Courts Can Correct Manifest Computational Errors In Awards Without Re-Appraising Arbitrator's Reasoning: Delhi High Court

The Delhi High Court held that the courts under sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) possess limited but definite authority to correct manifest computation errors without reopening the merits of the case. A Division Bench comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar partly modified the arbitral award to the extent of adjusting overpayment made by the homeowners to the contractor. The court observed that error was self-evident on the face of the record and did not entail re-appreciation of evidence, thereby falling squarely within the correctable computational category recognised by the Supreme Court in Gayatri Balasamy. The dispute arose out of a construction agreement signed in 2010 for renovation and construction of a residential building situated at Greater Kailash Enclave, New Delhi. The contractor raised claims alleging non-payment for works executed. The Homeowners disputed the quality and completeness construction and raised several counter claims for various defects and incomplete tasks. The Arbitral Tribunal passed an award in favor of the contractor awarding ₹7,88,965, along with 10% interest and ₹1,50,000 as arbitration costs. Two marginal counter claims of the homeowners were also allowed. The homeowners challenged the award under section 34 which was dismissed prompting them to file an appeal under section 37. The court at the outset observed that the role of the court under section 37 is supervisory and it cannot re-visit factual findings or re-evaluate evidence. However, it ruled that after the Supreme Court's judgment in Gayatri Balasamy, the court is empowered to modify awards by severing invalid portions, correct clerical, arithmetical or computational errors, modify post award interest and exercise powers like Article 142 to prevent injustice. “Courts do possess a limited power to modify an arbitral award under Sections 34 and 37 of the A&C Act. This limited power is permissible in specific, narrowly defined circumstances. Primarily, this includes cases where the invalid portion of the arbitral award is clearly severable from the valid part. The court may correct computational, clerical, typographical, or other manifest errors apparent on the face of the record”, the court held while relying on the Supreme Court's judgment in Gayatri Balasamy. It further observed that the modification is permissible only when it does not entail re-appraisal of the arbitrator's reasoning. The court noted that the arbitrator had recorded categorically two numerical findings: the contractor received ₹68,00,000 as admitted by him in his final bill and legal notice whereas the value of work executed was ₹65,44,049 based on the documents produced by the contractor itself. Despite this, the court observed that the arbitrator proceeded to award an additional amount without adjusting the extra amount already paid. “This inconsistency arises not from any interpretative exercise or re-appreciation of evidence but from a manifest error, with regard to the computation of the resulting liability, that is self-evident upon comparing the numerical findings recorded in the Award. Such a computational discrepancy, being objectively demonstrable from the Award itself, constitutes an error apparent on the face of the record. ", the court stated. The court further held that the computational errors being objectively demonstrable can be corrected. It observed that “Such an error is not dependent on pleadings but on the face of record. Correction of an arithmetic inconsistency is well within the Court's limited powers under Sections 34 and 37.” Accordingly, the court partly modified the award holding that the computational errors can be corrected by the courts under sections 34 and 37 if they do not entail re-appreciation of evidence. Case Title: JAGDISH KAUR versus JASBIR SINGH SANDHU & ORS.Citation: 2025 LiveLaw (Del) 1622 Case Number: FAO (COMM) 205/2024 and CM APPL. 60557/2024 Judgment Date: 26.11.2025 For Appellant: Ms. Aastha Dhawan, Adv. For Respondents: Mr. Bipin Kumar Prabhat and Mr. Kislaya Prabhat, Advs. Click Here To Read/Download Order

Courts Can Correct Manifest Computational Errors In Awards Without Re-Appraising Arbitrator's Reasoning: Delhi High Court

Mohd Malik Chauhan

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Courts Can Correct Manifest Computational Errors In Awards Without Re-Appraising Arbitrator's Reasoning: Delhi High Court

Mohd Malik Chauhan

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