Supreme Court On Modification Of Arbitral Awards: A Landmark Ruling With Loose Ends

A five-judge Constitution Bench of the Supreme Court of India issued a landmark ruling in the case of Gayatri Balasamy vs M/s ISG Novasoft Technologies Limited¹, resolving a long-debated issue as to whether courts can modify arbitral awards. In a 4:1 majority, the Apex Court recognized an implied power to modify an arbitral award under Section 34 of the Arbitration & Conciliation Act ("Arbitration Act"). However, it clarified that this power of modification is limited and can be exercised in specific situations: when the award is severable, to fix clerical, typographical, or any other manifest errors, to adjust post-award interest in certain cases, and by the Supreme Court while exercising its special powers under Article 142 of the Constitution which has to be used cautiously. This decision marks a pivotal development in India's arbitration law framework.