1. Reference to a five-judge bench to determine if courts under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 can modify arbitral awards. (Para 1 , 2 )
Back
Next 
2025 Supreme(SC) 751
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
Important Points
The court has a limited and defined power under Section 34 and related provisions: it may sever invalid parts and correct clerical errors, or remand for cure, but it cannot engage in merits-based modification of an arbitral award; modification is not permitted except for narrowly defined corrective/remedial steps within statutory guardrails.
Subject
Arbitration Law - Modification of Awards
Act Referred
ENGLISH ARBITRATION ACT: S.71
FEDERAL ARBITRATION ACT: S.10, S.11
NATIONAL HIGHWAYS AUTHORITY ACT: S.15
Republic Act: S.25, S.41, S.46
UK English Arbitration Act: S.71
FEDERAL ARBITRATION ACT: S.10, S.11
NATIONAL HIGHWAYS AUTHORITY ACT: S.15
Republic Act: S.25, S.41, S.46
UK English Arbitration Act: S.71
Headnote
(A) Relevant laws and sections cited: Arbitration and Conciliation Act, 1996 - Section 5 (Extent of judicial intervention): "Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part."; Section 34 - "Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and (3)"; Section 34(2)(a)(iv) proviso - "Provided that, if the decisions on matters submitted to arbitration can be separated, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside"; Section 34(2)(a)(v) - grounds relating to agreement and procedure; Section 34(2)(b) - grounds for public policy (including Explanation 1 and 2); Section 34(2A) - patent illegality appearing on the face of the award; Section 34(3) - time limits; Section 34(4) - remand to arbitral tribunal; Section 43(4) - exclusion of time during arbitration; Section 33 - Correction and interpretation of award; additional award; Section 31 - form and contents of arbitral award (including post‑award interest provisions); Section 37 (appeals); Article 142 of the Constitution (complete justice); UNCITRAL Model Law (Model Law); Annexure A to judgment; Doctrine of severability; Omne majus continet in se minus. (Quoted references include but are not limited to the quoted phrases above and related explanatory provisions cited in the judgment.)
Judgement Key Points
Key Points: - Point 1 (!) (!) (!) (!) - Point 2 (!) (!) (!) - Point 3 (!) (!) (!) (!)
Question 1?
Question 2?
Question 3?
Legal Category Hierarchy
-
practice and procedure
- arbitration
- constitutional law
Advocates appeared:
For the Petitioner(s): Mr. Debmalya Banerjee, Adv. Mr. Rohan Sharma, Adv. Mr. Vikas Gogne, Adv. Mr. Satyam Chaturvedi, Adv. Mr. Agastya Shelat, Adv. Ms. Tanvi Seth, Adv. M/s. Karanjawala & Co., AOR Mr. Tushar Mehta, SG Mr. Sudarshan Lamba, AOR Mr. Kanu Agarwal, Adv. Mr. Ashwin Shanker, Adv. Mr. Sanjay Grover, Adv. Ms. Ridhi Nyati, Adv. Ms. Vanshika Jain, Adv. Mr. Shivlal Singh, Adv. Mr. K.V. Mohan, AOR Mr. Vaibhav Dang, Adv. Mr. Amrendra Kumar Mehta, AOR Ms. Anita Mahapatra, Adv. Ms. Gunjan Kumari, Adv. Mr. Jinendra Jain, AOR Mr. Ajay Jain, Adv. Mr. Krishna Sharma, Adv. Ms. Bijay Lakshmi, Adv. Mr. M.N. Mishra, Adv. Mr. Manoj Gautam, Adv. Mr. Kunaal Sharma, Adv. Mr. Akul Chalia, Adv. Mr. Harshit Batra, Adv. Mr. Mitika Choudhary, Adv. Ms. Shreya Jain, Adv. Mr. Akshat Jain, Adv. Mr. R.C. Bansal, Adv. Mr. T. Harish Kumar, AOR Mr. Bharathi Subramanian, Adv. Mr. Shubham P. Chopra, Adv. Mr. Arvind Datar, Sr. Adv. Mr. Nishanth Patil, AOR Mr. M.V. Mukunda, Adv. Mr. Mithun Shashank, Adv. Mr. M.V. Swaroop, Adv. Ms. Payal Chawla, Adv. Ms. Hina Shaheen, Adv. Mr. Arijit Dey, Adv. Mr. Manish K. Bishnoi, AOR Mr. Khubaib Shakeel, Adv.
