# Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited

- **Citation:** 2025 INSC 605
- **Court:** Supreme Court of India
- **Decided:** 2025-04-30
- **Bench:** Sanjiv Khanna, B.R. Gavai, Sanjay Kumar, K.V. Viswanathan, Augustine George Masih
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gayatri-balasamy-v-m-s-isg-novasoft-technologies-limited-38386
- **Pages:** 157

## Headnote

In ‡M. Hakeem and Anr.'s case, this Court held that while exercising
powers u/s.34 of the Arbitration and Conciliation Act, 1996, a Court
hearing the petition had no power to "modify" the Award, whereas
other benches of two judges and three judges of this Court have
either modified or accepted modification of the arbitral awards. In
view of the divergent and contrasting judicial opinions as regards
the power of the court u/s.34 to modify an arbitral award, the
matter has been placed before the Constitution Bench to decide
the questions referred.
The questions referred are: whether the powers of the Court
u/ss.34 and 37 of the 1996 Act include the power to modify an
arbitral award; whether such power can be exercised only where
the award is severable, and a part thereof can be modified; whether
the power to set aside an award u/s.34, being a larger power, will
include the power to modify an arbitral award and to what extent;
whether power to modify an award can be read into the power to
set aside an award u/s.34; and whether the judgment of this Court
in ‡M. Hakeem's case lay down the correct law.
Headnotes†
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Power of the court to modify an
award - Limited power of modification, if can be located in s.34:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Court has a
limited power u/ss.34 and 37 to modify the arbitral award - This
limited power may be exercised-when the award is severable, by
severing the "invalid" portion from the "valid" portion of the award; by
* Author
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correcting any clerical, computational or typographical errors which
appear erroneous on the face of the record; by modifying post award
interest in some circumstances; and/or exercise of power u/Art.142
is permitted, albeit, the power must be exercised with great care and
caution and within the limits of the constitutional power. [Para 85]
Held: (per K.V. Viswanathan, J.) (Dissenting) Courts exercising
power u/s.34 and Courts hearing appeals thereunder have no
power to "modify" an award - While modification is not permitted
u/s.34, severance of the award falling foul of s.34 is permissible in
exercise of powers u/s.34 - Power to set aside will not include the
power to modify since power to modify is not a lesser power to that
of the power to set aside - Furthermore, inherent power u/s.151
CPC cannot be used to modify awards as it will be contrary to
the express power mentioned in s.34 - Also there is no scope for
applying the doctrine of implied power to modify awards - Art.142
will not be exercised by this Court to modify awards passed by
arbitrators - Interest awarded also cannot be modified - ‡Hakeem's
case is not per incuriam, it lays down the correct law insofar as
it held that s.34 Court cannot modify the award and will be read
with the only exception made. [Para 156]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Doctrine of merger - New York
Convention Awards - Power of modification u/s.34 - Affect
on International Commercial Arbitration Regime:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Once s.34
is reinterpreted to include a limited power to modify awards, this
authority will not affect the international commercial arbitration
regime or the enforcement of foreign awards - It cannot be said
that court orders partially setting aside or modifying an award
would render the amended award unenforceable under the New
York Convention. [Para 66]
Held: [per K.V. Viswanathan, J. (Dissenting)] In UK, Singapore,
New Zealand and Kenya, not only were there express provisions
to modify awards in those statutes by the Court hearing the setting
aside application, there are also express provisions recognising
that the award w

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[2025] 4 S.C.R. 2080 : 2025 INSC 605
Gayatri Balasamy
v.
M/s ISG Novasoft Technologies Limited
(Civil Appeal No(s). 6178-6179 of 2025)
30 April 2025
[Sanjiv Khanna,* CJI, B.R. Gavai, Sanjay Kumar,
K.V. Viswanathan* and Augustine George Masih, JJ.]
Issue for Consideration
In ‡M. Hakeem and Anr.'s case, this Court held that while exercising
powers u/s.34 of the Arbitration and Conciliation Act, 1996, a Court
hearing the petition had no power to "modify" the Award, whereas
other benches of two judges and three judges of this Court have
either modified or accepted modification of the arbitral awards. In
view of the divergent and contrasting judicial opinions as regards
the power of the court u/s.34 to modify an arbitral award, the
matter has been placed before the Constitution Bench to decide
the questions referred.
The questions referred are: whether the powers of the Court
u/ss.34 and 37 of the 1996 Act include the power to modify an
arbitral award; whether such power can be exercised only where
the award is severable, and a part thereof can be modified; whether
the power to set aside an award u/s.34, being a larger power, will
include the power to modify an arbitral award and to what extent;
whether power to modify an award can be read into the power to
set aside an award u/s.34; and whether the judgment of this Court
in ‡M. Hakeem's case lay down the correct law.
