Courts Power Under Section 34 Of The Arbitration And Conciliation Act, 1996

Through this article, we aim to discuss the power of the courts in India to modify the arbitral awards and the recent pronouncement of the Apex Court clarifying the position.

Conflicting Dictum

In Oil & Natural Gas Corporation Ltd. v. Western Geco International Ltd. ¹, it was held that when an arbitral tribunal draws an erroneous inference on facts, the award can be "cast away or modified". Similarly, in Gayatri Balaswamy v. ISG Novasoft Technologies Ltd. ², the Madras High Court held that the courts have an inherent power under Section 34 to modify the arbitral award. The classic example of modification of an award was the matter of Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd.³ wherein the Madras High Court  set aside the tribunal's award relating to one of their claims. The Supreme Court in appeal, modified the award on the ground of it being unintelligible and thus, unsustainable. Likewise, in Oriental Structural Engineers Pvt. Ltd. v. State of Kerala