Modification Of Arbitral Awards: A Practitioner's Perspective

This article has been published by Supreme Court Observer at: Modification of arbitral awards: a practitioner's perspective – Supreme Court Observer

The recent Constitution Bench decision reaffirms speed and economy but it has a flipside that could threaten the finality principle.

On 30 April, a five-judge Constitution Bench delivered a landmark judgement in Gayatri Balasamy v ISG Novasoft Technologies. In a 4:1 majority, the Bench upheld a court's power to modify an arbitral award under Sections 34 and 37 of the Arbitration Act, 1996.

The law now settled

The majority Judgement authored by Chief Justice Sanjiv Khanna held that Section 34 of the Act, which empowers courts to set aside an award, also confers the power to modify an award in "limited" circumstances. It found that the power of a court to set aside an award also includes the power to partially set it aside. It cautioned that this power cannot be exercised if the valid and invalid portions of the