MANU/SC/0609/2025

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. ... of 2025 (Arising out of S.L.P. (C) Nos. 15336-15337 of 2021), Civil
Appeal No. ... of 2025 (Arising out of S.L.P. (C) No. 21301 of 2024), Civil Appeal No. ...
of 2025 (Arising out of S.L.P. (C) No. 17941 of 2019), Civil Appeal No. ... of 2025
(Arising out of S.L.P. (C) No. 7973 of 2022), Civil Appeal Nos. of 2025 (Arising out of
S.L.P. (C) Nos. 4961-4962 of 2024), Civil Appeal No. ... of 2025 (Arising out of S.L.P.
(C) No. ... of 2025 (Arising out of S.L.P. (C) Diary No. 7789 of 2024)), Civil Appeal
Nos. ... of 2025 (Arising out of S.L.P. (C) Nos. 18656-18663 of 2024), Civil Appeal Nos.
8183 of 2016 and 8184 of 2016
Decided On: 30.04.2025
Gayatri Balasamy Vs. ISG Novasoft Technologies Limited
Hon'ble Judges/Coram:
Sanjiv Khanna, C.J.I., B.R. Gavai, P.V. Sanjay Kumar, Augustine George Masih and K.V.
Viswanathan, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Debmalya Banerjee, Adv., Rohan Sharma, Adv., Vikas
Gogne, Adv., Satyam Chaturvedi, Adv., Agastya Shelat, Adv., Tanvi Seth, Adv.,
Karanjawala & Co., AOR, Tushar Mehta, SG, Sudarshan Lamba, AOR, Kanu Agarwal,
Adv., Ashwin Shanker, Adv., Sanjay Grover, Adv., Ridhi Nyati, Adv., Vanshika Jain, Adv.,
Shivlal Singh, Adv., K.V. Mohan, AOR, Vaibhav Dang, Adv., Amrendra Kumar Mehta,
AOR, Anita Mahapatra, Adv., Gunjan Kumari, Adv., Jinendra Jain, AOR, Ajay Jain, Adv.,
Krishna Sharma, Adv., Bijay Lakshmi, Adv., M.N. Mishra, Adv., Manoj Gautam, Adv.,
Kunaal Sharma, Adv., Akul Chalia, Adv., Harshit Batra, Adv., Mitika Choudhary, Adv.,
Shreya Jain, Adv., Akshat Jain, Adv., R.C. Bansal, Adv., T. Harish Kumar, AOR, Bharathi
Subramanian, Adv., Shubham P. Chopra, Adv., Arvind Datar, Sr. Adv., Nishanth Patil,
AOR, M.V. Mukunda, Adv., Mithun Shashank, Adv., M.V. Swaroop, Adv., Payal Chawla,
A dv., Hina Shaheen, Adv., Arijit Dey, Adv., Manish K. Bishnoi, AOR and Khubaib
Shakeel, Adv.
For Respondents/Defendant: Saurabh Kirpal, Sr. Adv., Manmeet Kaur, Adv., Debmalya
Banerjee, Adv., Rohan Sharma, Adv., Gurtej Pal Singh, Adv., Rohan Anand, Adv., Jai
Dogra, Adv., Liza Vohra, Adv., Dhruv, Adv., Karanjawala & Co., AOR, Naresh Markanda,
Sr. Adv., Rohan Markanda, Adv., Mrs. Harsheen Madan Palli, Adv., Chritarth Palli, AOR,
Ritin Rai, Sr. Adv., Benny P. Thomas, Sr. Adv., Abel Tom Benny, Adv., Abhishek
Kshetarpal, Adv., Ritika Sinha, Adv., Ankita Gupta, Adv., Dhiliban Varadarajan, Adv.,
Debasis Jena, Adv., Prakash Ranjan Nayak, AOR, Tushar Mehta, S.G., Surjendu Sankar
Das, AOR, Annie Mittal, Adv., Tushar Mehta, S.G., Nikilesh Ramachandran, AOR,
Lovekesh Aggarwal, Adv., Neelam Rathore, Adv., Shubham Seth, Adv., Prakruti
Malhotra, Adv., Abhinav Sharma, Adv., Alok Tripathi, AOR, Vikramjit Banerjee, ASG,
Sudarshan Lamba, AOR, Rahul G. Tanwani, Adv., Anantha Narayana M.G., AOR,
Shubhendu Anand, Adv., Tadimalla Bhaskar Gowtham, Adv., Ayush Anand, Adv.,
Sudipto Sircar, Adv., Aditya Shekhar, Adv., Rishi Ashok, Adv., P.D.V. Srikar, Adv., Aman
Shukla, Adv., Alabhya Dhamija, Adv., Aditya Kashyap, Adv., Neeleshwar Pavani, Adv., M.
Chandrakanth Reddy, Adv., Suvigya Awasthy, Adv., Sameer Jain, Adv., Vivek Joshi,
Adv., Rohan Gulati, Adv., Deepesh Raj, Adv., Soayib Qureshi, AOR, Tushar Mehta, S.G.,
Ankur Mittal, Adv., Abhay Gupta, Adv., Nidhi Mittal, Adv., U.C. Mittal, Adv., Ikshita
Parihar, Adv., Sanjivan Chakraborty, Adv., Rakshit Ranjan, Adv., Ankur Saboo, Adv.,
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Aviraj Pandey, Adv., Kaustubh Prakash, AOR, Hita Sharma, Adv., Tanya Singh, Adv.,
Gourab Banerji, Sr. Adv., George Pothan Poothicote, Adv., Manisha Singh, Adv., Jyoti
Singh, Adv., Prakarsh Kumar, Adv., Rakesh Talukdar, Adv., T.S. Sundaram, Adv.,
Subhro Mukherjee, Adv., Mohit Pandey, Adv., Raka Chatterjee, Adv., Venkata Supreeth,
A dv., Arunava Mukherjee, AOR, Abhishek Kumar Rao, Adv., Shailesh Suman, AOR,
Shekhar Naphade, Sr. Adv., Aniruddha Joshi, Sr. Adv., Shashibhushan P. Adgaonkar,
AOR, Salonee Paranjape, Adv., Pradnya S. Adgaonkar, Adv., Kiran Bishnoi, Adv., A.S.
Jamuna, Adv., Anoop Raj, Adv., Prashanto Chandra Sen, Sr. Adv., Sudiep Shrivastava,
A dv., Pranav Sachdeva, AOR, Rashi Goswami, Adv., Jatin Bhardwaj, Adv., Tanmay
Yadav, Adv., Sirithi Sreekumar, Adv., Pallav Mongia, AOR, Shashank Dwivedi, Adv.,
Anubhav Mishra, Adv., Sunanda Chowdhury, Adv., Saket Sikri, Adv., Naman Joshi, Adv.,
Ritika Vohra, Adv., Ajay P. Singh, Adv., Charu Ambwani, Adv., Guneet Sidhu, Adv.,
Priyal Goyal, Adv., Rahul, Adv., Amber Tickoo, Adv., Shivam Gera, Adv., Akashdeep
Singh, Adv., Verdaan Jain, Adv., Manisha Ambwani, AOR, Sukanya Lal, AOR, Saurav
Agrawal, Adv., Sonali Jaitley Bakhshi, Adv., Jaiyesh Bakhshi, Adv., Ravi Tyagi, AOR,
Mayank Mishra, Adv., Manmilan Sidhu, Adv., Manish Bhatt, Adv., Atharva Koppal, Adv.,
Neetu Devrani, Adv., Abhijay Basu, Adv., Babit Jamwal, Adv., Prachi Dubey, Adv.,
Anshuman Chowdhury, Adv., Ajay Sharma, Adv., Mahek Upadhaya, Adv., Arya Bhatt,
Adv., Soloni Paliwal, Adv., Harsh Khabar, Adv., Sarthak Nayak, Adv., Anushruti, Adv.,
Darius J. Khambata, Sr. Adv., Aditya Mehta, Adv., C. Rashmikant, Adv., Mahesh
Agarwal, Adv., Ankur Saigal, Adv., S. Lakshmi Iyer, Adv., Rohan Dakshini, Adv.,
Namrata Shah, Adv., Suprriya Lopes, Adv., Sailee Dhayalkar, Adv., Shashwat Singh,
Adv., Jai Sanyal, Adv., Vidhi Shah, Adv., E.C. Agrawala, AOR, Gaurav Pachnanda, Sr.
Adv., Garima Bajaj, AOR, Mohit Goel, Adv., Sidharth Goel, Adv., Raghavendra Mohan
Bajaj, Adv., Karmanya Dev Sharma, Adv., Aishna Jain, Adv., Shashwat Mukherjee, Adv.,
Ishaan Pratap Singh, Adv., Nikita Jaitly, Adv., Siddharth Kapoor, Adv., Shreya Bansal,
Adv., Sumeet Pushkarna, Sr. Adv., Nikhilesh Krishnan, Adv., Gaurav Varma, AOR, Varun
Chugh, Adv., Sudeep Vijayan, Adv., Abhishek Bhushan Singh, Adv., Swapnil Joshi, Adv.,
Aishwarya Mishra, Adv., Dr. Amit George, Adv., Dhiraj Abraham Philip, AOR, Febin
Mathew Varghese, Adv., Chand Chopra, Adv., Namrata Mohapatra, Adv., Achalika Ahuja,
A dv., Arkaneil Bhaumik, Adv., Adhishwar Suri, Adv., Suparna Jain, Adv., Ibansara
Syiemlieh, Adv., Dushyant Kishna Kaul, Adv., Rupam Jha, Adv., Medhavi Bhatia, Adv.,
Maniesh Gandhi, Adv. and Naveen Richard, Adv.
JUDGMENT
Sanjiv Khanna, C.J.I.
1 . A three-Judge Bench of this Court, vide order dated 20th February 2024, directed
that the Special Leave Petitions in Gayatri Balasamy v. ISG Novasoft Technologies
Limited, 2024 SCC OnLine SC 1681 be placed before the Chief Justice of India for an
appropriate order. The matter was to be examined to determine the need to refer the
following questions of law to a larger Bench:
1. Whether the powers of the Court Under Sections 34 and 37 of the Arbitration
and Conciliation Act 1996 will include the power to modify an arbitral award?
2 . If the power to modify the award is available, whether such power can be
exercised only where the award is severable, and a part thereof can be
modified?
3. Whether the power to set aside an award Under Section 34 of the Act, being
a larger power, will include the power to modify an arbitral award and if so, to

