Abstract:
This article examines the recent ruling of the Supreme Court addressing whether courts have the power to modify arbitral awards under Section 34 (setting aside proceedings) and Section 37 (appeals from Section 34 orders) of the Arbitration and Conciliation Act, 1996. The issue had long been unsettled, with conflicting judicial precedents, some permitting modification in limited cases and others confining courts’ powers strictly to setting aside awards. In Gayatri Balasamy v. ISG Novasoft Technologies Ltd., the Court clarified that while Section 34 does not expressly confer a power to modify, a limited power exists to correct clear and severable errors, particularly concerning post-award interest or clerical mistakes, provided the court does not reassess the merits. The article analyzes the judgment’s legal reasoning, its implications for arbitral finality, and its interface with Article 142 of the Constitution. It presents contrasting perspectives: one author supports a restrained judicial power to modify, while the other advocates strict adherence to statutory boundaries. The article concludes that while the ruling brings some clarity, it also leaves unresolved issues particularly regarding operational limits, highlighting the need for legislative intervention to definitively settle the scope of judicial interference in arbitral awards.

Keywords: Modification of Arbitral Awards ,Section 34 and Section 37 Jurisdiction, Judicial Interference in Arbitration, Finality of Arbitral Awards ,Article 142 and Arbitration Law

Cite this as: Shalaka Patil and Harsh Khanchandani , “Supreme Court’s Interpretation On Modifying Arbitral Awards: A Drift From Deference To Intervention?” 5 IRIArb (2025).

*The views expressed are of author(s) only.

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