Supreme Court Constitution Bench To Deliver Judgment Tomorrow On Courts' Powers To Modify Arbitral Awards Under S.34/37 Arbitration Act
A Constitution Bench of the Supreme Court will deliver judgment tomorrow on the question whether Courts can modify arbitral awards while exercising appellate powers under Sections 34 and 37 of the Arbitration and Concilaition Act, 1996.A bench comprising Chief Justice of India Sanjiv Khanna, Justices BR Gavai,Sanjay Kumar, AG Masih and KV Viswanathan had reserved the judgment on the matter...
A Constitution Bench of the Supreme Court will deliver judgment tomorrow on the question whether Courts can modify arbitral awards while exercising appellate powers under Sections 34 and 37 of the Arbitration and Concilaition Act, 1996.
A bench comprising Chief Justice of India Sanjiv Khanna, Justices BR Gavai,Sanjay Kumar, AG Masih and KV Viswanathan had reserved the judgment on the matter on February 19 after a 3-day hearing.
In February 2024, a bench of Justices Dipankar Dutta, K.V. Viswanathan, and Sandeep Mehta referred to the larger bench the question of whether the courts have the power to modify the arbitral award under Sections 34 or 37 of the Arbitration and Conciliation Act, 1996.
The bench led by Justice Datta also noted that while one line of decisions of this Court has answered the aforesaid question in the negative, there are decisions which have either modified the awards of the arbitral tribunals or upheld orders under challenge modifying the awards. The 5 main questions that the other bench had framed were :
“1. Whether the powers of the Court under Section 34 and 37 of the Arbitration and Conciliation Act, 1996, will include the power to modify an arbitral award?
2. If the power to modify the award is available, whether such power can be exercised only where the award is severable and a part thereof can be modified?
3. Whether the power to set aside an award under section 34 of the Act, being a larger power, will include the power to modify an arbitral award and if so, to what extent?
4. Whether the power to modify an award can be read into the power to set aside an award under section 34 of the Act?
5. Whether the judgment of this Court in Project Director NHAI vs. M. Hakeem, followed in Larsen Air Conditioning and Refrigeration Company vs. Union of India and SV Samudram vs. State of Karnataka lay down the correct law, as other benches of two Judges (in Vedanta Limited vs. Shenzden Shandong Nuclear Power Construction Company Limited, Oriental Structural Engineers Pvt. Ltd. vs. State of Kerala and M.P. Power Generation Co. Ltd. vs. Ansaldo Energia Spa) and three Judges (in J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd., Tata Hydroelectric Power Supply Co. Ltd. vs. Union of India and Shakti Nath vs. Alpha Tiger Cyprus Investment No.3 Ltd.) of this Court have either modified or accepted the modification of the arbitral awards under consideration?”
In M. Hakeem, Larsen Air Conditioning, and SV Samudram, the Apex Court has held that the courts are not empowered to modify the arbitral award under Sections 34 or 37 of the Arbitration Act whereas in other aforementioned cases, the Supreme Court had modified or accepted the modified arbitral award.
Case Details : GAYATRI BALASAMY Versus M/S ISG NOVASOFT TECHNOLOGIES LIMITED| SLP(C) No. 15336-15337/2021
Appearance Of The Parties -
Petitioners : Mr. Arvind Datar, Sr. Advocate along with Nishanth Patil, Advocate appeared for the Petitioner in the lead matter i.e. Gayatri Balawamy v. ISG Novasoft (SLP (C) No. 15336-15337 of 2021)
Respondents : Mr. Saurabh Kirpal, Sr. Advocate along with Ms. Manmeet Kaur, Partner, Mr. Debmalya Banerjee, Partner, Rohan Sharma, Principal Associate, Gurtejpal Singh, Senior Associate, Jai Dogra, Liza Vohra, appeared on behalf of the Respondent in the lead matter i.e. Gayatri Balawamy v. ISG Novasoft (SLP (C) No. 15336-15337 of 2021).
Mr. Tushar Mehta, Solicitor General of India, Archana Pathak Dave, ASG along with Nikilesh Ramachandran, Aastha Singh, Kaustubh Prakash and Surjendu Sankar Das, Advocates, appeared on behalf of Union of India.
Intervenors : Mr. Gourab Banerji, Sr. Advocate appeared along with Arunava Mukharjee, Advocate on behalf of UNCITRAL; Mr. Shekhar Naphade, Sr. Advocate appeared along with Shashibhushan P. Adgaonkar, Advocate on record; Mr. Prashanto Chandra Sen, Sr. Advocate; Mr. Sumeet Pushkarna, Sr. Advocate appeared along with Mr. Gaurav Varma on behalf of Telecommunications Consultants India Ltd; Ritin Rai, Sr. Adv, Sr. Advocate appeared along with Prakash Ranjan Nayak, Advocate; Darius Khambata, Sr. Advocate appeared along with E.C. Agarwala, Advocate.