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 what extent?
4 . Whether the power to modify an award can be read into the power to set
aside an award Under Section 34 of the Act?
5. Whether the judgment of this Court in Project Director NHAI v. M. Hakeem,
MANU/SC/0461/2021 : (2021) 9 SCC 1 followed in Larsen Air Conditioning and
Refrigeration Company v. Union of India, MANU/SC/0876/2023 : (2023) 15
SCC 472 and SV Samudram v. State of Karnataka, MANU/SC/0016/2024 :
(2024) 3 SCC 623 lay down the correct law, as other benches of two Judges (in
Vedanta Limited v. Shenzden Shandong Nuclear Power Construction Company
Limited, (2019) 11 SSC 465 Oriental Structural Engineers Pvt. Ltd. v. State of
Kerala, MANU/SC/0299/2021 : (2021) 6 SCC 150 and M.P. Power Generation
Co. Ltd. v. Ansaldo Energia Spa) MANU/SC/0383/2018 : (2018) 16 SCC 661
and three Judges (in J.C. Budhraja v. Chairman, Orissa Mining Corporation Ltd.,
MANU/SC/0602/2008 : (2008) 2 SCC 444 Tata Hydroelectric Power Supply Co.
Ltd. v. Union of India, MANU/SC/0095/2003 : (2003) 4 SCC 172 and Shakti
Nath v. Alpha Tiger Cyprus Investment No. 3 Ltd. MANU/SC/0199/2020 :
(2020) 11 SCC 685) of this Court have either modified or accepted modification
of the arbitral awards under consideration?
2. Accordingly, this Bench of five-Judges has been constituted to decide the questions
referred.
3 . The fulcrum of the legal controversy rests on the following question(s): Are Indian
courts jurisdictionally empowered to modify an arbitral award? If so, to what extent?
The controversy arises because the Arbitration and Conciliation Act, 1996,1 does not
expressly empower courts to modify or vary an arbitral award. Section 34 of the 1996
Act only confers upon courts the power to set aside an award. Nevertheless, this Court,
on several instances, has been compelled to modify arbitral awards, seeking to
minimize protracted litigation and foster the ends of justice. In contrast, some
judgments have posited that Indian courts cannot modify awards, due to the narrowly
defined scope of Section 34. Therefore, divergent and contrasting judicial opinions exist
on this question.
4 . Annexure A to this judgment reproduces Section 34, and other pertinent provisions
of the 1996 Act - namely Sections 5, 31, 33, 37, 43 and 48. Annexure B provides a
compilation of prevailing stances adopted by foreign jurisdictions vis-a-vis the question
of modification.
5. Before addressing the arguments raised, it would be useful to capture the divergence
of judicial opinions on the question of modification. These conflicting judgments
provide context to the legal controversy and the arguments presented.
A. JUDICIAL DIVERGENCE ON MODIFICATION POWERS
6 . In McDermott International Inc. v. Burn Standard Co. Ltd. and Ors.
MANU/SC/8177/2006 : (2006) 11 SCC 181 this Court explained the difference between
judicial interference permitted by the 1996 Act vis-a-vis the Arbitration and Conciliation
Act, 19402. The 1996 Act limits the supervisory role of the court to specific grounds
Under Section 34, while the 1940 Act gave courts broader powers Under Sections 30
and 33. The Court clarified that Under Section 34, the court does not act as an appellate
authority for factual findings, evidence, or questions of law dealt with by the arbitral

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tribunal. At the same time, the 1996 Act mandates that arbitrators issue a reasoned
award, which was not a requirement under the 1940 Act.
7 . Further, the judgment clarifies the role of arbitrators in determining claims and
counterclaims. The court cannot correct the arbitrator's mistakes, whether factual or
legal. Rather, its role is confined to setting aside the award, leaving the parties the
option to initiate fresh arbitration proceedings if they wish. However, when it came to
the rate of interest, the Court invoked its power Under Article 142 of the Constitution3
to vary the award, reducing the interest from 10% per annum (as awarded by the
tribunal) to 7.5% per annum. It felt compelled to do so as there was a significant lapse
of time. Two earlier decisions were relied upon: Pure Helium India (P) Limited v. Oil &
Natural Gas Commission, MANU/SC/0803/2003 : (2003) 8 SCC 593 where the rate of
interest was reduced from 18% per annum to 6% per annum, and Mukand Ltd. v.
Hindustan Petroleum Corpn. Ltd., MANU/SC/8103/2006 : (2006) 9 SCC 383 where the
interest rate was lowered from 11% per annum to 7.5% per annum.
8 . In Vedanta Limited v. Shenzhen Shandong Nuclear Power Construction Company
Limited, MANU/SC/1159/2018 : (2019) 11 SCC 465 this Court, in the context of an
international award, highlighted the need to consider the differing impact of interest
rates when the parties operate in different currencies. The rate of interest had to be
aligned with the applicable currency of each party. Accordingly, the Court held that
applying a uniform interest rate for both the INR and Euro components was not
justified. While maintaining the interest rate at 9% per annum for the INR component,
the interest on the Euro component was modified to the London Interbank Offered Rate
(LIBOR) rate plus 3 percentage points. Furthermore, the Court deleted the interest rate
of 15% per annum, which was applicable if the awarded sum was not paid within 120
days. Significantly, this judgment did not reference the Court's power Under Article 142
of the Constitution.
9 . In Oil and Natural Gas Corporation Limited v. Western GECO International Limited,
MANU/SC/0772/2014 : (2014) 9 SCC 263 a three Judge Bench of this Court observed
that when an arbitral tribunal, upon considering the facts presented before it, fails to
draw an inference that ought to have been drawn or, conversely, draws an inference
that is manifestly untenable, resulting in a gross miscarriage of justice, such an award
becomes amenable to challenge. In such circumstances, the award may be set aside or
modified, depending on whether the offending part of the award is severable or not.
10. Earlier, a two-Judges Bench of this Court in Numaligarh Refinery Ltd. v. Daelim
Industrial Co. Ltd., MANU/SC/3629/2007 : (2007) 8 SCC 466 held that courts should
ordinarily refrain from substituting their interpretation for that of the arbitrator.
However, where the parties, with full knowledge, have consented to refer the matter to
arbitration, the court may intervene and modify the award when it is demonstrably and
reasonably justified. For example, when an arbitrator acts without jurisdiction or adopts
an interpretation that is contrary to established law, the court has the authority to
interfere and set the matter right.
11. In an earlier decision of this Court in Tata Hydro-Electric Power Supply Co. Ltd. and
Ors. v. Union of India, MANU/SC/0095/2003 : (2003) 4 SCC 172 this Court exercised its
power to modify the effective date from which the awarded interest would apply.
However, similar to Numaligarh Refinery Ltd. (supra), this decision did not specifically
address the restricted grounds of Section 34.
1 2 . In a catena of judgments of this Court, it has been consistently held that the