For the Respondent(s): Mr. Saurabh Kirpal, Sr. Adv. Ms. Manmeet Kaur, Adv. Mr. Debmalya Banerjee, Adv. Mr. Rohan Sharma, Adv. Mr. Gurtej Pal Singh, Adv. Mr. Rohan Anand, Adv. Mr. Jai Dogra, Adv. Ms. Liza Vohra, Adv. Mr. Dhruv, Adv. M/s. Karanjawala & Co., AOR Mr. Naresh Markanda, Sr. Adv. Mr. Rohan Markanda, Adv. Mrs. Harsheen Madan Palli, Adv. Mr. Chritarth Palli, AOR Mr. Ritin Rai, Sr. Adv. Mr. Benny P. Thomas, Sr. Adv. Mr. Abel Tom Benny, Adv. Mr. Abhishek Kshetarpal, Adv. Ms. Ritika Sinha, Adv. Ms. Ankita Gupta, Adv. Mr. Dhiliban Varadarajan, Adv. Mr. Debasis Jena, Adv. Mr. Prakash Ranjan Nayak, AOR Mr. Tushar Mehta, S.G. Mr. Surjendu Sankar Das, AOR Ms. Annie Mittal, Adv. Mr. Tushar Mehta, S.G. Mr. Nikilesh Ramachandran, AOR Mr. Lovekesh Aggarwal, Adv. Ms. Neelam Rathore, Adv. Mr. Shubham Seth, Adv. Ms. Prakruti Malhotra, Adv. Mr. Abhinav Sharma, Adv. Mr. Alok Tripathi, AOR Mr. Vikramjit Banerjee, ASG Mr. Sudarshan Lamba, AOR Mr. Rahul G. Tanwani, Adv. Mr. Anantha Narayana M.G., AOR Mr. Shubhendu Anand, Adv. Mr. Tadimalla Bhaskar Gowtham, Adv. Mr. Ayush Anand, Adv. Mr. Sudipto Sircar, Adv. Mr. Aditya Shekhar, Adv. Mr. Rishi Ashok, Adv. Mr. P.D.V. Srikar, Adv. Mr. Aman Shukla, Adv. Mr. Alabhya Dhamija, Adv. Mr. Aditya Kashyap, Adv. Mr. Neeleshwar Pavani, Adv. Mr. M. Chandrakanth Reddy, Adv. Mr. Suvigya Awasthy, Adv. Mr. Sameer Jain, Adv. Mr. Vivek Joshi, Adv. Mr. Rohan Gulati, Adv. Mr. Deepesh Raj, Adv. Mr. Soayib Qureshi, AOR Mr. Tushar Mehta, S.G. Mr. Ankur Mittal, Adv. Mr. Abhay Gupta, Adv. Ms. Nidhi Mittal, Adv. Mr. U.C. Mittal, Adv. Ms. Ikshita Parihar, Adv. Mr. Sanjivan Chakraborty, Adv. Mr. Rakshit Ranjan, Adv. Mr. Ankur Saboo, Adv. Mr. Aviraj Pandey, Adv. Mr. Kaustubh Prakash, AOR Ms. Hita Sharma, Adv. Ms. Tanya Singh, Adv. Mr. Gourab Banerji, Sr. Adv. Mr. George Pothan Poothicote, Adv. Ms. Manisha Singh, Adv. Ms. Jyoti Singh, Adv. Mr. Prakarsh Kumar, Adv. Mr. Rakesh Talukdar, Adv. Mr. T.S. Sundaram, Adv. Mr. Subhro Mukherjee, Adv. Mr. Mohit Pandey, Adv. Ms. Raka Chatterjee, Adv. Ms. Venkata Supreeth, Adv. Mr. Arunava Mukherjee, AOR Mr. Abhishek Kumar Rao, Adv. Mr. Shailesh Suman, AOR Mr. Shekhar Naphade, Sr. Adv. Mr. Aniruddha Joshi, Sr. Adv. Mr. Shashibhushan P. Adgaonkar, AOR Ms. Salonee Paranjape, Adv. Mrs. Pradnya S. Adgaonkar, Adv. Mr. Kiran Bishnoi, Adv. Mr. A.S. Jamuna, Adv. Mr. Anoop Raj, Adv. Mr. Prashanto