Debate in Supreme Court: Can Courts Modify Arbitral Awards?

The Supreme Court is deliberating whether courts have the authority to modify arbitral awards under the Arbitration and Conciliation Act, 1996. A five-judge bench is reviewing arguments about Section 34, which permits setting aside awards. The case, stemming from Gayatri Balasamy v. ISG Novasoft, involves senior advocates and the solicitor general.

The Supreme Court is currently deliberating whether courts possess the authority to modify arbitral awards under the 1996 Arbitration and Conciliation Act. A five-judge Constitution bench is evaluating arguments, including those from senior advocate Arvind Datar, on the interpretation of Section 34, which allows courts to set aside awards on limited grounds.

The case of Gayatri Balasamy v. ISG Novasoft Technologies has sparked debate over the extent of judicial powers in arbitration cases. Datar argues modifications should be possible when awards conflict with public policy or exhibit patent illegality. The judiciary's role in altering an award is being scrutinized, with advocates divided on the issue.

The Centre suggests legislative intervention may be more suitable to address evolving national arbitration needs. As hearings continue, the bench emphasizes the necessity of clarity, weighing the extent of possible judicial modifications against maintaining the finality and efficiency of arbitration.

(With inputs from agencies.)