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arbitral tribunal is the master of evidence. The scope of judicial intervention Under
Section 34 is confined to the limited grounds expressly provided therein.4 The Court
does not possess the power to correct errors of fact, reconsider costs, or engage in a
review of the merits of the arbitral award.
13. In Ssangyong Engineering and Construction Company Limited v. National Highways
Authority of India (NHAI), MANU/SC/0705/2019 : (2019) 15 SCC 131 a two-judge
bench of this Court ruled that interference based on public policy violations Under
Section 34(2)(b)(ii) is limited to the fundamental policy of Indian law. The court cannot
interfere merely because the arbitrator lacked a "judicial approach".5 Albeit in the said
case, an issue arose which went beyond the narrow scope of Section 34. The
fundamental principle of justice was stated to be violated due to a unilateral change or
addition to the contract by the arbitral tribunal. The Court emphasized that such
changes, made without the affected party's consent, cannot be allowed. As a result, the
majority award was set aside, along with the judgments of the Single Judge and the
Division Bench of the High Court that had upheld the award. To ensure full justice, this
Court, using its power Under Article 142 of the Constitution, upheld the minority award
and the interest it stipulated.
1 4 . In Oriental Structural Engineers Private Limited v. State of Kerala,
MANU/SC/0299/2021 : (2021) 6 SCC 150 this Court upheld the award for being in
consonance with the contract but intervened to modify the interest rate. It was observed
that the principles laid down in Secretary, Irrigation Department, Government of Orissa
and Ors. v. G.C. Roy, MANU/SC/0142/1992 : (1992) 1 SCC 508 for determining the
interest rate would be equally applicable to the 1996 Act. In fact, Section 31(7)(a) of
the 1996 Act, incorporates this principle. Simple interest at the rate of 8% per annum
was directed to be paid on the sum left unpaid.
1 5 . In Project Director, National Highways No. 45 E and 220 National Highways
Authority of India v. M. Hakeem and Anr., MANU/SC/0461/2021 : (2021) 9 SCC 1 a
two-judge bench of this Court held that Section 34 allows arbitral awards to be set
aside only on the limited grounds specified in Sub-sections (2) and (3). When a right is
limited, its enforceability is coterminous with its limited nature, i.e., it can only be
enforced in line with those limitations. As a result, the award can either be set aside or
remanded to the arbitral tribunal. Section 34(4) facilitates such remand by allowing the
court to adjourn the proceedings, and hence providing the arbitral tribunal a chance to
eliminate the grounds for setting it aside. Here again, the tribunal's opinion is key in
determining whether the grounds for setting aside have been resolved.
16. The Court also noted that Section 34 is modelled on the UNCITRAL Model Law on
International Commercial Arbitration, 1985,6 which does not allow courts to modify
awards. Unlike the broader powers available under the 1940 Act, the court's powers
under the 1996 Act are narrower. The Court cited previous judgments of this Court and
various High Courts, emphasizing that allowing modification Under Section 34 would go
against the legal framework, as only the legislature has the power to change the law.
Any expansion of Section 34's powers to include modification would require a
legislative amendment.
B. ARGUMENTS RAISED
I. In Favour of Modification
1 7 . First, it is contended that the judgment in M. Hakeem (supra) warrants
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reconsideration, as it conflicts with several decisions rendered by Benches of two and
three Judges of this Court, in which awards were modified and varied. This Court has
also upheld the modification of awards by the High Courts or District Courts on other
occasions. Second, it is claimed that the Model Law, based on the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 19587,
permits a broader scope of judicial intervention. Several signatory countries to the
Model Law have enacted provisions for domestic awards that permit modification and/or
variation (Annexure B), in addition to allowing for the setting aside of awards. This
international perspective, it is argued, reflects a broader understanding of the court's
powers in arbitrations. Lastly, the principle that a greater power includes a lesser power
is invoked. Since Section 34 allows for the setting aside of an award, it is argued that
this power inherently includes the ability to modify the award, as modification is seen
as a lesser form of intervention than annulment.
18. Reference is made to Ahmedabad St. Xavier College Society and Anr. v. State of
Gujarat and Anr., MANU/SC/0088/1974 : (1974) 1 SCC 717 where a nine-Judge Bench
of this Court applied the maxim "omne majus continent in se minus" - the greater
contains the lesser. Applying this maxim, it is contended that the power to set aside will
include power to modify or partially set aside an award. It is also submitted that the
power to modify and set aside an award can be exercised when the award is in conflict
with public policy in terms of Section 34(2)(b)(ii) or to the extent it is vitiated by patent
illegality in terms of Section 34(2A) of the 1996 Act. This approach aligns with the
jurisprudence of other jurisdictions such as the United Kingdom, Australia, Singapore,
and other countries (Annexure B), where similar powers are vested in the courts.
19. Three additional and ancillary arguments were raised. The first argument was that
the expression, 'recourse', used in Section 34, is broad in scope, and it can include any
action to enforce a right. Thus, the recourse to set aside an award includes within its
ambit the recourse to modify or vary it. The second argument relates to the public law
aspect of land acquisition under the National Highways Act, 19568. As this Act mandates
arbitration on public law issues, it is contended that commercial considerations can
neither be factored in nor applied. Further, the court, while examining a petition Under
Section 34, has the power to enhance compensation for acquired land. Lastly, it was
contended that the power to grant, reduce, or increase interest should be read into
Section 34, without requiring the parties to go through a fresh arbitration process. The
granting of interest does not necessitate an elaborate inquiry that would justify the need
for re-arbitration.
II. Against Modification
2 0 . The learned Counsel opposing the court's power of modification argue that the
Model Law was the result of a collective effort by several countries to establish a
uniform and cohesive legal framework. During discussions, it was decided that courts
should not have the power to modify awards. If courts had such power, it could result
in a situation where a court order or decree replaces the arbitral award, which in
arbitration jurisprudence is unacceptable. It may carry international repercussions when
awards are sought to be enforced under foreign conventions.
21. For example, under the New York Convention, only arbitral awards are recognized
and enforceable, not court decrees/orders that modify those awards. A court decree
cannot substitute an arbitral award, especially when the award is examined under the
limited jurisdiction of Section 34. Section 36 treats awards as enforceable in the same
way as court decrees. However, unless Indian law legislatively empowers courts to
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modify awards, this power cannot be assumed from the power to set aside an award
Under Section 34. While some countries have granted courts the specific power to
modify or vary an award under their domestic laws, Indian law does not permit the
same.
22. It is further submitted that the maxim omne majus continent in se minus - the
greater contains the lesser - should not be applied in the present case. The power to set
aside an award is a sui generis power, which is intrinsically different from the
modification power. Further, when an award is set aside, it results in the annulment of
the award. Annulment means that the award no longer exists. Something that does not
exist cannot be modified or altered. Similarly, it is submitted that the arbitral tribunal
after rendering an award, becomes functus officio. Thus, the exercise of any
modification, would lead to the courts adopting appellate powers. Without appellate
powers, which the court does not possess, an award cannot be modified. Therefore,
assuming modification powers would be contrary to both the express language and the
intent behind Section 34 of the 1996 Act.
2 3 . Lastly, it is submitted that the doctrine of merger does not apply to court
modifications of an arbitral award. The nature and scope of the power of a court, being
distinct from an arbitral tribunal, the modifications will not merge with the arbitral
award. In simpler words, any modification or variation made by the court to the arbitral
award would not be subsumed into the arbitral award. For instance, if the court
modifies the rate of interest decided by a tribunal, the original award will not be
deemed to have been amended to reflect this new interest rate. This could cause issues
at the enforcement stage, as the New York Convention allows only the enforcement of
an arbitral award, not a court's judgment/order.
C. ANALYSIS
2 4 . Given this background, we have to determine whether, and under what
circumstances, the courts have the power to modify or vary arbitral awards.
2 5 . We recognize that the legal controversy carries significant implications. The
arguments canvassed symbolize the longstanding conflict between equity and justice,
on the one hand, and the fetters imposed by the court's jurisdictional limits, on the
other. Therefore, in addressing the questions referred, it is crucial to adopt a balanced
approach. While we may favour an equitable and pragmatic view, our interpretation
must not be at odds with the express or implied legislative intent underlying the 1996
Act. The question therefore is - to what extent can we weave the principles of equity
and justice while not offending the jurisdictional fabric of Section 34?
2 6 . We begin by examining the scope and ambit of the power of 'recourse' Under
Section 34 of the 1996 Act.
I. Contours of Section 34, 1996 Act
27. Section 5 of the 1996 Act limits judicial intervention in an arbitral award to what is
authorized by Part I of the Act. Section 34(1) stipulates that 'recourse' to a court against
an arbitral award may be made only by an application for setting aside the award in
accordance with Section 34(2) and 34(3).
28. Section 34(2)(a) enumerates specific grounds on which an award can be set aside.
These include - the incapacity of a party, invalidity of an arbitration agreement in law,
improper notice for appointment of an arbitrator or arbitral proceedings, denying the
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opportunity to a party to present their case, the award being beyond the scope of
submission to arbitration, and the composition of the arbitral tribunal or the arbitral
procedure not being by the agreement of the parties in certain circumstances. The
proviso to Section 34(2)(a)(iv) outlines the concept of "severability of awards". This
has been addressed separately in Part II of our Analysis.
2 9 . Section 34(2)(b) stipulates that an arbitral award may be set aside when the
subject matter of the dispute cannot be settled by arbitration per the applicable law or if
the arbitral award conflicts with the public policy of India. Explanation I clarifies that an
award can conflict with public policy of India only if (i) the award is induced or affected
by fraud, corruption or is in violation of Section 759 or Section 8110 of the 1996 Act;
(ii) when it is in contravention with the fundamental policy of Indian law;11 or (iii)
when it conflicts with the most basic notions of morality or justice. Explanation 2
mandates that no review on the merits shall be undertaken when determining a
contravention of the fundamental policy of Indian law.
30. Section 34(2-A) stipulates that an award may be set aside when it is vitiated by
patent illegality appearing on the face of the award. The proviso clarifies that such
determination shall not be made solely because there is an erroneous application of law
or through reappreciation of evidence. Section 34(3) provides timelines which needs to
be adhered to while filing an application Under Section 34. Section 34(4) stipulates the
court's power of remanding an award to the arbitral tribunal. We have addressed this
remand power in Part VI of our Analysis. Section 34(5) outlines notice requirements,
while Section 34(6) mandates the expeditious disposal of Section 34 applications,
setting a hard outer limit of one year from the date of service of notice on the other
party Under Section 34(5).
31. The next question that arises is whether the power to set aside an award includes
the power to partially set it aside.
II. Severability of Awards
3 2 . In the present controversy, the proviso to Section 34(2)(a)(iv) is particularly
relevant. It states that if the decisions on matters submitted to arbitration can be
separated from those not submitted, only that part of the arbitral award which contains
decisions on matters non-submitted may be set aside. The proviso, therefore, permits
courts to sever the non-arbitrable portions of an award from arbitrable ones. This
serves a two-fold purpose. First, it aligns with Section 16 of the 1996 Act, which affirms
the principle of kompetenz- kompetenz - that is, the arbitrators' competence to
determine their own jurisdiction. Secondly, it enables the court to sever and preserve
the "valid" part(s) of the award while setting aside the "invalid" ones.12 Indeed, before
us, none of the parties have argued that the court is not empowered to undertake such
a segregation.
3 3 . We hold that the power conferred under the proviso to Section 34(2)(a)(iv) is
clarificatory in nature. The authority to sever the "invalid" portion of an arbitral award
from the "valid" portion, while remaining within the narrow confines of Section 34, is
inherent in the court's jurisdiction when setting aside an award.
34. To this extent, the doctrine of omne majus continet in se minus-the greater power
includes the lesser-applies squarely. The authority to set aside an arbitral award
necessarily encompasses the power to set it aside in part, rather than in its entirety.
This interpretation is practical and pragmatic. It would be incongruous to hold that
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power to set aside would only mean power to set aside the award in its entirety and not
in part. A contrary interpretation would not only be inconsistent with the statutory
framework but may also result in valid determinations being unnecessarily nullified.
35. However, we must add a caveat that not all awards can be severed or segregated
into separate silos. Partial setting aside may not be feasible when the "valid" and
"invalid" portions are legally and practically inseparable. In simpler words, the "valid"
and "invalid" portions must not be inter-dependent or intrinsically intertwined. If they
are, the award cannot be set aside in part.
3 6 . The Privy Council, in Pratap Chamaria v. Durga Prasad Chamaria,
MANU/PR/0068/1925 : AIR 1925 PC 293 addressed this issue with the following
pertinent observations:
...If, however, the pronouncement of the arbitrators is such that matters beyond
the scope of the suit are inextricably bound up with matters falling within the
purview of the litigation, in that case, the court would be unable to give effect
to the award because of the difficulty that it cannot determine to what extent
the decision of the subject-matter of the litigation has been affected and
coloured by the decision of the arbitrators in regard to matters beyond the
ambit of the suit....
Thus, the power of partial setting aside should be exercised only when the valid and
invalid parts of the award can be clearly segregated-particularly in relation to liability
and quantum and without any corelation between valid and invalid parts.
3 7 . We would now proceed to examine, the permissibility and scope of the court's
modification powers, within the parameters of Section 34 of the 1996 Act. In doing so,
we will distinguish the court's power of modification from: (i) the court's power of
setting aside an award; (ii) the arbitrator's power Under Section 33 to correct,
reinterpret, and/or issue an additional award; and (iii) the power of the court to remand
the award to the arbitrator Under Section 34(4).
III. Difference between setting aside and modification
3 8 . This distinction lies at the heart of many arguments canvassed before us. The
parties opposing the recognition a power of modification of the courts have strenuously
contended that modification and setting aside are distinct and sui generis powers. While
modification involves altering specific parts of an award, setting aside does not alter the
award but results in its annulment. Their primary concern is that recognizing a power of
modification may invite judicial interference with the merits of the dispute-something
arguably inconsistent with the framework of the 1996 Act.
3 9 . We agree with this argument, but only to a limited extent. It is true that
modification and setting aside have different consequences: the former alters the
award, while the latter annuls it.13 However, we do not concur with the view that
recognizing any modification power will inevitably lead to an examination of the merits
of the dispute. It will completely depend on the extent of the modification powers
recognised by us. In the following part of our Analysis, we outline the contours of this
limited power and explain why, in our view, recognizing it will ultimately yield more
just outcomes.
IV. A Limited Power of Modification Can Be Located in Section 34

