A five-judge Constitution Bench of the Supreme Court of India has delivered a landmark judgment in Gayatri Balasamy vs M/s ISG Novasoft Technologies Limited, resolving the long-standing question of whether courts can modify arbitral awards.

In a 4:1 majority decision, the Supreme Court recognised that courts have an implied power to modify an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996. However, the Court clarified that this power is limited and can only be exercised in specific circumstances — namely:

• When the award is severable;
• To correct clerical, typographical, or 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 must be invoked cautiously.

This ruling marks a significant development in India’s arbitration law framework.

Read the full article, Supreme Court on Modification of Arbitral Awards: A Landmark Ruling with Loose Ends, authored by our Partner Abhinav Sharma, Senior Associate Ayush Srivastava, and Associate Mayank Bansal, on Chambers and Partners here.