Debating Judicial Power: Can Courts Modify Arbitral Awards?

The Supreme Court of India is deliberating whether courts can modify arbitral awards under the Arbitration and Conciliation Act, 1996, a decision that will impact the nation's arbitration framework. The Centre suggests this authority should reside with the legislature considering evolving arbitration needs.

The Supreme Court of India is assessing a significant legal issue regarding the power of courts to modify arbitral awards under the Arbitration and Conciliation Act, 1996, highlighting its impact on the arbitration landscape.

A five-judge Constitution bench led by Chief Justice Sanjiv Khanna deliberated whether such authority should be legislated, given evolving national arbitration requirements. Solicitor General Tushar Mehta urged that this question be left to the legislative domain, noting that the absence of modification powers requires courts to set aside entire awards, even for minor errors.

The upcoming hearing, scheduled for February, will include international perspectives and examine whether current frameworks align with the objectives of minimal judicial interference and expedited dispute resolutions. The legal examination stems from the case Gayatri Balasamy v. ISG Novasoft Technologies Ltd., reflecting the ongoing complexity faced by the judicial system in arbitration matters.