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40. A core principium of arbitration, an Alternative Dispute Resolution14 mechanism, is
to provide a quicker and cost-effective alternative to courtroom litigation. While this
suggests minimal judicial interference, the role of domestic courts remains crucial, as
they function in a supportive capacity to facilitate and expedite the resolution of
disputes. Therefore, it follows that judicial intervention is legitimate and necessary
when it furthers the ends of justice, including the resolution of disputes.
41. To deny courts the authority to modify an award-particularly when such a denial
would impose significant hardships, escalate costs, and lead to unnecessary delays-
would defeat the raison d'etre of arbitration. This concern is particularly pronounced in
India, where applications Under Section 34 and appeals Under Section 37 often take
years to resolve.
42. Given this background, if we were to decide that courts can only set aside and not
modify awards, then the parties would be compelled to undergo an extra round of
arbitration, adding to the previous four stages: the initial arbitration, Section 34
(setting aside proceedings), Section 37 (appeal proceedings), and Article 136 (SLP
proceedings). In effect, this interpretation would force the parties into a new arbitration
process merely to affirm a decision that could easily be arrived at by the court. This
would render the arbitration process more cumbersome than even traditional litigation.
43. Equally, Section 34 limits recourse to courts to an application for setting aside the
award. However, Section 34 does not restrict the range of reliefs that the court can
grant, while remaining within the contours of the statute. A different relief can be
fashioned as long as it does not violate the guardrails of the power provided Under
Section 34. In other words, the power cannot contradict the essence or language of
Section 34. The court would not exercise appellate power, as envisaged by Order XLI of
the Code of Civil Procedure, 190815.
44. We are of the opinion that modification represents a more limited, nuanced power
in comparison to the annulment of an award, as the latter entails a more severe
consequence of the award being voided in toto. Read in this manner, the limited and
restricted power of severing an award implies a power of the court to vary or modify the
award. It will be wrong to argue that silence in the 1996 Act, as projected, should be
read as a complete prohibition.
45. We are thus of the opinion that the Section 34 court can apply the doctrine of
severability and modify a portion of the award while retaining the rest. This is subject
to parts of the award being separable, legally and practically, as stipulated in Part II of
our Analysis.
46. Mustill and Boyd have observed that an order varying an award is not equivalent to
an appellate process.16 The authors suggest that a modification order would only be
appropriate where the modification, including any adjustment of costs, follows
inevitably from the tribunal's determination of a question of law. 17 This approach would
be beneficial, as it would reduce costs and delays. The courts need not engage in any
fact-finding exercise. By acknowledging the Court's power to modify awards, the
judiciary is not rewriting the statute. We hold that the power of judicial review Under
Section 34, and the setting aside of an award, should be read as inherently including a
limited power to modify the award within the confines of Section 34.
V. Court can modify the award despite Sections 33 and 34(4)

