Key points
- On 30 April 2025 a five-judge bench held, 4:1, that courts have a limited power to modify arbitral awards under sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (2025 INSC 605).
- The power covers four situations: severing an invalid part of a severable award; correcting clerical, computational or typographical errors on the face of the record; modifying post-award interest in some circumstances; and the Supreme Court’s power under Article 142, used with great care.
- Outside these situations a court still does not rewrite an award; remitting it to the tribunal under section 34(4) remains available.
- Justice K.V. Viswanathan dissented, holding that courts have no power to modify awards.
Under the Arbitration and Conciliation Act, 1996, a party unhappy with an award can apply to court under section 34 to have it set aside, on narrow grounds, and can appeal under section 37. For years the Supreme Court read these provisions as giving courts two choices only: uphold the award or set it aside. In Project Director, NHAI v. M. Hakeem (2021) it held that a court hearing a section 34 challenge cannot modify an award. Parties could be left to start a fresh arbitration to correct a single wrong figure.
On 30 April 2025 a Constitution Bench answered a reference on the question in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. By a majority of four (Chief Justice Sanjiv Khanna and Justices B.R. Gavai, Sanjay Kumar and Augustine George Masih) to one (Justice K.V. Viswanathan), it held that courts do have a power to modify, but a limited one.
The four situations
The majority held (para 85) that the power may be exercised:
- when the award is severable, by severing the invalid portion from the valid portion;
- by correcting clerical, computational or typographical errors which appear erroneous on the face of the record;
- to modify post-award interest in some circumstances; and
- under Article 142 of the Constitution, a power of the Supreme Court alone, which must be exercised with great care and caution and within the limits of that power.
Outside these situations the familiar position stands. A court hearing a challenge to an award does not sit in appeal over it, and where the tribunal can cure a defect, the court may adjourn the challenge under section 34(4) to let the tribunal do so.
The dissent
Justice Viswanathan would have held that courts under sections 34 and 37 have no power to modify an award; that modifying is not a lesser form of setting aside; that the Supreme Court should not use Article 142 to modify awards; and that interest should be dealt with by remitting the award to the tribunal under section 34(4).
What it means in practice
- Before going to court, ask the tribunal to correct computational, clerical or typographical errors under section 33, within 30 days of receiving the award unless the parties have agreed another period. It is quicker than a court challenge.
- In a section 34 petition, plead in the alternative: if part of the award is bad and can be separated, ask the court to sever it rather than set aside the whole; if the only problem is interest after the award, say so.
- Award holders should expect challenges to ask for modification as well as setting aside, and should be ready to argue that the award is not severable or that the error is not one on the face of the record.
- When presenting claims, keep each head of claim and its reasoning distinct, so that a defect in one is less likely to affect the rest.
- Expect argument at the edges. How far the power over interest and the Article 142 route extend will be worked out case by case.
See our arbitration and dispute resolution page, our disputes and arbitration FAQs, and our articles on enforcing foreign arbitral awards and unstamped arbitration agreements.
Sources
This article is for general information and states the law as at 2 November 2026. It is not legal advice. For advice on your situation, contact the firm. Published by BRB Legal.
