Arbitration Monthly Digest: May 2025

Supreme Court When Can Court Remand Arbitral Award To Tribunal Under S.34/37 Arbitration Act ? Supreme Court Explains Case Details : GAYATRI BALASAMY Versus M/S ISG NOVASOFT TECHNOLOGIES LIMITED| SLP(C) No. 15336-15337/2021 Citation : 2025 LiveLaw (SC) 508 The Supreme Court Constitution Bench recently held that the powers of Courts to remand arbitral awards back to the Tribunal under S. 34(4) of the Arbitration and Conciliation Act 1996 cannot be seen as a straight-jacket formula.The Court observed that an award should be remitted back only if there is a possibility to correct a defect in the award, but if the entire award suffers from substantial injustice and patent illegality, remittance should be avoided. The Constitution Bench (by 4:1) held that Appellate Courts have limited powers to modify arbitral awards while exercising powers under either Section 34 or 37 of the Arbitration and Conciliation Act, 1996. The bench led by CJI Sanjiv Khanna, comprising Justices BR Gavai,Sanjay Kumar, AG Masih and KV Viswanathan delivered the verdict. The Court held that the power of remand under S. 34(4) of the Act is of restrictive nature for the Courts. While the remand give flexibility to the tribunals to make amends in the award. Supreme Court Criticises Arbitration Bill 2024 For Not Recognising Power To Implead Non-Signatories, Urges Union To Make Changes Case Title: ASF BUILDTECH PRIVATE LIMITED VERSUS SHAPOORJI PALLONJI AND COMPANY PRIVATE LIMITED Citation : 2025 LiveLaw (SC) 521 The Supreme Court today (May 2) expressed its dissatisfaction with the continued absence of explicit statutory recognition for the power of arbitral tribunals to implead or join non-signatory parties. The Court noted with concern that, despite earlier omissions in the Arbitration and Conciliation Act, 1996, the newly proposed Arbitration and Conciliation Bill, 2024, which seeks to overhaul the legislation, also failed to address this critical issue. “We urge, the Department of Legal Affairs, Ministry of Law and Justice to take a serious look at the arbitration regime that is prevailing in India and bring about necessary changes while the Arbitration and Conciliation Bill, 2024 is still being considered.”, the court added. The bench comprising Justices J.B. Pardiwala and R. Mahadevan was hearing the case, which involved a question of whether the Appellant-ASF Buildtech Pvt. Ltd. (ABPL), a non-signatory to the arbitration agreement, could be joined to the arbitral proceedings initiated by the Respondent-Shapoorji Pallonji & Co. Pvt. Ltd. (SPCPL) based on the “Group of Companies” doctrine. If Courts Can Only Set Aside Awards & Can't Modify Them, Parties Will Be Forced To Undergo Fresh Round Of Arbitration : Supreme Court Case Details : GAYATRI BALASAMY Versus M/S ISG NOVASOFT TECHNOLOGIES LIMITED| SLP(C) No. 15336-15337/2021 Citation : 2025 LiveLaw (SC) 508 The Supreme Court recently held that in order to ensure efficient dispute resolution and uphold the objectives of the Arbitration and Conciliation Act 1996, the Court should be allowed to modify awards when parties challenge the tribunal's decision. The majority held that denying modification powers to the Court under S.34 and 37 would be contrary to the main purpose of arbitration, which is efficient dispute resolution. The Court noted that the cycle of litigation post-award takes years, especially in cases challenging the award under S.34 and appeals against the S.34 order. The Court stated : "To deny courts the authority to modify an award—particularly when such a denial would impose significant hardships, escalate costs, and lead to unnecessary delays—would defeat the raison d'être of arbitration. This concern is particularly pronounced in India, where applications under Section 34 and appeals under Section 37 often take years to resolve." Dispute Over Full & Final Settlement Is Arbitrable Despite Parties Discharging Contract : Supreme Court Case Title: ARABIAN EXPORTS PRIVATE LIMITED VERSUS NATIONAL INSURANCE COMPANY LTD. Citation : 2025 LiveLaw (SC) 539 The Supreme Court today (May 6) observed that if the insured alleges coercion in arriving at a settlement with the insurer, then the dispute over the validity of the settlement remains arbitrable. “Any dispute pertaining to the full and final settlement itself by necessary implication being a dispute arising out of or in relation to or under the substantive contract would not be precluded from reference to arbitration as the arbitration agreement contained in the original contract continues to be in existence even after the parties have discharged the original contract by 'accord and satisfaction'.”, the court said. The bench comprising Justices Abhay S Oka and Ujjal Bhuyan was hearing the case where the Appellant-Insured, who was engaged in the meat processing business, had suffered loss due to...

Arbitration Monthly Digest: May 2025

Mohd Talha Hasan

Tags