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47. Section 33 of the 1996 Act (Annexure A) empowers an arbitrator, upon request, to
correct and/or re-interpret the arbitral award, on limited grounds. This includes the
correction of computational, clerical or typographical errors, as well as giving
interpretation on a specific point or a part of the award, when mutually agreed upon by
the parties. Section 33(3) enables the tribunal to suo moto correct any errors within
thirty days of delivering the award. Section 33(4) grants wider powers. It permits the
arbitral tribunal, upon compliance with specified manner of request, to make an
additional award on claims presented before the arbitral proceedings but omitted from
the arbitral award.
48. Section 33(7) states that Section 31 (Annexure A) shall apply where correction,
interpretation or any addition is made to the arbitral award. Section 31 deals with form
and content requirements for arbitral awards. Consequently, an order passed by the
arbitral tribunal Under Section 33 amounts to an arbitral award. Under Section 34(3),
where a request is made Under Section 33, the limitation period for filing an application
to set aside the award commences from the date on which the arbitral tribunal disposes
of the Section 33 request.
4 9 . Notwithstanding Section 33, we affirm that a court reviewing an award Under
Section 34 possesses the authority to rectify computational, clerical, or typographical
errors, as well as other manifest errors, provided that such modification does not
necessitate a merits-based evaluation. There are certain powers inherent to the court,
even when not explicitly granted by the legislature. The scope of these inherent powers
depends on the nature of the provision, whether it pertains to appellate, reference, or
limited jurisdiction as in the case of Section 34. The powers are intrinsically connected
as they are part and parcel of the jurisdiction exercised by the court.
50. In Grindlays Bank Ltd. v. Central Government Industrial Tribunal and Ors. 1980
Supp SCC 420 this Court has held that every tribunal or court is endowed with certain
ancillary or incidental powers which are necessary to discharge its functions effectively
for the purpose of doing justice between the parties. In that case, the simple question
was whether an ex parte award passed on merits, when sought to be set aside by an
application showing sufficient cause, amounts to seeking a review on merits of the
dispute. The Court held that a procedural review differs from a review on merits of the
dispute. The former is a power inherent in every court or tribunal and inadvertent errors
committed by another tribunal can be corrected by the court/tribunal. This would not
amount to a review on merits. The reasoning distinguishing between procedural and
merits review is reproduced below:
The expression "review" is used in the two distinct senses, namely (1) a
procedural review which is either inherent or implied in a court or Tribunal to
set aside a palpably erroneous order passed under a misapprehension by it, and
(2) a review on merits when the error sought to be corrected is one of law and
is apparent on the face of the record. It is in the latter sense that the court in
Patel Narshi Thakershi case held that no review lies on merits unless a statute
specifically provides for it. Obviously when a review is sought due to a
procedural defect, the inadvertent error committed by the Tribunal must be
corrected ex debito justitiae to prevent the abuse of its process, and such
power inheres in every court or Tribunal.
51. Reference may also be made to the power of recall, which every court possesses, as
recognized by this Court in Budhia Swain and Ors. v. Gopinath Deb and Ors.
MANU/SC/0932/1999 : (1999) 4 SCC 396. The availability of this power enables the

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court to address various situations efficiently, rather than remanding the matter to the
arbitral tribunal Under Section 34(4). Lastly, one may also refer to the power of
granting interim relief if the circumstances so warrant.
52. The doctrine of implied power is to only effectuate and advance the object of the
legislation, i.e., the 1996 Act and to avoid the hardship. It would, therefore, be wrong
to say that the view expressed by us falls foul of express provisions of the 1996 Act.
5 3 . Under Section 152 of the Code,18 a court executing a decree has the power to
correct clerical or arithmetic mistakes in judgments, orders, or decrees arising from any
accidental slips or omissions. This Court, in Century Textiles Industries Limited v.
Deepak Jain and Anr., MANU/SC/0419/2009 : (2009) 5 SCC 634 held that clerical or
arithmetical errors may be corrected by the executing court, however, the court must
take the decree according to its tenor and cannot go behind the decree.
54. In the same vein as these judgments, we hold that inadvertent errors, including
typographical and clerical errors can be modified by the court in an application Under
Section 34. However, such a power must not be conflated with the appellate jurisdiction
of a higher court or the power to review a judgment of a lower court. The key
distinction between Section 33 and Section 34 lies in the fact that, Under Section 34,
the court must have no uncertainty or doubt when modifying an award. If the
modification is debatable or a doubt arises regarding its appropriateness, i.e., if the
error is not apparent on the face of the record, the court will be left unable to proceed,
its hands bound by the uncertainty. In such instances, it would be more appropriate for
the party to seek recourse Under Section 33 before the tribunal or Under Section 34(4).
VI. To Modify or to Remit? Addressing the court's quandary.
55. As elucidated above, if a fog of uncertainty obscures the exercise of modification
powers, the courts must not modify the award. Instead, they should avail their remedial
power and remand the award to the tribunal Under Section 34(4). Under the Sub-
section, either party-whether the one challenging the award Under Section 34 or the
one defending against such a challenge-may request the court to adjourn the
proceedings for a specified period. If the court deems it appropriate, it may grant such
an adjournment, allowing the arbitral tribunal to resume proceedings or take necessary
corrective measures to eliminate the grounds for setting aside the award. Thus, Section
34(4) provides a second opportunity for a party to seek recourse through arbitral
channel.
56. However, the power of remand permits the court only to send the award to the
tribunal for reconsideration of specific aspects. It is not an open-ended process; rather,
it is a limited power, confined to limited circumstances and issues identified by the
court. Upon remand, the arbitral tribunal may proceed in a manner warranted by the
situation - including recording additional evidence, affording a party an opportunity to
present its case if previously denied, or taking any other corrective measures necessary
to cure the defect. In contrast, the exercise of modification powers does not allow for
such flexibility. Courts must act with certainty when modifying an award - like a
sculptor working with a chisel, needing precision and exactitude. Therefore, the
argument that remand powers make modification unnecessary is misconceived. They are
distinct powers and are to be exercised differently.
5 7 . Section 34(4), derived from the Model Law, is discretionary in nature. This is
evident from the use of the word "may" in the provision. The Court may invoke this

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power when it identifies a defect in the award that could lead to its setting aside. In
such cases, the court may seek to prevent this outcome by granting the arbitral tribunal
an opportunity to rectify the defect.
58. While it is not appropriate to establish rigid parameters or a straitjacket formula for
the exercise of this power, it is clear that Section 34(4) does not authorize the arbitral
tribunal to rewrite the award on merits or to set it aside. Rather, it serves as a curative
mechanism available to the tribunal when permitted by the court. The primary objective
is to preserve the award if the identified defect can be cured, thereby avoiding the need
to set aside the award. Accordingly, a court may not grant a remand when the defect in
the award is inherently irreparable. A key consideration is the proportionality between
the harm caused by the defect and the means available to remedy it.
59. While exercising this power, the court must also remain mindful that the arbitral
tribunal has already rendered its decision. If the award suffers from serious acts of
omission, commission, substantial injustice, or patent illegality, the same may not be
remedied through an order of remand. Clearly, there cannot be a lack of confidence in
the tribunals' ability to come to a fair and balanced decision when an order of remit is
passed.
60. Thus, an order of remand should not be passed when such order would place the
arbitral tribunal in an invidious or embarrassing position. Additionally, remand may be
inappropriate when it does not serve the interests of the parties, particularly in time-
sensitive matters or where it would lead to undue costs and inefficiencies. Once an
order of remand is granted, the arbitral tribunal has the authority to vary, correct,
review, add to, or modify the award. Notably, Under Section 34(4), the tribunal's
powers, though confined, remain nonetheless substantial. This stands in contrast to the
court's narrow role under the rest of Section 34.
6 1 . This Court, in Kinnari Mullick and Anr. v. Ghanshyam Das Damani,
MANU/SC/0514/2017 : (2018) 11 SCC 328 referred to and laid down the preconditions
for exercising the power of remand Under Section 34(4). It held that the court cannot
exercise the power of remand suo motu in the absence of a written request by one of
the parties. Secondly, once an application Under Section 34(1) has been decided and
the award set aside, the court becomes functus officio and cannot thereafter remand the
matter to the arbitral tribunal. Consequently, the power Under Section 34(4) cannot be
invoked after the court has disposed of the Section 34(1) application.
62. We are unable to accept the view taken in Kinnari Mullick (supra), which insists that
an application or request Under Section 34(4) must be made by a party in writing. The
request may be oral. Nevertheless, there should be a request which is recorded by the
court. We are also unable to agree that the request must be exercised before the
application Under Section 34(1) is decided. Section 37 (Annexure A) permits an appeal
against any order setting aside or refusing to set aside an arbitral award Under Section
34. To this extent, the appellate jurisdiction Under Section 37 is coterminous with, and
as broad as, the jurisdiction of the court deciding objections Under Section 34. Hence,
the contention that the tribunal becomes functus officio after the award is set aside is
misplaced. The Section 37 court still possesses the power of remand stipulated in
Section 34(4). Of course, the appellate court, while exercising power Under Section 37,
should be mindful when the award has been upheld by the Section 34 court. But the
Section 37 court still possesses the jurisdiction to remand the matter to the arbitral
tribunal.