Headnotes†
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Power of the court to modify an
award - Limited power of modification, if can be located in s.34:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Court has a
limited power u/ss.34 and 37 to modify the arbitral award - This
limited power may be exercised-when the award is severable, by
severing the "invalid" portion from the "valid" portion of the award; by
* Author
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correcting any clerical, computational or typographical errors which
appear erroneous on the face of the record; by modifying post award
interest in some circumstances; and/or exercise of power u/Art.142
is permitted, albeit, the power must be exercised with great care and
caution and within the limits of the constitutional power. [Para 85]
Held: (per K.V. Viswanathan, J.) (Dissenting) Courts exercising
power u/s.34 and Courts hearing appeals thereunder have no
power to "modify" an award - While modification is not permitted
u/s.34, severance of the award falling foul of s.34 is permissible in
exercise of powers u/s.34 - Power to set aside will not include the
power to modify since power to modify is not a lesser power to that
of the power to set aside - Furthermore, inherent power u/s.151
CPC cannot be used to modify awards as it will be contrary to
the express power mentioned in s.34 - Also there is no scope for
applying the doctrine of implied power to modify awards - Art.142
will not be exercised by this Court to modify awards passed by
arbitrators - Interest awarded also cannot be modified - ‡Hakeem's
case is not per incuriam, it lays down the correct law insofar as
it held that s.34 Court cannot modify the award and will be read
with the only exception made. [Para 156]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Doctrine of merger - New York
Convention Awards - Power of modification u/s.34 - Affect
on International Commercial Arbitration Regime:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Once s.34
is reinterpreted to include a limited power to modify awards, this
authority will not affect the international commercial arbitration
regime or the enforcement of foreign awards - It cannot be said
that court orders partially setting aside or modifying an award
would render the amended award unenforceable under the New
York Convention. [Para 66]
Held: [per K.V. Viswanathan, J. (Dissenting)] In UK, Singapore,
New Zealand and Kenya, not only were there express provisions
to modify awards in those statutes by the Court hearing the setting
aside application, there are also express provisions recognising
that the award would hitherto be read in the modified form - In the
absence of similar statutory regime serious complications will arise
in enforcement of New York Convention awards and will constitute
a serious threat to India seated arbitrations under the New York
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Conventions - If the award is modified by the s.34 Court in India,
any enforcement brought abroad will run into complications as
objections will be taken that what is sought to be enforced is not
the award but the judgment of the Court - Enforcement of foreign
judgements and enforcement of foreign awards are distinct legal
concepts - Furthermore, since there is no power u/s.34 court to
modify, in the absence of a statutory enablement, not necessary
to go into the aspect of the applicability of the doctrine of merger.
[Paras 121, 123, 125]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Post-Award Interest - Power of
the court to declare or modify interest - Use of power u/s.34(4):
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] For the
post award interest in terms of s.31(7)(b), the courts will retain
the power to modify the interest where the facts justify - In the
absence of grant of post award interest in the award, the court
also possesses the power to grant post award interest - U/s.31(7)
(b), the legislature has established a standard rate of interest to
guide the arbitrator's discretion to determine the post-award interest
rate - Unless there are special and specific reasons, the rate of
interest stipulated by the statute is to be applied - Furthermore, it
is appropriate for the s.34 court to have the authority to intervene
and modify the post-award interest if the facts and circumstances
justify - Post-award interest can be scrutinized by courts - Court
has power to both increase or decrease the post-award interest
rate - However, the court, must be cautious and mindful not to
overstep its role by altering the interest rate unless there are
compelling and well-founded reasons to do so. [Paras 74, 76-78]
Held: [per K.V. Viswanathan, J. (Dissenting)] In a given case
where the Court feels that interest has not been awarded or
interest beyond the terms of the agreement have been awarded or
excessive interest have been awarded or abysmally low interest is
awarded, the Court u/s.34 cannot modify the interest - Course of
action to be adopted would be to record reasons in the order and
remit the matter to the arbitrator for the arbitral tribunal to make
the necessary course correction - If thereafter again, when the
matter comes back to the Court, the Court feels that the grounds
for setting aside the award are not eliminated, it will have no choice
except to set aside the award. [Para 135]
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Constitution of India - Art.142 - Supreme Court's power to
do complete justice - Power to modify an arbitral award, if
exercisable u/Art.142:
Held: [per Sanjiv Khanna, CJI. (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Power
u/Art.142 is to be exercised by this Court but with great care
and caution - It enables the court to do complete justice in any
cause or matter pending before it - Exercise of power has to be
in consonance with the fundamental principles and objectives
behind the 1996 Act and not in derogation or in suppression
thereof - Power should not be exercised where the effect of the
order passed by the court would be to rewrite the award or modify
the award on merits - However, the power can be exercised where
it is required and necessary to bring the litigation or dispute to an
end. [Paras 82, 84]
Held: [per K.V. Viswanathan, J. (dissenting)] In matters arising
out of s.34, Supreme Court will refrain from exercising its power
u/Art.142 as the Art. 142 power cannot be used to give a go by
to the substantive statutory provision - Courts exercising powers
u/s.34, which includes the appellate hierarchy cannot change, vary,
or qualify arbitrary awards - Such an exercise of power would
derogate from the core aspects of the A&C Act and would breach a
pre-eminent prohibition in the said Act - If power is reserved for this
Court to modify, at the fag end of the litigation, contracting parties
will have grave uncertainties as they would not be sure of how the
matter will play out when it reaches the apex Court - It would be
antithetical to arbitration as an alternative and efficacious mode of
dispute resolution - Arbitration and Conciliation Act, 1996 - s.34.
