Gurkaranbir Singh
The Supreme Court in Gayatri Balasamy v. ISG Novasoft Technologies Ltd.[i] 2025 SCC OnLine SC 986., (“Gayatri Balasamy Judgment”) has now clarified the scope of judicial intervention in respect of modification of arbitral awards. The Court held that a court is empowered not only to set aside an arbitral award but also to modify or vary it where the facts and the interests of justice so warrant. This pronouncement marks a significant development in Indian Arbitration Jurisprudence, signalling an expansion of judicial powers in relation to arbitral awards.
This article examines the judgment and highlights the risks, inconsistency, and departure from settled legal doctrines and arbitration jurisprudence. By analysing the judgment, the author highlights Hon’ble Justice K.V. Viswanathan’s dissent, compares arbitration friendly jurisdictions, and suggests that the Supreme Court should have left it for the Parliament to amend the Arbitration and Conciliation Act, 1996 (“the 1996 Act”) and thereby confer a modification power on the courts.
1. Section 5 and the Principle of Minimal Judicial Intervention in Arbitration
TheArbitration Act, 1940 (hereinafter “the 1940 Act”) expressly conferred upon the courts the power to modify or vary an arbitral award, as set out in Section 15 titled “Power of Court to Modify Award”. With the enactment of the 1996 Act, this express provision was omitted, contributing to the view that such powers were no longer available to the courts. The 1996 Act was modelled on the UNCITRAL Model Law on International Commercial Arbitration, 1985 (hereinafter “the Model Law”),[ii] which was formulated to harmonise arbitration and conciliation principles across jurisdictions and was primarily intended for international commercial arbitration. India adopted the Model Law with suitable modifications to also govern domestic arbitration with one of its key objectives i.e., the minimisation of judicial intervention in the arbitral process.
In line with the fundamental objective of minimising judicial intervention, Section 5 of the 1996 Act—titled “Extent of Judicial Intervention”— was expressly incorporated to reinforce the autonomy of the arbitral process. It provides:
“Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.”
As precisely noted in Para 87 of Gayatri BalasamyJudgment, Section 5 has both positive and negative facets: it permits judicial intervention only in matters expressly provided under Part I of the 1996 Act, and conversely, prohibits interference where the Arbitral Tribunal has exclusive jurisdiction. The non-obstante clause underscores this limitation, confining judicial involvement to situations expressly sanctioned by the 1996 Act. Such an interpretation was reinforced by another landmark judgment of the Supreme Court in Interplay Between Arbitration Agreements under Arbitration and Conciliation Act, 1996 & Stamp Act, 1899, In re, where the Supreme Court observed:
“81. One of the main objectives of the Arbitration Act is to minimise the supervisory role of Courts in the arbitral process. Party autonomy and settlement of disputes by an Arbitral Tribunal are the hallmarks of arbitration law. Section 5 gives effect to the true intention of the parties to have their disputes resolved through arbitration in a quick, efficient and effective manner by minimising judicial interference in the arbitral proceedings.”
In sum, the legislative scheme of the 1996 Act, reinforced by judicial interpretation, establishes Section 5 as a clear safeguard of arbitral autonomy. By strictly limiting court intervention to situations expressly provided under Part I, it affirms the primacy of party autonomy and the finality of the arbitral process.
2. Revisiting the contours of Section 34 Powers
At the outset, it is pertinent to note that the bare text of Section 34 is titled “Recourse to a court against an arbitral award” and refers specifically to the “setting aside” of an award. The combined use of the expressions “set aside” and “only if,” when read alongside the term “recourse,” makes it evident that the sole mode of judicial interference contemplated under the Act—and reinforced by Section 5—is through an application to set aside the award, by establishing one or more of the grounds expressly prescribed therein.
The 1996 Act does not confer upon courts, either under Section 34 or Section 37, the power to modify or vary an arbitral award; rather, the statutory language explicitly confines the court’s jurisdiction to the setting aside of an award.