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63. Our reasoning does not breach the principle of party autonomy. 19 Neither does it
confer appellate powers on the courts. Instead, it adheres strictly to the parameters
stipulated in Sections 34 and 37 of the 1996 Act. The power of the appellate court in
civil proceedings Under Order XLI of the Code, is as broad as that of a trial court, both
in terms of facts and law. Contrastingly, the court's authority Under Sections 34 and 37
of the 1996 Act is limited by the silhouette of Section 34.
6 4 . In Dyna Technologies Private Limited v. Crompton Greaves Limited,
MANU/SC/1765/2019 : (2019) 20 SCC 1 this Court emphasized that the issuance of a
reasoned award is not a mere formality under the 1996 Act. For an award to be termed
"reasoned", it must meet three essential yardsticks: it must be proper, intelligible, and
adequate. The purpose behind Section 34(4) is clear: it allows for an award to become
enforceable after granting the tribunal an opportunity to cure any defects. This power is
exercisable when the arbitral tribunal has failed to give any reasoning or the award
exhibits gaps in reasoning and these defects can be cured, thereby preventing
unnecessary challenges. The underlying intent is to provide an effective, expeditious
forum for addressing curable defects, which Section 34(4) facilitates.
6 5 . In I-Pay Clearing Services Private Limited v. ICICI Bank Limited,
MANU/SC/0005/2022 : (2022) 3 SCC 121 this Court clarified that Section 34(4) does
not grant the authority to review or reconsider previous findings or conclusions. As
discussed earlier in this judgment, the scope of the power Under Section 34(4) is not to
be restricted to a rigid, straitjacket formula. Rather, it depends on the specific facts and
circumstances of each case. Being a discretionary power, it is to be exercised by the
Court judiciously, keeping in mind the grounds raised in the application Under Section
34(1). The Court should be prima facie satisfied that the wrong and illegality in the
award are curable. While doing so, the Court need not record the final finding on the
contentious issue at hand; however, not every request for such relief is warranted. The
discretion must be exercised with caution, and only when it is evident that an
adjournment will allow the arbitral tribunal to resolve the issues and remove the
grounds for setting aside the award. However, Section 34(4) is an enabling provision-it
does not compel the tribunal to take corrective action, leaving it free to either amend or
refuse to amend the award.
VII. Doctrine of Merger and the New York Convention
66. The reliance placed on doctrine of merger, coupled with the argument that court
orders partially setting aside or modifying an award would render the amended award
unenforceable under the New York Convention, is unfounded and must be rejected as
misconceived. We are of the view that, once Section 34 is reinterpreted to include a
limited power to modify awards, this authority will not affect the international
commercial arbitration regime or the enforcement of foreign awards.
67. Section 48 of the 1996 Act (Annexure A), which is similarly worded as Article v. of
the New York Convention, delineates situations when the enforcement of a foreign
award may be refused. Section 48(1)(e) states the award may not be enforced when it
has not become binding on the parties or has been set aside or suspended by a
competent authority of the country in which, or under the law of which, that award was
made. In simpler words, the award must become "binding on the parties" in terms of
the law of the seat before enforcement. Sub-clause (e) therefore recognizes that, for
enforcement, the domestic law of the country where the award is made shall prevail and
have supremacy. Thus, this Court's interpretation, reading modification powers into
Section 34, would not be at loggerheads with the New York Convention. The Convention
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requires the enforcement court to consider whether an award has become binding in
terms of the law of the seat.
6 8 . In any case, the New York Convention, as explained by this Court in Brace
Transport Corporation of Monrovia, Bermuda v. Orient Middle East Lines Limited, Saudi
Arabia and Ors. 1995 Supp (2) SCC 280 speaks of "recognition and enforcement" of an
award. An award may be recognized without being enforced; but if it is enforced, then it
is necessarily recognized. Recognition may act as a shield against re-agitation of issues
which the award deals with. A party successful in arbitration, may seek and rely upon
recognition, if proceedings are brought against him on issues already dealt with by an
award. A defensive shield is then erected on the award.
69. Based on the above discussion, the argument that several countries like Singapore,
Kenya, and the United Kingdom (Annexure B) - though originally following the Model
Law - now allow courts to modify an award in limited cases, while the 1996 Act does
not, is only linguistically correct. However, it is not convincing jurisprudentially or in
principle. The limited power Under Section 34 allows the court to vary or modify the
award. The effect thereof is that the award would be read as modified by the
judgment/order.
VIII. NHAI Act - Expansive Modification of Arbitral Awards is Impermissible
7 0 . It has been argued that Section 34 should be expansively interpreted to permit
modification of awards under the NHAI Act. In particular, it is suggested that courts
should be allowed to modify the quantum of compensation awarded, as the Act involves
statutory arbitration. This argument is, however, untenable. The jurisdiction conferred
Under Section 34 does not distinguish between statutory and non-statutory arbitration
in terms of the scope of courts' power of review. Hence, this argument stands rejected.
71. We refrain from expressing any opinion on the validity of the provisions under the
NHAI Act, which is presently under judicial consideration in a separate writ petition.
Neither do we adjudicate upon whether or in what manner awards issued by statutory
authorities may be challenged.
IX. Post-Award Interest
72. The next question that arises is: do courts possess the power to declare or modify
interest, especially post award interest? In respect of pendente lite interest, Section
31(7)(a) (Annexure A), states that unless otherwise agreed by the parties, the arbitral
tribunal may include in its sum for the award, interest, at such rate it deems reasonable
on whole or part of the money for whole or part of the period on which the cause of
action arose and the date on which the award is made. In respect of post-award
interest, Section 31(7)(b) (Annexure A) states that unless an award provides for interest
on a sum directed to be paid by it, the sum will carry an interest at a 2% higher rate
than the current rate of interest prevalent on the date of the award, from the date of the
award till the date of payment. The explanation defines the expression 'current rate of
interest'.
7 3 . There can be instances of violation of Section 31(7)(a), and the pendente lite
interest awarded may be contrary to the contractual provision. We are of the opinion
that, in such cases, the court while examining objections Under Section 34 of the 1996
Act will have two options. First is to set aside the rate of interest or second, recourse
may be had to the powers of remand Under Section 34(4).