[Paras 113-115, 156]
Arbitration and Conciliation Act, 1996 - s.34, proviso to s.34(2)
(a)(iv) - Severability of awards - Power to set aside an award,
if inclusive of the power to partially set it aside:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.] Proviso to
s.34(2)(a)(iv) permits courts to sever the non-arbitrable portions of
an award from arbitrable ones - Power conferred under the proviso
is clarificatory in nature - Authority to sever the "invalid" portion of
an arbitral award from the "valid" portion, while remaining within
the narrow confines of s.34, is inherent in the court's jurisdiction
when setting aside an award - Authority to set aside an arbitral
award necessarily encompasses the power to set it aside in part,
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rather than in its entirety - Partial setting aside may not be feasible
when the "valid" and "invalid" portions are legally and practically
inseparable - "Valid" and "invalid" portions must not be interdependent or intrinsically intertwined - Power of partial setting
aside should be exercised only when the valid and invalid parts
of the award can be clearly segregated without any correlation
between valid and invalid parts. [Paras 33-36]
Held: [per K.V. Viswanathan, J. (Supplementing)] Severance
as a concept is recognised intrinsically in s.34 itself - When there
are several claims adjudicated and if awards on a few claims fall
foul of s.34, such standalone claims falling foul of s.34 can be
set aside as long as they are capable of being severed without
affecting the other parts of the award - If the claims falling foul
of s.34 are not inseparably intertwined with the good portion of
the award, the award can be severed - Power to set aside will
include the power to partially set aside the award and sever the
portions of the award which fall foul of s.34 subject to the riders
engrafted. [Paras 146, 153]
Arbitration and Conciliation Act, 1996 - ss.33, 34 - Application
for setting aside arbitral award - Power of the court to
modify an award - Correction of computational, clerical and
typographical errors, or any other error of similar nature -
Actus curiae neminem gravabit:
Held: [per Sanjiv Khanna, CJI. (for himself and for B.R.
Gavai, Sanjay Kumar and Augustine George Masih, JJ.)]
Notwithstanding s.33, a Court reviewing an award u/s.34
possesses the authority to rectify/modify computational, clerical,
or typographical errors, as well as other manifest errors, provided
that such modification does not necessitate a merits-based
evaluation - There are certain powers inherent to the court, even
when not explicitly granted by the legislature - Scope of these
inherent powers depends on the nature of the provision, whether
it pertains to appellate, reference, or limited jurisdiction as in the
case of s.34 - Powers are intrinsically connected as they are part
and parcel of the jurisdiction exercised by the court - Such power
must not be conflated with the appellate jurisdiction of a higher court
or the power to review a judgment of a lower court. [Paras 49, 54]
Held: [per K.V. Viswanathan, J. (Supplementing)] s.33 enables
parties to move the arbitral tribunal to correct any computational
error, any clerical error or typographical error or any other errors
of similar nature - Ordinarily computational error, clerical or
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typographical error or any other error of a similar nature would
not be objected by other party - However, in the unlikely event of
an objection and in a scenario where the arbitrator has not been
moved u/s.33 or having moved the arbitral tribunal has been
obstinate in not correcting, a Court in s.34 to uphold the maxim
actus curiae neminem gravabit can invoke power and correct
computational errors, clerical or typographical errors or any other
similar errors without modifying, altering or adding to the original
award. [Paras 139, 141]
Arbitration and Conciliation Act, 1996 - ss.34(4) and 37 - Power
u/ss.34(4) and 37 - Suo moto exercise of s.34(4) - Modification
versus remitting:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.] If uncertainty
obscures the exercise of modification powers, the courts must not
modify the award, instead, should avail their remedial power and
remand the award to the tribunal u/s.34(4) for reconsideration of
specific aspects - It cannot be said that remand powers make
modification unnecessary - They are distinct powers and are to
be exercised differently - s.34(4) does not authorize the arbitral
tribunal to rewrite the award on merits or to set it aside - Primary
objective is to preserve the award if the identified defect can be
cured, thereby avoiding the need to set aside the award - If the
award suffers from serious acts of omission, commission, substantial
injustice, or patent illegality, the same may not be remedied through
an order of remand - Additionally, remand may be inappropriate
when it does not serve the interests of the parties, particularly in
time-sensitive matters or where it would lead to undue costs and
inefficiencies - Once an order of remand is granted, the arbitral
tribunal has the authority to vary, correct, review, add to, or modify
the award. [Paras 55, 56, 58, 60, 62]
Held: [per K.V. Viswanathan, J. (Supplementing)] Ordinarily the
stage of s.34(4) would arise when the Court has put the award