However, the Supreme Court in reaching its conclusion, invoked the legal maxim “omne majus continet in se minus” (the greater power includes the lesser). The Supreme Court reasoned that if Section 34 of the 1996 Act empowers a court to set aside an arbitral award—it must necessarily encompass within it the lesser power to modify or vary the award.[iv]
But it is imperative to note here that power to modify 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”. It will be a different matter if the power to modify or power to vary is conferred by the legislature itself. Further, it is crucial to note that how courts exercising jurisdiction under Sections 34 and 37 of the 1996 Act would not modify or vary an award without indulging into a fact-finding exercise. In McDermott International Inc. v. Burn Standard Co. Ltd.,[v] the Supreme Court explicitly held that
“52. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired…”
More importantly in Project Director, NHAI v. M. Hakeem and Anr,[vi] the Supreme Court categorically held that Section 34 of the 1996 Act provides only for setting aside awards on very limited grounds. It held that Section 34 of the 1996 Act is modelled on the UNICTRAL Model Law on International Commercial Arbitration 1985 under which no power to modify an award is given to a court hearing a challenge to an award. It is further crucial to observe that, had it been the intention of Parliament to confer upon the courts the power to modify or vary an arbitral award, such authority would have been expressly incorporated into the statutory framework of the 1996 Act through legislative amendment. The 1996 Act has undergone substantial amendments on three separate occasions—in 2015, 2019, and 2021—each designed to refine and strengthen the arbitral process in India.[vii]
Notwithstanding these legislative amendments, Parliament has consciously refrained from introducing any provision conferring the power of modification or variation of arbitral awards. This deliberate omission strongly suggests that the legislative intent was to restrict judicial authority under Sections 34 and 37 exclusively to the setting aside of awards, thereby maintaining fidelity to the principle of minimal judicial interference that underpins the 1996 Act.
3. Section 33: Clarificatory Powers and The Limits of Post-Award Intervention
The Supreme Court in its majority judgment, inter alia others, held that the courts exercising power under Sections 34 and 37 can correct any clerical, computational, or typographical errors which appear erroneous on the face of the record. At this juncture, it is important to note that Section 33 of the 1996 Act empowers the arbitral tribunal to correct, interpret, or supplement its award within a limited scope and timeframe.
However, unlike an arbitral tribunal, courts are not vested with any such power under Sections 34 and 37 of the 1996 Act. The Supreme Court’s recognition of a judicial power to correct clerical or computational errors under these provisions therefore raises questions of coherence within the arbitration statutory framework. This interpretation appears to extend judicial intervention beyond the limits envisaged under Section 34 of the 1996 Act, potentially creating tension with the principle of minimal court interference embodied in Section 5 of the 1996 Act.
Furthermore, a harmonious reading of Sections 31, 34(1), 34(2-A), and 34(4) of the 1996 Act indicates that, in appropriate cases and upon the request of a party, the court may remit the matter to the arbitral tribunal for limited purposes. Such purposes include enabling the tribunal to provide additional reasoning or to address gaps in the reasoning underlying findings already rendered in the award. Similarly, where issues arise in relation to the award of interest—such as non-award of interest, award of interest beyond the contractual terms, or the grant of excessive or unreasonably low interest—the Court, under Section 34, does not possess the power to modify the award. Instead, the proper course of action is to record its concerns and remit the matter under Section 34(4) to the arbitral tribunal for appropriate correction.
It is noteworthy that this mechanism reflects a legislative intent to preserve the finality of arbitral awards while allowing the arbitral tribunal, than the court, to undertake necessary clarifications or adjustments. The power to correct, clarify, or supplement the award was thus always designed to remain with the tribunal, thereby reinforcing the principle of minimal judicial intervention that underpins the 1996 Act.
The judgment raises serious concerns about its compatibility with the statutory framework of the 1996 Act. Section 5 which is widely regarded as the bedrock of Indian arbitration jurisprudence—mandates minimal judicial intervention. Yet, by recognising in courts exercising powers under Section 34 an authority to correct clerical or computational errors, the judgment appears to extend judicial powers beyond what the legislature expressly intended. This expansion directly overlaps with and arguably overrides the powers conferred exclusively upon arbitral tribunals under Section 33, which carefully circumscribes the scope for correction, interpretation, or supplementation of an award.
In addition, the judgment effectively reads into Section 34 a power of modification that the legislature deliberately withheld, notwithstanding multiple amendments to the 1996 Act. Such a judicial gloss risks undermining legislative clarity and coherence. It also revives elements of the earlier 1940 Arbitration Act—an era marked by excessive court intervention—that the 1996 Act sought to decisively move away from. Furthermore, this reasoning was advanced under the broad rubric of doing “complete justice,” a constitutional power of the Supreme Court, but one that sits uneasily with the legislative scheme designed to insulate arbitration from judicial overreach.
