Balancing Finality And Fairness: The Hon’ble Supreme Court’s Interpretation Of Modification Powers Under The Arbitration And Conciliation Act, 1996
- IJLLR Journal
- Jun 7
- 1 min read
Ayushi Dangre, Advocate and Pursuing Ph.D. from MNLU, Nagpur
ABSTRACT
This article analyzes the Hon’ble Supreme Court’s interpretation of Section 34 of the Arbitration and Conciliation Act, 1996, focusing on the extent of judicial intervention permissible in setting aside or modifying arbitral awards. The Hon’ble Supreme Court addressed two pivotal questions: whether principles of equity and justice can be applied without exceeding the jurisdictional framework of Section 34, and whether the power to set aside an award includes the authority to partially set it aside. The judgment affirms the doctrine of severability, holding that courts may sever invalid portions of an award when such parts are legally and practically separable from the valid portions. The Hon’ble Court further classified its powers under Section 34 into three categories: setting aside an award, remanding the matter under Section 34(4), and acknowledging the arbitrator’s powers under Section 33. Emphasizing the objectives of efficiency and finality in arbitration, the Hon’ble Court endorsed limited judicial modification over annulment where it serves justice without undermining statutory boundaries. The doctrine of implied powers was invoked to support this pragmatic approach. However, the Hon’ble Court cautioned against modification in cases where the award’s components are inseparably intertwined or when doing so would constitute an error apparent on the face of the record. This interpretation aims to balance judicial restraint with the need for just and expedient dispute resolution.
Keywords: Arbitral awards modification; Indian courts power to modify awards; Arbitration law reforms India; Supreme Court arbitration decisions; Section 34 Indian Arbitration Act; Judicial review of arbitral awards; Article 142 Indian Constitution; Modification of arbitral awards judicial power; Five-judge constitutional bench India