through the test of fire under the prior clauses of s.34 and entertains
the opinion that there are grounds for setting aside the arbitral
award - Power to remit u/s.34(4) can be exercised for undoing
the curable defects - s.34(4) is the safety valve provided in the
1996 Act by the legislature to prevent awards being set aside
and to offer a chance to the arbitral tribunal to adopt a course
correction - Court is even Suo Moto empowered to invoke powers
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u/s.34(4) in accordance with the parameters set out - All that s.34
mentions is a request being made and there is no prescription that
the request should be in writing. [Paras 128, 131, 132, 134, 136]
Arbitration and Conciliation Act, 1996 - s.34 - National
Highways Act, 1956 - Modification of arbitral award under
the NHAI Act - Permissibility:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Jurisdiction
conferred u/s.34 does not distinguish between statutory and
non-statutory arbitration in terms of the scope of courts' power of
review - Submission that s.34 should be expansively interpreted
to permit modification of awards under the NHAI Act, particularly
court should be allowed to modify quantum of compensation as
the Act involves statutory arbitration, is untenable in law. [Para 70]
Held: [per K.V. Viswanathan, J. (Supplementing)] Interpretation
of s.34 cannot be bifurcated, and one set of interpretations for
commercial arbitrations and another for statutory arbitrations to
which the A&C Act is applicable, cannot be offerred - Submission
that differential interpretation of the A&C Act for some statutory
arbitrations alone is rejected. [Para 119]
Arbitration and Conciliation Act, 1996 - s.34 - Application
for setting aside arbitral award - Post-award settlement, if
allowed - Abandonment of claims for which awards have
been granted, or compromise arrived at between the parties
contrary to the terms of the award - Effect:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Parties are
entitled to enter into an agreement or settlement even after an
award is pronounced - Law of the land does not bar the parties
from entering into a post award or post decree settlement - Such
settlement must be verifiable and in accordance with law, the
settlement is not a result of undue influence, force, fraud, coercion,
etc. [Para 80]
Held: [per K.V. Viswanathan, J. (Supplementing)] In case
of settlements which are not severable, the option would be
to dismiss the s.34 application as not pressed, in view of the
settlement arrived at - If the compromise has the effect only
of severing a standalone portion of the award with it being not
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inseparably intertwined with any other portion, s.34 Court can
give effect to compromise and sever that portion of the award in
accordance with the principles of severability - Same principle
would apply with regard to abandonment or giving up of claims by
a successful party - However, if the aspects are not severable and
the abandonment/giving up has the effect of impinging upon the
award and is inseparably intertwined, then the option available to
the s.34 Court is to set aside the award. [Paras 154, 155]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Power of recourse to a court
against arbitral award u/s.34 - Scope and ambit - Discussed.
[Paras 27-30]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Permissibility and scope of the
court's modification powers, within the parameters of s.34 -
Difference between setting aside the award and modification
of the award:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Modification
and setting aside of the award have different consequences, the
former alters the award, while the latter annuls it - Recognizing
any modification power will not inevitably lead to an examination
of the merits of the dispute - It completely depends on the extent
of the modification powers recognised. [Para 39]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Limited power of modification
in s.34:
Held: [per Sanjiv Khanna, CJI. (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] 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 -
s.34 limits recourse to courts to an application for setting aside
the award, however, s.34 does not restrict the range of reliefs
that the court can grant, while remaining within the contours of
the statute - Power cannot contradict the essence or language of
s.34 - Modification represents a more limited, nuanced power in
comparison to the annulment of an award, as the latter entails a
more severe consequence of the award being voided in toto - Read
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in this manner limited and restricted power of severing an award
implies a power of the court to vary or modify the award - Silence
in the 1996 Act, should not be read as a complete prohibition -
Thus, u/s.34 court can apply the doctrine of severability and modify
a portion of the award while retaining the rest - Power of judicial
review u/s.34, and the setting aside of an award, should be read
as inherently including a limited power to modify the award within
the confines of s.34. [Paras 41-46]
Arbitration and Conciliation Act, 1996 - ss.34, 43(4) -
Application for setting aside arbitral award - Limitation period -