Taken together, these aspects reveal a jurisprudential incoherence: the judgment is inconsistent with the statutory design, misaligned with the principle of minimal judicial interference, and potentially detrimental to India’s aspirations of positioning itself as an arbitration-friendly jurisdiction.[viii]
4. Article 142: The Supreme Court’s Power To Do Complete Justice
Article 142 of the Indian Constitution empowers the Supreme Court to pass such decrees or make such orders as are necessary to ensure complete justice in any cause or matter pending before it, and any such decree or order is enforceable throughout the territory of India. In its judgment, the Supreme Court reiterated that this provision vests it with the authority to do complete justice, even if that requires departing from established procedural provisions. On this basis, the Court held that it may exercise its powers under Article 142 to modify an arbitral award, particularly in cases where the interest component requires adjustment or modification. While doing so, the Court placed reliance on Shilpa Sailesh v. Varun Sreenivasan,[ix] observing:
“……..Even in the strictest sense, it was never doubted or debated that this Court is empowered under Article 142(1) of the Constitution of India to do “complete justice” without being bound by the relevant provisions of procedure, if it is satisfied that the departure from the said procedure is necessary to do “complete justice” between the parties.”
The Supreme Court cautioned, however, that this power should not be exercised in a manner that effectively rewrites the award or alters it on its merits. It clarified that Article 142 may be invoked where necessary to bring litigation or a dispute to a conclusion, thereby ending protracted proceedings and conserving the time and resources of the parties. The Supreme Court has exercised this power in practice. In PGI Chandigarh v. Kalsi Construction Company,[x] [Para Nos. 6,7,8], the Court reduced the interest rate initially awarded by the arbitral tribunal. Similarly, in Vedanta Limited v. Shenzhen Shandong Nuclear Power Construction Company Limited[xi] [Para Nos. 14,15,16,20], the Court modified the interest rate awarded by the arbitral tribunal under Article 142.
However, it is imperative note here that while the exercise of Article 142 may offer practical benefits by resolving disputes efficiently and conserving resources, it remains in tension with the statutory design of the 1996 Act and the core principle of minimal judicial interference, raising important questions about the limits of judicial intervention in arbitration. More importantly, as noted by Hon’ble Justice K.V. Viswanathan that if power is reserved for this Court to modify an arbitral award 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 will be antithetical to arbitration as an alternative and efficacious mode of dispute resolution.[xii]
5. The Dissenting View: Finality And Legislative Intent
Justice K.V. Viswanathan’s dissent is a powerful defence of arbitral finality and a caution against judicial overreach. He begins by stressing that arbitration is chosen precisely because it offers parties a binding and conclusive resolution outside the protracted delays of litigation. The 1996 Act deliberately restricts the role of courts to either upholding or setting aside an award under Section 34. By allowing modification, courts risk undermining the very purpose of arbitration, turning it into another stage of litigation rather than an alternative to it. He underscores that arbitral awards must be treated as final, except in cases where they violate fundamental principles of justice, and even then, the only remedy available should be setting aside and not rewriting/modifying that too at the fag end of the litigation.
He further anchors his reasoning in precedent, particularly the Supreme Court’s ruling in Project Director, NHAI v. M. Hakeem, which categorically held that Section 34 does not empower courts to modify arbitral awards. To depart from this principle, he rightly argues, would create uncertainty in arbitration law and erode confidence in India’s arbitration framework. He warns that judicial modification would invite endless challenges, as dissatisfied parties could seek to have courts tinker with awards rather than accept closure. Lastly, he rightly says that Article 142 of the Constitution shall not be exercised by this Court to modify awards passed by arbitrators as it is well settled that the Article 142 power cannot be used to give a go by to the substantive statutory provision.
6. Comparative Lens
A comparative review underscores how sharply India’s interpretive expansion departs from international practice. In NHAI v. M Hakeem (Supra),[xiii] the Supreme Court itself acknowledged that jurisdictions such as England, the United States, Canada, Australia, and Singapore contain express provisions permitting limited variation of awards, whereas Section 34 of the 1996 Act does not. For example:
a. The United Kingdom’s Arbitration Act 1996, allows the courts to “vary the award” apart from setting aside or confirming the award.[xiv]
b. Similarly, Singapore allows its courts to “vary the award” apart from setting aside or confirming the award under Section 49 of the Singapore Arbitration Act of 2001.[xv]
c. Australia under Section 34A of the Commercial Arbitration Act, 2017 (CAA)[xvi] provides that upon determination of an appeal under this section, the court may “vary the award.”