Chandra Sen, Sr. Adv. Mr. Sudiep Shrivastava, Adv. Mr. Pranav Sachdeva, AOR Ms. Rashi Goswami, Adv. Mr. Jatin Bhardwaj, Adv. Mr. Tanmay Yadav, Adv. Ms. Sirithi Sreekumar, Adv. Mr. Pallav Mongia, AOR Mr. Shashank Dwivedi, Adv. Mr. Anubhav Mishra, Adv. Ms. Sunanda Chowdhury, Adv. Mr. Saket Sikri, Adv. Mr. Naman Joshi, Adv. Ms. Ritika Vohra, Adv. Mr. Ajay P. Singh, Adv. Ms. Charu Ambwani, Adv. Mr. Guneet Sidhu, Adv. Mr. Priyal Goyal, Adv. Mr. Rahul, Adv. Ms. Amber Tickoo, Adv. Mr. Shivam Gera, Adv. Mr. Akashdeep Singh, Adv. Mr. Verdaan Jain, Adv. Ms. Manisha Ambwani, AOR Ms. Sukanya Lal, AOR Mr. Saurav Agrawal, Adv. Ms. Sonali Jaitley Bakhshi, Adv. Mr. Jaiyesh Bakhshi, Adv. Mr. Ravi Tyagi, AOR Mr. Mayank Mishra, Adv. Ms. Manmilan Sidhu, Adv. Mr. Manish Bhatt, Adv. Mr. Atharva Koppal, Adv. Ms. Neetu Devrani, Adv. Mr. Abhijay Basu, Adv. Mr. Babit Jamwal, Adv. Ms. Prachi Dubey, Adv. Mr. Anshuman Chowdhury, Adv. Mr. Ajay Sharma, Adv. Ms. Mahek Upadhaya, Adv. Mr. Arya Bhatt, Adv. Ms. Soloni Paliwal, Adv. Mr. Harsh Khabar, Adv. Mr. Sarthak Nayak, Adv. Ms. Anushruti, Adv. Mr. Darius J. Khambata, Sr. Adv. Mr. Aditya Mehta, Adv. Mr. C. Rashmikant, Adv. Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Ms. S. Lakshmi Iyer, Adv. Mr. Rohan Dakshini, Adv. Ms. Namrata Shah, Adv. Ms. Suprriya Lopes, Adv. Ms. Sailee Dhayalkar, Adv. Mr. Shashwat Singh, Adv. Mr. Jai Sanyal, Adv. Ms. Vidhi Shah, Adv. Mr. E.C. Agrawala, AOR Mr. Gaurav Pachnanda, Sr. Adv. Ms. Garima Bajaj, AOR Mr. Mohit Goel, Adv. Mr. Sidharth Goel, Adv. Mr. Raghavendra Mohan Bajaj, Adv. Ms. Karmanya Dev Sharma, Adv. Ms. Aishna Jain, Adv. Mr. Shashwat Mukherjee, Adv. Mr. Ishaan Pratap Singh, Adv. Ms. Nikita Jaitly, Adv. Mr. Siddharth Kapoor, Adv. Ms. Shreya Bansal, Adv. Mr. Sumeet Pushkarna, Sr. Adv. Mr. Nikhilesh Krishnan, Adv. Mr. Gaurav Varma, AOR Mr. Varun Chugh, Adv. Mr. Sudeep Vijayan, Adv. Mr. Abhishek Bhushan Singh, Adv. Mr. Swapnil Joshi, Adv. Ms. Aishwarya Mishra, Adv. Dr. Amit George, Adv. Mr. Dhiraj Abraham Philip, AOR Mr. Febin Mathew Varghese, Adv. Ms. Chand Chopra, Adv. Ms. Namrata Mohapatra, Adv. Ms. Achalika Ahuja, Adv. Mr. Arkaneil Bhaumik, Adv. Mr. Adhishwar Suri, Adv. Ms. Suparna Jain, Adv. Ms. Ibansara Syiemlieh, Adv. Mr. Dushyant Kishna Kaul, Adv. Ms. Rupam Jha, Adv. Ms. Medhavi Bhatia, Adv. Mr. Maniesh Gandhi, Adv. Mr. Naveen Richard, Adv.