Calculation of, within which the fresh arbitration or court
proceedings to be commenced:
Held: [per Sanjiv Khanna, CJI (for himself and for B.R. Gavai,
Sanjay Kumar and Augustine George Masih, JJ.)] Once an award
is set aside, it becomes null and void, but the original dispute may
still require resolution - s.43(4), enables the parties to initiate fresh
arbitration or court proceedings in relation to the dispute - s.43(4)
stipulates that the period between the commencement of arbitration
and the Court's order setting aside the award is excluded for the
purposes of calculating the limitation period under the Limitation
Act - Time during which the award is in force is not counted -
s.43(4) provides liberty for the parties to invoke either arbitration
or court proceedings, as applicable, following the annulment of
the award - Limitation Act, 1963. [Para 81]
Arbitration and Conciliation Act, 1996 - s.34 - Application
for setting aside arbitral award under - If words "and, to the
extent" and the words "or modified", and "to the extent"can
be read into s.34:
Held: [per K.V. Viswanathan, J.] It cannot be said that words
"and, to the extent" and the words "or modified", and "to the
extent" be read into parts of s.34 - Where the language is plain
and clear, the Court will prefer the plain meaning rule and when
there is no casus omissus, the Court cannot interpret a statute
as to create one - s.34 speaks of 'recourse' being taken against
an arbitral award - s.34 clearly states that an arbitral award may
be "set aside" by the Court "only if" the prescribed circumstances
are established - Phrase "only if" in the context in which it is
used makes it amply clear that only if the grounds prescribed are
established could the award be set aside - Combined use of the
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phrase "set aside" and "only if" read with the phrase "recourse"
makes it amply clear that the only manner of interfering with the
award as permitted in the Act, is to file an application to set aside
or annul the award by establishing the grounds prescribed therein -
ss.5, 33. [Paras 70, 73-76]
Arbitration and Conciliation Act, 1996 - s.34 - Application
for setting aside arbitral award - Plea that hardship will be
caused if power to modify is not read in s.34:
Held: [per K.V. Viswanathan, J.] Submission that absurdities will
result and hardship will be caused if power to modify is not read in
cannot be accepted since s.43(4) itself contemplates that on the
setting aside of the award the option is to commence proceedings
including arbitration with respect to the dispute - Law makers are
fully conscious of the situation that setting aside of the award will
result in the dispute continuing to be thrown open at large since
notwithstanding the setting aside of the award the legal position is
that the arbitration agreement survives, except in situations where
the order setting aside has findings impinging on the validity of the
arbitration agreement itself - Recommencement of proceedings
including arbitration proceedings-wherever legally maintainablebeing expressly contemplated in the statute the same cannot be
brushed aside on the grounds of causing hardship to the parties.
[Paras 77, 81]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Contrast between the appellate
power under Code of Civil Procedure and powers available
to s.34 Court:
Held: [per K.V. Viswanathan, J.] Wide power under CPC is not
available to a Court u/s.34 while entertaining an application to set
aside the arbitral award - Court does not sit in appeal over the
arbitral award - Arbitration has its origin in the contract between
parties where parties have stepped out of the ordinary judicial
process and in that sense there is an ouster of the jurisdiction
of the Court's power to adjudicate - s.34 Court unless expressly
authorized by law cannot modify or vary the award since it will be
tantamount to exercising the power of merits review, when parties
have contracted to have their disputes referred to a third party
outside the normal judicial process, for adjudication by arbitration -
Code of Civil Procedure, 1908. [Paras 84, 87-89]
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Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Power to 'modify', if a lesser power:
Held: [per K.V. Viswanathan, J.] Qualitative nature of an appellate
power is different from the power u/s.34 - Power to modify is not a
lesser power to that of the power to set aside, as the two operate
in separate spheres and are not of the same genus - They do not
have similar characteristics - It cannot be said that power to set
aside is larger and power to modify is smaller or lesser without
keeping the context in which s.34 occurs in the Act and without
considering the very ecosystem of the arbitration process - Thus,
the power to modify which would include the Court entering the
arena of adjudicating the dispute on merits when parties have
contractually agreed to go to the arbitrator, cannot be said to be
subsumed in the power to "set aside". [Paras 91, 93]
Arbitration and Conciliation Act, 1996 - s.34 - If Court can
lay down guardrails for s.34:
Held: [per K.V. Viswanathan, J.] There are no judicially manageable
standards and this Court cannot venture into formulating guidelines
as myriad situations will arise when s.34 applications are heard