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74. For the post award interest in terms of Section 31(7)(b), the courts will retain the
power to modify the interest where the facts justify such modification. This is why the
standard rate stipulated in Clause (b) applies when the award itself does not specify the
applicable post award interest. There can be a situation where the party to be paid
money is at fault and is guilty of delay which may require a modification in the rate of
interest. In the absence of grant of post award interest in the award, the court also
possesses the power to grant post award interest. Clearly, as per the legislative
mandate, it is not the sole prerogative of the arbitrator.
75. Compare Section 31 of the 1996 Act with Section 31 of the Model Law. While both
Sections are titled similarly - "Form and Contents of Award" - only the 1996 Act
addresses interest in Section 31(7). The Model Law does not provide standards
governing the determination of interest rates. Thus, Section 31(7) is a unique creation
of the Indian legislature. It was not borrowed from the Model Law. Specifically, Under
Section 31(7)(b), the legislature has established a standard rate of interest to guide the
arbitrator's discretion when it comes to determining the post-award interest rate. While
the arbitrator retains his flexibility based on facts and circumstances of the case, the
standard set by the legislature must weigh in on their consideration. Further, as there is
a standard prescribed by the legislature, the post-award interest awarded can be
scrutinized by courts against the standards prescribed.
7 6 . Our reasoning is bolstered when considering the practical aspects. Arbitral
tribunals, when determining post-award interest, cannot foresee future issues that may
arise. Post award interest is inherently future-oriented and depends on facts and
circumstances that unfold after the award is issued. Since the future is unpredictable
and unknown to the arbitrator at the time of the award, it would be unreasonable to
suggest that the arbitrator, as a soothsayer, could have anticipated or predicted future
events with certainty. Therefore, it is appropriate for the Section 34 court to have the
authority to intervene and modify the post-award interest if the facts and circumstances
justify such a change.
77. Inherent in the discussion above, is the court's power to both increase or decrease
the post-award interest rate. It would be incorrect to state that the court's power to
interfere with this interest rate is limited solely to decreasing the interest rate.
Situations may arise where the rate should be increased due to delays or obstructions in
the execution of the award. Interest rates may also fluctuate over time.
78. However, the court, while exercising this power, must be cautious and mindful not
to overstep its role by altering the interest rate unless there are compelling and well-
founded reasons to do so. In exercising this power, the court is not acting in an
appellate capacity, but rather under limited authority. For instance, the 1996 Act
stipulates a standard post-award interest rate. When the statute itself benchmarks a
standard, unless there are special and specific reasons, the rate of interest stipulated by
the statute should be applied.
79. Nevertheless, this limited power is significant, as it can help avoid further rounds of
litigation. Without it, the court may be forced to set aside the entire award or order a
fresh round of arbitration because of an erroneous interest rate rather than simply
adjusting this rate.
X. Post-Award Settlements
80. We are also of the opinion that the parties are entitled to enter into an agreement
or settlement even after an award is pronounced. Such a settlement should be in
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accordance with the provisions of Order XXIII of the Code. The law of the land does not
bar the parties from entering into a post award or post decree settlement. The only legal
requirement is that such settlement must be verifiable and in accordance with law i.e.,
the settlement is not a result of undue influence, force, fraud, coercion, etc.
XI. Limitation Period - Section 34
81. This brings us to Section 43(4) (Annexure A) of the 1996 Act. It clarifies the legal
position re limitation and setting aside. For context, once an award is set aside, it
becomes null and void, but the original dispute may still require resolution. The 1996
Act, vide Section 43(4), enables the parties to initiate fresh arbitration or court
proceedings in relation to the dispute. However, the question that arises is: how do we
calculate the limitation period within which the fresh arbitration or court proceedings
are to be commenced? Section 43(4) stipulates that the period between the
commencement of arbitration and the Court's order setting aside the award is excluded
for the purposes of calculating the limitation period under the Limitation Act, 1963. In
essence, the time during which the award is in force is not counted. We are also
cognizant that there could be a situation that, on setting aside of the award, the entire
dispute gets resolved and decided. However, we need not go into this question. What is
relevant is that Section 43(4) provides liberty for the parties to invoke either arbitration
or court proceedings, as applicable, following the annulment of the award.
XII. Supreme Court's Power to Do Complete Justice
82. As far as the applicability of Article 142 of the Constitution is concerned, this power
is to be exercised by this Court with great care and caution. Article 142 enables the
Court to do complete justice in any cause or matter pending before it. The exercise of
this power has to be in consonance with the fundamental principles and objectives
behind the 1996 Act and not in derogation or in suppression thereof.
83. In Shilpa Sailesh v. Varun Sreenivasan, MANU/SC/0502/2023 : (2023) 14 SCC 231
a Constitution Bench of this Court summarized the scope of its power Under Article 142
of the Constitution as follows:
19. Given the aforesaid background and judgments of this Court, the plenary
and conscientious power conferred on this Court Under Article 142(1) of the
Constitution of India, seemingly unhindered, is tempered or bounded by
restraint, which must be exercised based on fundamental considerations of
general and specific public policy. Fundamental general conditions of public
policy refer to the fundamental rights, secularism, federalism, and other basic
features of the Constitution of India. Specific public policy should be
understood as some express pre-eminent prohibition in any substantive law,
and not stipulations and requirements to a particular statutory scheme. It
should not contravene a fundamental and non-derogable principle at the core of
the statute. Even in the strictest sense, it was never doubted or debated that
this Court is empowered Under Article 142(1) of the Constitution of India to do
"complete justice" without being bound by the relevant provisions of procedure,
if it is satisfied that the departure from the said procedure is necessary to do
"complete justice" between the parties.
8 4 . While exercising power Under Article 142, this Court must be conscious of the
aforesaid dictum. In our opinion, the power should not be exercised where the effect of
the order passed by the court would be to rewrite the award or modify the award on
merits. However, the power can be exercised where it is required and necessary to bring
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the litigation or dispute to an end. Not only would this end protracted litigation, but it
would also save parties' money and time.
CONCLUSIONS
8 5 . Accordingly, the questions of law referred to by Gayatri Balasamy (supra) are
answered by stating that the Court has a limited power Under Sections 34 and 37 of the
1996 Act to modify the arbitral award. This limited power may be exercised under the
following circumstances:
I. when the award is severable, by severing the "invalid" portion from the
"valid" portion of the award, as held in Part II of our Analysis.
II. by correcting any clerical, computational or typographical errors which
appear erroneous on the face of the record, as held in Part IV and v. of our
Analysis;
III. post award interest may be modified in some circumstances as held in Part
IX of our Analysis; and/or
IV. Article 142 of the Constitution applies, albeit, the power must be exercised
with great care and caution and within the limits of the constitutional power as
outlined in Part XII of our Analysis.

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K.V. Viswanathan, J.
A. HOLDING IN PROJECT DIRECTOR, NHAI v. M. HAKEEM AND ANR

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B. ORDER OF REFERENCE
C. CONTENTION OF LEARNED COUNSELS
i. CONCEPTUAL DISTINCTION BETWEEN "MODIFICATION" AND "SEVERANCE"
ii. CONTENTIONS FAVOURING THE POWER TO MODIFY
iii. CONTENTIONS OPPOSING THE POWER TO MODIFY
D. THE ECO SYSTEM OF ARBITRATION
i. HISTORICAL, TEXTUAL AND THE CONTEXTUAL SETTING
ii. SCHEME OF THE A&C ACT, 1996
E. SOME CASES CITED IN THE REFERRAL ORDER
F. ANALYSIS OF THE CONTENTIONS AND REASONING
i. CAN WORDS BE READ INTO SECTION 34?
ii. THE FALLACY IN THE 'HARDSHIP' ARGUMENT
iii. CONTRACTUAL OUSTER OF THE NORMAL JUDICIAL PROCESS
iv. CONTRAST WITH THE APPELLATE POWER UNDER Code of Civil Procedure
v. IS POWER TO 'MODIFY' A LESSER POWER?
vi. LEGAL MAXIMS - TO BE DEPLOYED AFTER ASCERTAINING CONTEXT
vii. THE ARGUMENT ON INHERENT POWERS
viii. DOCTRINE OF IMPLIED POWERS
ix. PARTY AUTONOMY
x. CAN ARTICLE 142 POWERS BE EXERCISED TO MODIFY?
xi. LAYING DOWN GUARDRAILS FOR SECTION 34 - IS IT AN OPTION FOR THIS COURT?
xii. SUBMISSIONS BASED ON PECULIARITIES IN STATUTORY ARBITRATIONS
xiii. COMPLICATIONS DUE TO MODIFICATIONS IN NEW YORK CONVENTION AWARDS
xiv. IS HAKEEM (SUPRA) PER INCURIAM?
xv. POWERS UNDER SECTION 33 AND 34 (4) OF THE A&C ACT - THE 'SAFETY VALVES'
xvi. AWARD OF INTEREST- USE OF SECTION 34(4) POWER
xvii. SUO MOTO EXERCISE OF SECTION 34(4) POWER
xviii. COMPUTATION, CLERICAL AND TYPOGRAPHICAL ERROR OR ANY OTHER ERROR OF
SIMILAR NATURE - ACTUS CURIAE NEMINEM GRAVABIT PRINCIPLE

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xix. SEVERABILITY UNDER SECTION 34
xx. ABANDONMENT OF CLAIMS - COMPROMISE ARRIVED AT BETWEEN THE PARTIES
G. CONCLUSION
H. ANSWERS TO THE REFERENCE
86. Delay in refiling the Special Leave Petition is condoned.
87. Leave granted.
88. This reference to a Bench of five judges is primarily to decide the correctness of the
judgment of this Court in Project Director, National Highways No. 45 E and 220 National
Highways Authority of India v. M. Hakeem and Anr., MANU/SC/0461/2021 : (2021) 9
SCC 1. In the said judgment, this Court held that while exercising powers Under Section
34 of the Arbitration and Conciliation Act, 1996 ('A&C Act' for short), a Court hearing
the petition had no power to "Modify" the Award. A three- Judge Bench of this Court on
20.02.2024, after noticing that there are decisions of this Court which have either
modified the awards of the Arbitral Tribunals or upheld orders challenging modified
awards and after observing that an authoritative pronouncement is required on this
issue, placed the matter before the Hon'ble Chief Justice for constitution of an
appropriate Bench. On 23.01.2025, by an order, this Court directed the matter to be
placed before a Constitution Bench and that is how the matter has presented itself.
THE HOLDING IN HAKEEM (SUPRA):
89. The facts in Hakeem (Supra) were that pursuant to the notifications issued under
the provisions of the National Highways Act, 1956 for acquisition of lands by the
National Highways Authority of India (NHAI), awards came to be passed by the
competent authority under the said Act. A Petition Under Section 34 of the A&C Act
resulted in enhancement of the award by the District Court which was upheld on further
appeal with only a remand to determine compensation for certain trees and crops. The
NHAI challenged the same before this Court and contended that in exercise of powers
Under Section 34, no modification could be made since it was not a challenge on the
merits of the award. The contentions of NHAI were that powers Under Section 34 were
qualitatively different from an appellate power and the only option open was to set
aside the award or remit the award Under Section 34 (4) in the event of the
contingencies provided thereon arising. A contrast was made with the provisions of the
Arbitration Act, 1940 which contained express provisions to modify the award Under
Section 15 therein. NHAI further argued that since the A&C Act was based on the
UNCITRAL Model Law on International Commercial Arbitration, 1985, the grounds of
challenge were restricted. The land losers in Hakeem (Supra) contended that power to
set aside in Section 34 included a "power to modify" and relied on the judgment of the
learned Single Judge of the Madras High Court in Gayatri Balaswamy v. ISG Novasoft
Technologies Limited, 2014 SCC OnLine Mad 6568. [Coincidentally, Gayatri Balaswamy
(supra) is the first case in this reference after travelling through the Division Bench of
the High Court.]
90. This Court in Hakeem (Supra) held as under:
(i) Section 34 of the A&C Act was different from a provision of appeal since the
Section contemplates setting aside awards on very limited grounds provided in
the Sub-sections thereof. (Para 16)