For the Petitioner(s): Mr. Debmalya Banerjee, Adv. Mr. Rohan Sharma, Adv. Mr. Vikas Gogne, Adv. Mr. Satyam Chaturvedi, Adv. Mr. Agastya Shelat, Adv. Ms. Tanvi Seth, Adv. M/s. Karanjawala & Co., AOR Mr. Tushar Mehta, SG Mr. Sudarshan Lamba, AOR Mr. Kanu Agarwal, Adv. Mr. Ashwin Shanker, Adv. Mr. Sanjay Grover, Adv. Ms. Ridhi Nyati, Adv. Ms. Vanshika Jain, Adv. Mr. Shivlal Singh, Adv. Mr. K.V. Mohan, AOR Mr. Vaibhav Dang, Adv. Mr. Amrendra Kumar Mehta, AOR Ms. Anita Mahapatra, Adv. Ms. Gunjan Kumari, Adv. Mr. Jinendra Jain, AOR Mr. Ajay Jain, Adv. Mr. Krishna Sharma, Adv. Ms. Bijay Lakshmi, Adv. Mr. M.N. Mishra, Adv. Mr. Manoj Gautam, Adv. Mr. Kunaal Sharma, Adv. Mr. Akul Chalia, Adv. Mr. Harshit Batra, Adv. Mr. Mitika Choudhary, Adv. Ms. Shreya Jain, Adv. Mr. Akshat Jain, Adv. Mr. R.C. Bansal, Adv. Mr. T. Harish Kumar, AOR Mr. Bharathi Subramanian, Adv. Mr. Shubham P. Chopra, Adv. Mr. Arvind Datar, Sr. Adv. Mr. Nishanth Patil, AOR Mr. M.V. Mukunda, Adv. Mr. Mithun Shashank, Adv. Mr. M.V. Swaroop, Adv. Ms. Payal Chawla, Adv. Ms. Hina Shaheen, Adv. Mr. Arijit Dey, Adv. Mr. Manish K. Bishnoi, AOR Mr. Khubaib Shakeel, Adv.
For the Respondent(s): Mr. Saurabh Kirpal, Sr. Adv. Ms. Manmeet Kaur, Adv. Mr. Debmalya Banerjee, Adv. Mr. Rohan Sharma, Adv. Mr. Gurtej Pal Singh, Adv. Mr. Rohan Anand, Adv. Mr. Jai Dogra, Adv. Ms. Liza Vohra, Adv. Mr. Dhruv, Adv. M/s. Karanjawala & Co., AOR Mr. Naresh Markanda, Sr. Adv. Mr. Rohan Markanda, Adv. Mrs. Harsheen Madan Palli, Adv. Mr. Chritarth Palli, AOR Mr. Ritin Rai, Sr. Adv. Mr. Benny P. Thomas, Sr. Adv. Mr. Abel Tom Benny, Adv. Mr. Abhishek Kshetarpal, Adv. Ms. Ritika Sinha, Adv. Ms. Ankita Gupta, Adv. Mr. Dhiliban Varadarajan, Adv. Mr. Debasis Jena, Adv. Mr. Prakash Ranjan Nayak, AOR Mr. Tushar Mehta, S.G. Mr. Surjendu Sankar Das, AOR Ms. Annie Mittal, Adv. Mr. Tushar Mehta, S.G. Mr. Nikilesh Ramachandran, AOR Mr. Lovekesh Aggarwal, Adv. Ms. Neelam Rathore, Adv. Mr. Shubham Seth, Adv. Ms. Prakruti Malhotra, Adv. Mr. Abhinav Sharma, Adv. Mr. Alok Tripathi, AOR Mr. Vikramjit Banerjee, ASG Mr. Sudarshan Lamba, AOR Mr. Rahul G. Tanwani, Adv. Mr. Anantha Narayana M.G., AOR Mr. Shubhendu Anand, Adv. Mr. Tadimalla Bhaskar Gowtham, Adv. Mr. Ayush Anand, Adv. Mr. Sudipto Sircar, Adv. Mr. Aditya Shekhar, Adv. Mr. Rishi Ashok, Adv. Mr. P.D.V. Srikar, Adv. Mr. Aman Shukla, Adv. Mr. Alabhya Dhamija, Adv. Mr. Aditya Kashyap, Adv. Mr. Neeleshwar Pavani, Adv. Mr. M. Chandrakanth Reddy, Adv. Mr. Suvigya Awasthy, Adv. Mr. Sameer Jain, Adv. Mr. Vivek Joshi, Adv. Mr. Rohan Gulati, Adv. Mr. Deepesh Raj, Adv. Mr. Soayib Qureshi, AOR Mr. Tushar Mehta, S.G. Mr. Ankur Mittal, Adv. Mr. Abhay Gupta, Adv. Ms. Nidhi Mittal, Adv. Mr. U.C. Mittal, Adv. Ms. Ikshita Parihar, Adv. Mr. Sanjivan Chakraborty, Adv. Mr. Rakshit Ranjan, Adv. Mr. Ankur Saboo, Adv. Mr. Aviraj Pandey, Adv. Mr. Kaustubh Prakash, AOR Ms. Hita Sharma, Adv. Ms. Tanya Singh, Adv. Mr. Gourab