before the appropriate Courts - It would amount to judicial legislation
which the Court is loathe to do. [Para 117]
Arbitration and Conciliation Act, 1996 - s.34 - Application for
setting aside arbitral award - Judgment in ‡Hakeem's case,
if per incuriam:
Held: [per K.V. Viswanathan, J.] Judgement in Hakeem's case
rightly interpreted the provisions of A&C Act and is in no manner
conflict with any ratio of a co-equal or larger Bench - It cannot be
said that Hakeem's case is per incuriam for not noticing Western
Geco's case - Other judgments prior to Hakeem's case have not
discussed the aspect whether power to modify exists in a s.34
Court - Hakeem's case insofar as it held that a s.34 Court has no
power to modify the award, is not per incuriam. [Paras 126, 127]
Judicial process - Contractual ouster of normal judicial process:
Held: [per K.V. Viswanathan, J.] When parties agree to arbitrate,
they consciously agreed to step out of the normal judicial process
and submit their dispute to a third party - Parties are also conscious
that when they agree to arbitrate, their rights and liabilities would
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Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited
be governed by the regulating Act, A&C Act - Thus, there is a
contractual ouster subject to the terms of the A&C Act of the normal
judicial process - Arbitration and Conciliation Act, 1996. [Para 82]
Legal maxims - Application, when:
Held: [per K.V. Viswanathan, J.)] Legal maxims to be deployed
after ascertaining context - Mechanical deployment of the legal
maxims unless they apply on all fours to a case to be discouraged -
Legal maxims, no doubt, are very useful tools but its application
has to be with great caution - There would be uncertainity and
sometimes legal maxims if deployed without adequate attention
may lead to pitfalls. [Para 97]
Code of Civil Procedure, 1908 - s.151 - Inherent powers of
the Court u/s.151, if available to modify awards:
Held: [per K.V. Viswanathan, J.] s.34 is couched in clear terms
and the parameters for setting aside the award are clearly laid
out in mandatory terms - Inherent powers under CPC cannot be
exercised in a manner to be in conflict with the expressly provided
powers by the legislature - It cannot be said that s.34 recourse is
taken in the normal Civil Courts as defined in s.2(e) of the A&C Act
and those Courts being Civil Courts of Original jurisdiction or the
High Courts the inherent power vested in them should be available
to modify awards - Arbitration and Conciliation Act, 1996. [Para 99]
Doctrines - Doctrine of implied power, if vest in s.34 Court a
power to modify the award:
Held: [per K.V. Viswanathan, J.] Doctrine of implied powers is
invoked to effectuate the final power - Where it is impossible to
effectuate the final power unless something not authorized in express
terms be also done, in such an event, the power will be supplied
by necessary intendment as an exception - No scope for applying
the doctrine of implied power to modify awards - No implied power
needed to effectuate the final power provided u/s.34 and, there is
no impediment to exercise the final power. [Paras 102, 103]
Arbitration - Arbitration process - Concept of party autonomy:
Held: [per K.V. Viswanathan, J.] Party autonomy enables parties
to dispense with technical formalities and procedures of National
Court proceedings, contractually - They agree to abide by the
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terms of the statute regulating arbitration which they perceive as
advantageous - Having done so, they cannot be allowed to cry afoul,
when it does not suit their needs and clamor for certain procedures
which are legislatively not sanctioned in the arbitration process and
are available in the normal machinery of the Courts - s.34 Court
cannot be invited to enter into the merits - Limited recourse available
is the one provided u/s.34 and when the Section is plain and clear
the historical, textual and the contextual interpretation does not
permit the reading in of any implied power to expand the scope
of s.34 - Arbitration and Conciliation Act, 1996 - s.34. [Para 105]
Case Law Cited
In the judgment of Sanjiv Khanna, CJI
Shilpa Sailesh v. Varun Sreenivasan [2023] 5 SCR 165 : (2023)
14 SCC 231 - followed.
Kinnari Mullick and Another v. Ghanshyam Das Damani [2017] 6
SCR 657 : (2018) 11 SCC 328 - held not correct law.
Gayatri Balasamy v. ISG Novasoft Technologies Limited, 2024
SCC OnLine SC 1681; McDermott International Inc. v. Burn
Standard Co. Ltd. and Others [2006] Supp. 2 SCR 409 : (2006)
11 SCC 181; Pure Helium India (P) Limited v. Oil & Natural Gas
Commission [2003] Supp. 4 SCR 561 : (2003) 8 SCC 593; Mukand
Ltd. v. Hindustan Petroleum Corpn. Ltd. [2006] Supp. 1 SCR 182 :
(2006) 9 SCC 383; Vedanta Limited v. Shenzhen Shandong
Nuclear Power Construction Company Limited [2018] 12 SCR 829 :
(2019) 11 SCC 465; Oil and Natural Gas Corporation Limited v.
Western GECO International Limited [2014] 12 SCR 1 : (2014) 9
SCC 263; Numaligarh Refinery Ltd. v. Daelim Industrial Co. Ltd.
[2007] 9 SCR 724 : (2007) 8 SCC 466; Tata Hydro-Electric Power
Supply Co. Ltd. and Others v. Union of India (2003) 4 SCC 172;
Ssangyong Engineering and Construction Company Limited v.
National Highways Authority of India (NHAI) [2019] 7 SCR 522 :
(2019) 15 SCC 131; Oriental Structural Engineers Private Limited v.
