SUPREME COURT OF INDIA
SANJIV KHANNA, CJI., B.R. GAVAI, SANJAY KUMAR, AUGUSTINE GEORGE MASIH, K.V. VISWANATHAN, JJ.
Gayatri Balasamy – Appellant
VERSUS
M/S. ISG Novasoft Technologies Limited – Respondent
Civil Appeal Nos. OF 2025 (Arising out of S.L.P.(C) Nos. 15336-15337 of 2021) WITH CIVIL APPEAL NO. OF 2025 (Arising out of S.L.P.(C) No.21301 of 2024) CIVIL APPEAL NO. OF 2025 (Arising out of S.L.P.(C) No.17941 of 2019), CIVIL APPEAL NO. OF 2025 (Arising out of S.L.P.(C) No.7973 of 2022), CIVIL APPEAL NOS. OF 2025 (Arising out of S.L.P.(C) Nos.4961-4962 of 2024), CIVIL APPEAL NO. OF 2025 (Arising out of S.L.P.(C) No. of 2025 @ S.L.P.(C) Diary No.7789 of 2024), CIVIL APPEAL NOS. OF 2025, (Arising out of S.L.P.(C) Nos.18656-18663 of 2024), CIVIL APPEAL NO.8183 OF 2016, CIVIL APPEAL NO.8184 OF 2016
Decided on : 30-04-2025
Key Points: - Point 1 (!) (!) (!) (!) - Point 2 (!) (!) (!) - Point 3 (!) (!) (!) (!)
| Table of Content |
|---|
| 1. reference background & framed issues (Para 1) |
| 2. survey of divergent case-law on modification (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 3. parties’ competing contentions on modification power (Para 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 4. limited modification power with severability (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45) |
| 5. doctrine of severability under sec 34(2)(a)(iv) (Para 36) |
| 6. section 33 and 34(4) as safety valves (Para 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65) |
| 7. severability and related principles for enforceability (Para 66 , 67 , 68 , 69 , 70 , 71) |
| 8. post-award interest and settlements; statutory context (Para 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80) |
| 9. article 142 constraints and constitutional limits (Para 81 , 82 , 83 , 84) |
| 10. court has a limited power to modify (conclusion) (Para 85) |
| 11. detailed doctrinal analysis and precedents (Para 86 , 87 , 89 , 90 , 91 , 92 , 93 , 94 , 95 , 96 , 97 , 98 , 99 , 100 , 101 , 102 , 103 , 104 , 105 , 106 , 107 , 108 , 109 , 110 , 111 , 112 , 113 , 114 , 115 , 116 , 117 , 118 , 119 , 120 , 121 , 122 , 123 , 124 , 125 , 126 , 127) |
| 12. correction of clerical and computational errors under section 33 and section 152 cpc (Para 128 , 129 , 130 , 131 , 132 , 133 , 134 , 135 , 136 , 137 , 138 , 139 , 140 , 141) |
| 13. doctrine and application of severability of arbitral awards under section 34 (Para 142 , 143 , 144 , 145 , 146 , 153 , 154) |
| 14. severability and error-correction principles (Para 147 , 148 , 149 , 150 , 151 , 152 , 155 , 156) |
| 15. final answers to reference questions (Para 157 , 158 , 159) |
JUDGMENT :
SANJIV KHANNA, CJI.
1.A three-Judge Bench of this Court, vide order dated 20th February 2024, directed that the Special Leave Petitions in Gayatri Balasamy v. ISG Novasoft Technologies Limited , 2024 SCC OnLine SC 1681 be placed before the Chief Justice of India for an appropriate order. The matter was to be examined to determine the need to refer the following questions of law to a larger Bench:
“1. Whether the powers of the Court under Sections 34 and 37 of the Arbitration and Conciliation Act 1996 will include the power to modify an arbitral award?
2. If the power to modify the award is available, whether such power can be exercised only where the award is severable, and a part thereof can be modified?
3. Whether the power to set aside an award under Section 34 of the Act, being a larger power, will include the power to modify an arbitral award and if so, to what extent?
4. Whether the power to modify an award can be read into the power to set aside an award under Section 34 of the Act?
5. Whether the judgment of this Court in Project Director NHAI vs. M. Hakeem, (2021) 9 SCC 1 followed in Larsen Air Conditioning and Refrigeration Company vs. Union of India, (2023) 15 SCC 472 and SV Samudram vs. State of Karnataka, (2024) 3 SCC 623 lay down the correct law, as other benches of two Judges (in Vedanta Limited vs. Shenzden Shandong Nuclear Power Construction Company Limited, (2019) 11 SSC 465, Oriental Structural Engineers Pvt. Ltd. vs. State of Kerala, (2021) 6 SCC 150 and M.P. Power Generation Co. Ltd. vs. Ansaldo Energia Spa), (2018) 16 SCC 661 and three Judges (in J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd., (2008) 2 SCC 444, Tata Hydroelectric Power Supply Co. Ltd. vs. Union of India, (2003) 4 SCC 172 and Shakti Nath vs. Alpha Tiger Cyprus Investment No.3 Ltd., (2020) 11 SCC 685) of this Court have either modified or accepted modification of the arbitral awards under consideration?”
2. Accordingly, this Bench of five-Judges has been constituted to decide the questions referred.
3. The fulcrum of the legal controversy rests on the following question(s): Are Indian courts jurisdictionally empowered to modify an arbitral award? If so, to what extent? The controversy arises because the Arbitration and Conciliation Act, 1996, 1
Oriental Structural Engineers Private Limited vs. State of Kerala
Shakti Nath and Others vs. Alpha Tiger Cyprus Investment No.3 Limited and Others
Gayatri Balasamy v. ISG Novasoft Technologies Limited
McDermott International Inc. v. Burn Standard Co. Ltd. and Others
Pure Helium India (P) Limited v. Oil & Natural Gas Commission
Mukand Ltd. v. Hindustan Petroleum Corpn. Ltd.
Vedanta Limited v. Shenzhen Shandong Nuclear Power Construction Company Limited
Oil and Natural Gas Corporation Limited v. Western GECO International Limited
Numaligarh Refinery Ltd. v. Daelim Industrial Co. Ltd.
Tata Hydro-Electric Power Supply Co. Ltd. and Others v. Union of India
Maharashtra State Electricity Distribution Company Limited v. Datar Switchgear Limited and Others
Parsa Kente Collieries Limited v. Rajasthan Rajya Vidyut Utpadan Nigam Limited
M.P. Power Generation Co. Ltd. v. ANSALDO Energia SpA
Oriental Structural Engineers Private Limited v. State of Kerala
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Budhia Swain and Others v. Gopinath Deb and Others
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Dyna Technologies Private Limited v. Crompton Greaves Limited
I-Pay Clearing Services Private Limited v. ICICI Bank Limited
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Vishaka and Others Vs. State of Rajasthan and Others
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J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. and Another
Madhya Pradesh Power Generation Company Limited and Another vs. Ansaldo Energia Spa and Another
Vedanta Limited vs. Shenzhen Shandong Nuclear Power Construction Company Limited
CIT, Central Calcutta vs. National Taj Traders
Ramesh Rout v. Rabindra Nath Rout
Juggilal Kamlapat v. General Fibre Dealers Ltd.
Dyna Technologies Private Limited v. Crompton Greaves Limited, (2019) 20 SCC 1 [Paras 87
Shamnsaheb M. Multtani vs. State of Karnataka
Manohar Lal Chopra Vs. Rai Bahadur Rao Raja Seth Hiralal
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Som Datt Builders Ltd. v. State of Kerala
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