Banerji, Sr. Adv. Mr. George Pothan Poothicote, Adv. Ms. Manisha Singh, Adv. Ms. Jyoti Singh, Adv. Mr. Prakarsh Kumar, Adv. Mr. Rakesh Talukdar, Adv. Mr. T.S. Sundaram, Adv. Mr. Subhro Mukherjee, Adv. Mr. Mohit Pandey, Adv. Ms. Raka Chatterjee, Adv. Ms. Venkata Supreeth, Adv. Mr. Arunava Mukherjee, AOR Mr. Abhishek Kumar Rao, Adv. Mr. Shailesh Suman, AOR Mr. Shekhar Naphade, Sr. Adv. Mr. Aniruddha Joshi, Sr. Adv. Mr. Shashibhushan P. Adgaonkar, AOR Ms. Salonee Paranjape, Adv. Mrs. Pradnya S. Adgaonkar, Adv. Mr. Kiran Bishnoi, Adv. Mr. A.S. Jamuna, Adv. Mr. Anoop Raj, Adv. Mr. Prashanto Chandra Sen, Sr. Adv. Mr. Sudiep Shrivastava, Adv. Mr. Pranav Sachdeva, AOR Ms. Rashi Goswami, Adv. Mr. Jatin Bhardwaj, Adv. Mr. Tanmay Yadav, Adv. Ms. Sirithi Sreekumar, Adv. Mr. Pallav Mongia, AOR Mr. Shashank Dwivedi, Adv. Mr. Anubhav Mishra, Adv. Ms. Sunanda Chowdhury, Adv. Mr. Saket Sikri, Adv. Mr. Naman Joshi, Adv. Ms. Ritika Vohra, Adv. Mr. Ajay P. Singh, Adv. Ms. Charu Ambwani, Adv. Mr. Guneet Sidhu, Adv. Mr. Priyal Goyal, Adv. Mr. Rahul, Adv. Ms. Amber Tickoo, Adv. Mr. Shivam Gera, Adv. Mr. Akashdeep Singh, Adv. Mr. Verdaan Jain, Adv. Ms. Manisha Ambwani, AOR Ms. Sukanya Lal, AOR Mr. Saurav Agrawal, Adv. Ms. Sonali Jaitley Bakhshi, Adv. Mr. Jaiyesh Bakhshi, Adv. Mr. Ravi Tyagi, AOR Mr. Mayank Mishra, Adv. Ms. Manmilan Sidhu, Adv. Mr. Manish Bhatt, Adv. Mr. Atharva Koppal, Adv. Ms. Neetu Devrani, Adv. Mr. Abhijay Basu, Adv. Mr. Babit Jamwal, Adv. Ms. Prachi Dubey, Adv. Mr. Anshuman Chowdhury, Adv. Mr. Ajay Sharma, Adv. Ms. Mahek Upadhaya, Adv. Mr. Arya Bhatt, Adv. Ms. Soloni Paliwal, Adv. Mr. Harsh Khabar, Adv. Mr. Sarthak Nayak, Adv. Ms. Anushruti, Adv. Mr. Darius J. Khambata, Sr. Adv. Mr. Aditya Mehta, Adv. Mr. C. Rashmikant, Adv. Mr. Mahesh Agarwal, Adv. Mr. Ankur Saigal, Adv. Ms. S. Lakshmi Iyer, Adv. Mr. Rohan Dakshini, Adv. Ms. Namrata Shah, Adv. Ms. Suprriya Lopes, Adv. Ms. Sailee Dhayalkar, Adv. Mr. Shashwat Singh, Adv. Mr. Jai Sanyal, Adv. Ms. Vidhi Shah, Adv. Mr. E.C. Agrawala, AOR Mr. Gaurav Pachnanda, Sr. Adv. Ms. Garima Bajaj, AOR Mr. Mohit Goel, Adv. Mr. Sidharth Goel, Adv. Mr. Raghavendra Mohan Bajaj, Adv. Ms. Karmanya Dev Sharma, Adv. Ms. Aishna Jain, Adv. Mr. Shashwat Mukherjee, Adv. Mr. Ishaan Pratap Singh, Adv. Ms. Nikita Jaitly, Adv. Mr. Siddharth Kapoor, Adv. Ms. Shreya Bansal, Adv. Mr. Sumeet Pushkarna, Sr. Adv. Mr. Nikhilesh Krishnan, Adv. Mr. Gaurav Varma, AOR Mr. Varun Chugh, Adv. Mr. Sudeep Vijayan, Adv. Mr. Abhishek Bhushan Singh, Adv. Mr. Swapnil Joshi, Adv. Ms. Aishwarya Mishra, Adv. Dr. Amit George, Adv. Mr. Dhiraj Abraham Philip, AOR Mr. Febin Mathew Varghese, Adv. Ms. Chand Chopra, Adv. Ms. Namrata Mohapatra, Adv. Ms. Achalika Ahuja, Adv. Mr. Arkaneil Bhaumik, Adv. Mr. Adhishwar Suri, Adv. Ms. Suparna Jain, Adv. Ms. Ibansara Syiemlieh, Adv. Mr. Dushyant Kishna Kaul, Adv. Ms. Rupam Jha, Adv. Ms. Medhavi Bhatia, Adv. Mr. Maniesh Gandhi, Adv. Mr. Naveen Richard, Adv.