State of Kerala [2021] 4 SCR 137 : (2021) 6 SCC 150; Secretary,
Irrigation Department, Government of Orissa and Others v. G.C. Roy
[1991] Supp. 3 SCR 417 : (1992) 1 SCC 508; ‡Project Director,
National Highways No. 45 E and 220 National Highways Authority
of India v. M. Hakeem and Another [2021] 5 SCR 368 : (2021)
9 SCC 1; Ahmedabad St. Xavier College Society and Another v.
[2025] 4 S.C.R.
2093
Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited
State of Gujarat and Another [1975] 1 SCR 173 : (1974) 1 SCC
717; Pratap Chamaria v. Durga Prasad Chamaria, AIR 1925 PC
293; Grindlays Bank Ltd. v. Central Government Industrial Tribunal
and Others [1981] 2 SCR 341 : (1980) Supp. SCC 420; Budhia
Swain and Others v. Gopinath Deb and Others [1999] 2 SCR 1189 :
(1999) 4 SCC 396; Century Textiles Industries Limited v. Deepak
Jain and Another [2009] 4 SCR 750 : (2009) 5 SCC 634; Dyna
Technologies Private Limited v. Crompton Greaves Limited [2019]
15 SCR 295 : (2019) 20 SCC 1; I-Pay Clearing Services Private
Limited v. ICICI Bank Limited [2022] 2 SCR 893 : (2022) 3 SCC
121; Brace Transport Corporation of Monrovia, Bermuda v. Orient
Middle East Lines Limited, Saudi Arabia and Others [1993] Supp.
3 SCR 227 : (1995) Supp. 2 SCC 280 - referred to.
In the judgment of K.V. Viswanathan, J.
‡Project Director, National Highways No. 45 E and 220 National
Highways Authority of India v. M. Hakeem and Anr. [2021] 5 SCR
368 : (2021) 9 SCC 1 - held correct law.
R.S.Jiwani v. Ircon International Ltd., 2009 SCC OnLine Bom
2021; Saptarishi Hotels Pvt. Ltd. v. National Institute of Tourism
& Hospitality Management, 2019 SCC OnLine TS 1765; National
Highways Authority of India v. Trichy Thanjavur Expressway Ltd.,
2023 SCC OnLine Del 5183 - approved.
CIT, Central Calcutta v. National Taj Traders [1980] 2 SCR
268 : (1980) 1 SCC 370; Centrotrade Minerals & Metal Inc. v.
Hindustan Copper Ltd. [2016] 9 SCR 83 : (2017) 2 SCC
228 - held inapplicable.
Kinnari Mullick and Another v. Ghanshyam Das Damani [2017] 6
SCR 657 : (2018) 11 SCC 328 - held not correct law.
McDermott International Inc. v. Burn Standard Co. Ltd. [2006]
Supp. 2 SCR 409 : (2006) 11 SCC 181; Interplay Between
Arbitration Agreements under Arbitration and Conciliation Act, 1996
& Stamp Act, 1899, In re (2024) 6 SCC 1; Tata Hydro-Electric Power
Supply Co. Ltd. and Others v. Union of India (2003) 4 SCC 172;
J.C. Budhraja v. Chairman, Orissa Mining Corporation Ltd. and
Another [2008] 1 SCR 821 : (2008) 2 SCC 444; Madhya Pradesh
Power Generation Company Limited and Another v. Ansaldo
Energia Spa and Another (2018) 16 SCC 661; Vedanta Limited v.
Shenzhen Shandong Nuclear Power Construction Company
2094
[2025] 4 S.C.R.
Supreme Court Reports
Limited [2018] 12 SCR 829 : (2019) 11 SCC 465; Shakti Nath
and Others v. Alpha Tiger Cyprus Investment No.3 Limited and
Others (2020) 11 SCC 685; Oriental Structural Engineers Private
Limited v. State of Kerala [2021] 4 SCR 137 : (2021) 6 SCC 150;
Ramesh Rout v. Rabindra Nath Rout [2011] 16 SCR 254 : (2012)
1 SCC 762; Juggilal Kamlapat v. General Fibre Dealers Ltd.,
1961 SCC OnLine SC 402; Dyna Technologies Private Limited v.
Crompton Greaves Limited [2019] 15 SCR 295 : (2019) 20 SCC
1; Shamnsaheb M. Multtani v. State of Karnataka [2001] 1 SCR
514 : (2001) 2 SCC 577; Manohar Lal Chopra v. Rai Bahadur
Rao Raja Seth Hiralal, 1961 SCC OnLine SC 17; Padam Sen v.
State of Uttar Pradesh [1961] 1 SCR 884; Savitri v. Govind Singh
Rawat (1985) 4 SCC 337; Kunhayammed & Others v. State of
Kerala and Another [2000] Supp. 1 SCR 538 : (2000) 6 SCC 359;
National Insurance Co. Ltd. v. Pranay Sethi and Others [2017] 13
SCR 100 : (2017) 16 SCC 680; Oil and Natural Gas Corporation
Ltd. v. Western Geco International Ltd. [2014] 12 SCR 1 : (2014)
9 SCC 263; I-Pay Clearing Services (P) Ltd. v. ICICI Bank Ltd.
[2022] 2 SCR 893 : (2022) 3 SCC 121; Som Datt Builders Ltd. v.
