SANJIV KHANNA, B. R. GAVAI, SANJAY KUMAR, AUGUSTINE GEORGE MASIH, K. V. VISWANATHAN
Gayatri Balasamy – Appellant
Versus
ISG Novasoft Technologies Limited – Respondent
One Indian decision that explicitly recognizes the court's power to partially set aside or sever parts of an arbitral award is a case involving a dispute over claims that were independently and separately adjudicated. The court held that when the award contains multiple claims or issues, and some of those are legally and practically separable, the court can exercise its authority to excise or sever the invalid portion without affecting the enforceability of the remaining valid parts. This decision underscores that the award must be capable of being divided into self-contained components, which are not inseparably intertwined, to justify partial setting aside. The ruling emphasizes that such a severance preserves the enforceability of the rest of the award and aligns with the principles of judicial restraint and the doctrine of severability.
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
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