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Date: 05.05.2025
Supreme Court Constitution Bench Rules: Courts Can Modify Arbitral Awards in Limited Cases, Invokes Article 142 for Complete Justice
In a landmark Constitution Bench judgment delivered on 30 April 2025, the Supreme Court of India in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025 INSC 605) addressed two pivotal legal concerns that had long vexed Indiaβs arbitration ecosystem:
- Whether courts have the power to modify arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996, and
- Whether the power under Article 142 of the Constitution can be invoked to grant complete justice in arbitration-related disputes.
The Constitution Bench decisively ruled that courts do possess limited power to modify arbitral awards. Furthermore, the Court held that in appropriate cases, Article 142 can be invoked to modify awards where doing so avoids unnecessary remand and protracted arbitration.
Context: The Precedent Conflict
Earlier rulings, such as Project Director, NHAI v. M. Hakeem (2021), had suggested that courts could only set aside or remand awardsβnot modify themβunder Section 34. This created an enforcement challenge where minor or severable defects in arbitral awards required the parties to re-commence lengthy arbitration proceedings.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: Supreme Court
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