State of Kerala [2009] 14 SCR 611 : (2009) 10 SCC 259; North
Delhi Municipal Corporation v. M/s. S.A. Builders Ltd., 2024 INSC
988; U.P. SRTC v. Imtiaz Hussain [2005] Supp. 5 SCR 725 :
(2006) 1 SCC 380; J.G. Engineers (P) Ltd. v. Union of India &
Anr. [2011] 8 SCR 486 : (2011) 5 SCC 758; Vishaka and Others v.
State of Rajasthan and Others [1997] Supp. 3 SCR 404 : (1997)
6 SCC 241; Oil and Natural Gas Corporation Limited v. Afcons
Gunanusa, JV 2022 SCC OnLine SC 1122; Supreme Court Bar
Association v. Union of India and Another [1998] 2 SCR 795 :
(1998) 4 SCC 409; Shilpa Sailesh v. Varun Sreenivasan [2023]
5 SCR 165 : (2023) 14 SCC 231 - referred to.
Gayatri Balaswamy v. ISG Novasoft Technologies Limited, 2014
SCC OnLine Mad 6568 - referred to.
Berkey v. Third Avenue Railway Co. 244 N.Y, 84; AKN v. ALC
2015 SGCA 63 - referred to.
Books and Periodicals Cited
In the judgment of Sanjiv Khanna, CJI
Sir Michael J. Mustill & Stewart C Boyd QC, Commercial Arbitration,
p. 617 (2nd ed. 2001) - referred to.
[2025] 4 S.C.R.
2095
Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited
In the judgment of K.V. Viswanathan, J.
"Mustill & Boyd" on Commercial Arbitration; P. Ramanatha Aiyar's
Advanced Law Lexicon Third Edition - referred to.
List of Acts
In the judgment of Sanjiv Khanna, CJI
Arbitration and Conciliation Act, 1996; Constitution of India; National
Highways Act, 1956; Code of Civil Procedure, 1908; Singapore
Arbitration Act, 2001; United Kingdom Arbitration Act, 1996; United
States of America Federal Arbitration Act, 1925; France Code of Civil
Procedure; Australia Commercial Arbitration Act, 2017 (Australian
Capital Territory); New Zealand Arbitration Act, 1996; Canada
Arbitration Act, 1991 Ontario; South Africa Arbitration Act, 42 of 1965;
Hong Kong Arbitration Ordinance; Kenya Arbitration Act, 1995; Brunei
Darussalam Arbitration Order, 2009; Philippines Republic Act No.
9285 (2004); Philippines Alternative Dispute Resolution Act, 2004;
Philippines Republic Act No. 876; Srilanka Civil Procedure Code.
In the judgment of K.V. Viswanathan, J.
Arbitration and Conciliation Act, 1996; Arbitration Act of 1899;
Arbitration Act, 1940; Constitution of India; National Highways
Act, 1956; Code of Civil Procedure, 1908; Contract Act, 1872;
Bharatiya Nagarik Suraksha Sanhita, 2023; English Arbitration Act;
New Zealand Arbitration Act, 1996; Kenyan Arbitration Act, 1995.
List of Keywords
In the judgment of Sanjiv Khanna, CJI
Modification of arbitral award; Omne majus continet in se minus;
Contours of s.34 Arbitration and Conciliation Act, 1996; Severability
of awards; Kompetenz-kompetenz; "Valid" portion of award;
"Invalid" portion of award; Power of partial setting aside; Minimal
judicial interference; Guardrails of power u/s.34 of the A & C Act;
Doctrine of implied power; Remand of award; Hardship to parties;
‡M. Hakeem's case; Power to "modify" the award; Divergent and
contrasting judicial opinions as regards the power of the court
u/s.34 to modify arbitral award; Power to set aside an award
u/s.34 of the A & C Act, being larger power; Limited power of
modification; Doctrine of merger; New York Convention Awards;
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Power of modification u/s.34; International Commercial Arbitration
Regime; Post-Award Interest; Power to modify an arbitral award,
if exercisable u/Art.142 of the Constitution; Power to set aside
award, if inclusive of the power to partially set it aside; Correction
of computational, clerical and typographical errors, or any other
error of similar nature; Suo moto exercise of s.34(4) of the A & C
Act; Modification of arbitral award under the National Highways
Act; Post-award settlement, if allowed; Power of recourse to a
court against arbitral award; Difference between setting aside
the award and modification of the award; Calculation of limitation
period, within which the fresh arbitration or court proceedings to be
commenced; UNCITRAL Model Law on International Commercial
Arbitration, 1985; United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, 1958
In the judgment of K.V.