Against this backdrop, India’s judicially‑created power of modification appears anomalous: it lacks statutory basis, diverges from the Model Law framework, and risks unsettling confidence in India as a reliable arbitration seat.
7. Conclusion
Viewed holistically, the judgment invites two distinct interpretive lenses. From a pragmatic perspective, recognizing a limited judicial power to modify arbitral awards may, in select cases, may enhance procedural efficiency. Yet this pragmatic gain comes with a structural and foundational risk: expanding the scope of Section 34 even in a narrowly tailored fashion may open the door to disguised appellate review. Despite the statutory bar on reassessing factual findings, parties may attempt to re-litigate substantive issues under the pretext of seeking modifications, thereby undermining the finality and autonomy of arbitral awards. More importantly, such a power hinges upon party autonomy and contractual consent—the bedrock of arbitration.
That said, the more coherent solution should have come through a legislative amendment. A consultative exercise could have been explored whether and to what extent courts should be empowered to modify arbitral awards, allowing for clearer deliberation on the appropriate guardrails. For example, the Court itself has previously adopted such a course: in IFFCO Ltd. v. Bhadra Products,[xvii] it suggested that Parliament may consider amending Section 34 to consolidate interim and final awards so that a single challenge could be brought after delivery of the final arbitral award. By contrast, in Gayatri Balaswamy, the majority relied in part on Article 142 of the Constitution to justify the exercise of modification powers. With respect, this reliance is problematic. Article 142 should not be used to sidestep or override the statutory framework laid down by Parliament.
A principled way forward lies in legislative clarification. If the power to modify is to be formally embedded within India’s arbitral framework, it must be codified with precise contours and safeguards. Such reform would align India with established international arbitration practices while mitigating the risks of excessive judicial discretion. In the interim, courts must tread cautiously, exercising any interpretive expansion of Section 34 with restraint and fidelity to the Act’s foundational principles.
[i] 2025 SCC OnLine SC 986.
[ii] United Nations Commission on International Trade Law (UNCITRAL), UNCITRAL Model Law on International Commercial Arbitration, U.N. Doc. A/40/17, Annex I (1985), with amendments adopted in 2006, available at https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/06-54671_ebook.pdf.
[iii] [(2024) 6 SCC 1.
[iv] Gayatri Balasamy Judgment, para 46.
[v] (2006) 11 SCC 181.
[vi] (2021) 9 SCC 1.
[vii] Pratik Datta, ‘Judicial Innovation or Overreach? Indian Supreme Court’s New Take on Modification’ (Oxford Business Law Blog, June 2025) https://blogs.law.ox.ac.uk/oblb/blog-post/2025/06/judicial-innovation-or-overreach-indian-supreme-courts-new-take-modification.
[viii] Wolters Kluwer Arbitration Blog, Arbitration’s USP at Stake: Supreme Court Settles the Debate over Judicial Modification of Awards in India, (Dec. 2023), available at https://legalblogs.wolterskluwer.com/arbitration-blog/arbitrations-usp-at-stake-supreme-court-settles-the-debate-over-judicial-modification-of-awards-in-india/.
[ix] 2023) 14 SCC 231.
[x] 2019) 8 SCC 726.
[xi] (2019) 1 SCC 465.
[xii] Gayatri Balasamy Judgment, para 114.
[xiii] Supra note vi, at para 43.
[xiv] See Section 67, 68 , 69 of the English Arbitration Act, 1996.
[xv] mothy Cooke, Min Jian Chan & Anand Tiwari, Challenging and Enforcing Arbitration Awards: Singapore, Global Arbitration Review (23 May 2025), available at [htps://globalarbitrationreview.com/insight/know-how/challenging-and-enforcing-arbitration-awards/report/singapore](
[xvi] Global Arbitration Review, Challenging and Enforcing Arbitration Awards: Australia Report, available at https://globalarbitrationreview.com/insight/know-how/challenging-and-enforcing-arbitration-awards/report/australia.
[xvii] (2018) 2 SCC 534 at para 30.
Gurkaranbir Singh is a B.A. LL.B. (Hons.) graduate from Symbiosis International University and an associate a Numen Law Offices.
NUALS Law Journal 