings against the drawee if you can prove that your bill of exchange is exempt from stamping under the Indian Stamp Act, 1899 (Stamp Act). Bills of exchange ''payable on demand'' are exempt from stamping under the Stamp Act and are admissible in evidence, as such, while bills of exchange ''payable otherwise than on demand'' are subject to stamp duty and can be admitted in court proceedings against the drawee only if properly stamped.

Now, whether your unstamped bill of exchange is ''payable on demand'' or ''payable otherwise than on demand'' is debatable due to a variation in the description of a bill of exchange ''payable on demand'' provided under the Stamp Act and the Negotiable Instruments Act, 1881. According to the Stamp Act, a bill of exchange payable on demand includes an order for the payment of any sum of money weekly, monthly, or at any other stated period, while, in terms of the Negotiable Instruments Act, a bill of exchange payable on demand is one in which no time for payment is specified.

Indian courts have held divergent views on the classification of a bill of exchange. While the Delhi High Court has held that ''an instrument containing a promise of payment after 180 days of the date of its execution cannot be held to be a bill of exchange payable on demand'', the Rajasthan High Court has in a later decision on similar facts held that the question of chargeability of an instrument with stamp duty must be decided solely with reference to the provisions of the Stamp Act. Accordingly, a bill of exchange stipulating payment after a specified number of days is a bill of exchange payable on demand.

While classification of your bill of exchange cannot be conclusively determined due to conflicting decisions of the high courts, the reasoning of the Rajasthan High Court appears to be more tenable, apart from being in your favour. Since bills of exchange payable otherwise than on demand should be stamped at the time of execution only and cannot be cured by subsequent stamping, the safer recourse of stamping the bill of exchange now is not available to you. You, therefore, have the option to invoke court proceedings against the drawee to recover the payment under the bill of exchange while taking a stand (if such issue is raised) that your bill of exchange is ''payable on demand'' and, therefore, admissible without stamping.

Our arbitration agreement provides for arbitration to be conducted in terms of uncitral Model Law. There is, however, a problem with respect to the venue of arbitration as a dispute between the parties has arisen and the arbitration clause states the venue to be ''either New Delhi or Singapore, as agreed by the parties''. Please advise.

In terms of Article 20 of the uncitral Model Law on International Commercial Arbitration, parties are free to agree on the venue of arbitration. However, uncitral permits the arbitral tribunal to determine the venue where the parties may have agreed to more than one venue for arbitration in the arbitration agreement, but due to a subsequent dispute (to be resolved through arbitration), the parties fail to decide the venue of arbitration itself.

You should, therefore, take steps towards the constitution of an arbitral tribunal. Once the arbitral tribunal is constituted, it can decide the venue of arbitration taking into account all material circumstances of your case, including convenience of parties and their witnesses, the subject matter of the reference and the balance of convenience.

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