Do Courts Have The Power To Modify Arbitral Awards?

On February 20, 2025, the Supreme Court of India ("Supreme Court") reserved its judgement on whether the powers of a court under Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996 ("Act") extend to the modification of arbitral awards. The Supreme Court, while analysing precedents relating to these Sections, observed that some judgements have emphasized the lack of the courts' powers to modify an arbitral award, and others have permitted modifications to the arbitral awards. This Article analyses the dual lines of reasoning followed in prior judgements and delves into the implications of receiving a definitive answer from the Supreme Court.

Section 34 of the Act provides for the setting aside of an arbitral award on the grounds of, inter alia: (i) the underlying arbitration agreement being invalid; (ii) the subject matter of the dispute being outside the scope of the matters that may be settled through arbitration under the Indian laws; and