Table of Contents
2. Whether the power to set aside includes the power to modify as a lesser power, or if modification requires express legislative sanction. (Para 17 , 18 , 20 , 21 , 22 )
3. Modification involves merits review, contradicting the minimal judicial intervention mandate of the 1996 Act and the UNCITRAL Model Law. (Para 38 , 41 , 42 , 89 , 90 , 91 )
4. Section 34 empowers courts to set aside or partially sever awards, but not to modify them, except for correcting clerical or computational errors. (Para 157 )
5. Held that courts under Sections 34 and 37 cannot modify arbitral awards, except for severing separable parts and correcting clerical or computational errors. (Para 157 )
6. Do courts have the power to modify an arbitral award under Section 34 of the 1996 Act?
No. The power to set aside is qualitatively different from the power to modify. Modification would amount to a merits review, which is prohibited under the minimal judicial intervention framework of the Act. (Para 38 , 89 , 91 , 157 )
7. Can a court partially set aside an arbitral award?
Yes, if the decisions on matters submitted to arbitration can be separated from those not submitted, or if standalone claims are not inseparably intertwined with other parts of the award. (Para 32 , 34 , 146 , 153 )
8. Can a court correct typographical or computational errors in an award under Section 34?
Yes. Based on the principle of actus curiae neminem gravabit, courts can correct clerical, computational, or typographical errors without modifying the original award's substance. (Para 140 , 141 , 157 )
9. What is the purpose of Section 34(4) and can it be exercised suo motu?
It allows courts to adjourn proceedings to give the tribunal an opportunity to eliminate grounds for setting aside. The court may exercise this power suo motu if appropriate. (Para 130 , 136 )
10. Can the Supreme Court use Article 142 to modify an arbitral award?
No. Article 142 cannot be used to supplant substantive statutory provisions or achieve indirectly what cannot be achieved directly under the 1996 Act. (Para 109 , 113 , 115 )
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, 11[Hereinafter referred to as, “1996 Act”.] does not expressly empower courts to modify or vary an arbitral award. Section 34 of the 1996 Act only confers upon courts the power to set aside an award. Nevertheless, this Court, on several instances, has been compelled to modify arbitral awards, seeking to minimize protracted litigation and foster the ends of justice. In contrast, some judgments have posited that Indian courts cannot modify awards, due to the narrowly defined scope of Section 34 . Therefore, divergent and contrasting judicial opinions exist on this question.
4. Annexure A to this judgment reproduces Section 34, and other pertinent provisions of the 1996 Act – namely Sections 5, 31, 33, 37, 43 and 48. Annexure B provides a compilation of prevailing stances adopted by foreign jurisdictions vis-à-vis the question of modification.
5. Before addressing the arguments raised, it would be useful to capture the divergence of judicial opinions on the question of modification. These conflicting judgments provide context to the legal controversy and the arguments presented.
A. JUDICIAL DIVERGENCE ON MODIFICATION POWERS
6. In McDermott International Inc. v. Burn Standard Co. Ltd. and Others , (2006) 11 SCC 181 this Court explained the difference between judicial interference permitted by the 1996 Act vis-à-vis the Arbitration and Conciliation Act, 194013[Hereinafter referred to as, “1940 Act”.]. The 1996 Act limits the supervisory role of the court to specific grounds under Section 34 , while the 1940 Act gave courts broader powers under Sections 30 and 33. The Court clarified that under Section 34 , the court does not act as an appellate authority for factual findings, evidence, or ques