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 (ii) "Recourse" in Section 34 meant enforcement or method of enforcing a right
and where the right itself is truncated, enforcement of such right would also be
only limited in nature. (Para 16)
(iii) That enforcement is truncated was further clear from Section 34(4) which
provides that on receipt of an application Under Section 34(1), the Court may,
where it is appropriate and it is so requested by a party, adjourn for a period of
time the Section 34 proceedings to give the Arbitral Tribunal an opportunity to
resume the Arbitral proceedings or to take such other action as in the opinion
of the Arbitral Tribunal will eliminate the grounds for setting aside the Arbitral
Award. It was the opinion of the Arbitral Tribunal which ultimately counted in
order to eliminate the grounds for setting aside the award, which may be
indicated by the Court. (Para 16)
(iv) That Section 34 was modelled on the UNCITRAL Model Law and no power
to modify was given to the Court. (Para 17)
(v) Eminent authors like Redfern and Hunter have opined that the Reviewing
Court can neither alter the terms of an award nor can it decide the dispute
based on its own vision of the merits. (Para 18)
(vi) Minimal judicial interference is called for in Arbitral Awards under the
UNCITRAL Model Law and unlike the 1940 Act there is no power to modify.
(Para 19 & 20)
(vii) In a challenge Under Section 34, there is no challenge to the merits of the
award as held in a long line of judgments of this Court (Para 23, 24)
(viii) This Court in McDermott International Inc. v. Burn Standard Co. Ltd.,
MANU/SC/8177/2006 : (2006) 11 SCC 181 has held that Court cannot correct
the errors of the Arbitrators and that it can only quash the award leaving the
parties free to begin the arbitration afresh. (Para 25)
(ix) That in England, the United States, Canada, Australia and Singapore there
are express legislative provisions permitting the varying of an Award, unlike
Section 34 of the A&C Act. (Para 43)
ORDER OF REFERENCE: -
91. In the referral order of 20.02.2024, this Court, while framing certain questions for
consideration, observed as under:
2. Whether or not the Courts in exercise of power Under Sections 34 or 37 of
the Arbitration and Conciliation Act, 1996 are empowered to modify an arbitral
award is a question which frequently arises in proceedings not only before this
Court but also before the High Courts and the District Courts. While one line of
decisions of this Court has answered the aforesaid question in the negative,
there are decisions which have either modified the awards of the arbitral
tribunals or upheld orders under challenge modifying the awards. It is,
therefore, of seminal importance that through an authoritative pronouncement
clarity is provided for the guidance of the Courts which are required to exercise
jurisdiction under the aforesaid Sections 34 and 37, as the case may be, day in
and day out.

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 3 . We are of the considered view that the following questions need to be
referred to a larger Bench for answers:
1 . Whether the powers of the Court Under Section 34 and 37 of the
Arbitration and Conciliation Act, 1996, will include the power to modify
an arbitral award?
2 . If the power to modify the award is available, whether such power
can be exercised only where the award is severable and a part thereof
can be modified?
3 . Whether the power to set aside an award Under Section 34 of the
Act, being a larger power, will include the power to modify an arbitral
award and if so, to what extent?
4. Whether the power to modify an award can be read into the power
to set aside an award Under Section 34 of the Act?
5 . Whether the judgment of this Court in Project Director NHAI v. M.
Hakeem MANU/SC/0461/2021 : (2021) 9 SCC 1, followed in Larsen Air
Conditioning and Refrigeration Company v. Union of India, (2023) SCC
OnLine SC 982 and SV Samudram v. State of Karnataka, (2024) SCC
OnLine SC 19 lay down the correct law, as other benches of two Judges
(in Vedanta Limited v. Shenzden Shandong Nuclear Power Construction
Company Limited, MANU/SC/1159/2018 : (2019) 11 SCC 465, Oriental
Structural Engineers Pvt. Ltd. v. State of Kerala, MANU/SC/0299/2021 :
(2021) 6 SCC 150 and M.P. Power Generation Co. Ltd. v. Ansaldo
Energia Spa, MANU/SC/0383/2018 : (2018) 16 SCC 661 and three
Judges (in J.C. Budhraja v. Chairman, Orissa Mining Corporation Ltd.
MANU/SC/0602/2008 : (2008) 2 SCC 444, Tata Hydroelectric Power
Supply Co. Ltd. v. Union of India, MANU/SC/0095/2003 : (2003) 4 SCC
172 and Shakti Nath v. Alpha Tiger Cyprus Investment No. 3 Ltd.,
MANU/SC/0199/2020 : (2020) 11 SCC 685) of this Court have either
modified or accepted modification of the arbitral awards under
consideration?
4 . The special leave petitions may be placed before the Hon'ble the Chief
Justice of India for an appropriate order.
CONTENTIONS OF LEARNED COUNSELS: -
9 2 . Wide ranging arguments have been canvassed to contend that a Court Under
Section 34 of the A&C Act has the power to "modify" the award and equally strong
arguments were canvassed contending for the position that Hakeem (Supra) is correctly
decided and there was no power in the Section 34 Court to modify. The only unanimity
in the submission was with regard to the power Under Section 34 to sever parts of the
award subject to the condition that the Severed part is a standalone part and is not
inseparably intertwined with the other parts of the award.
CONCEPTUAL DISTINCTION BETWEEN "MODIFICATION" AND "SEVERANCE": -
9 3 . This judgment approaches the issue by maintaining the conceptual distinction
between "modification" and "severance". Wherever modification is discussed, it is to
examine whether a Section 34 Court can change, vary or qualify an award. Wherever

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severance is discussed it has to be understood to mean "to separate" and "disjoin".
Parties have also canvassed arguments based on that distinction. While the rival parties
were at daggers drawn on the aspect of the power to "modify" in a Section 34 Court,
there was unanimity on the power to "sever" subject to conditions compatible with
severability.
CONTENTIONS FAVOURING THE POWER TO MODIFY: -
94. Mr. Arvind Datar, learned Senior Counsel made bold to suggest that the Court read
words into Section 34. According to the learned Senior Counsel, the words "and, to the
extent" be read as opening words in Section 34(2) (b) and further that the words "or
modified, and "to the extent" be added in Section 34(2)(a). According to the learned
Senior Counsel, the Court is not powerless to add words and cited a large number of
authorities where, according to the counsel, words have been added to avoid
irreconcilable conflict and in situations where absurdity and injustice had to be averted.
The learned Senior Counsel further contended that Hakeem (supra) is per incuriam as it
is contrary to several three-Judge and two-Judge Bench judgments of this Court.
Learned Senior Counsel further contended that the only option of setting aside the
award will cause enormous hardship to the litigants as that will result in
recommencement of the arbitration proceedings. Learned Senior Counsel further argued
that power to "set aside" the award will include power to modify as the larger power
would include the smaller power. Learned Counsel relied on the legal maxim omne
majus continet in se minus which meant the greater contains the less.
9 5 . Mr. Darius Khambata, learned Senior Counsel contended that certain foreign
jurisdictions have statutorily enabled Courts to modify awards including on a question
of law. Referring to passages from "Mustill & Boyd" on Commercial Arbitration, learned
Senior Counsel contended that it would be unjust for an obviously wrong decision on an
important question of law not to be put right by the Court and any variation which
inevitably flows from the Court's determination of the question of law would be
perfectly justified. Learned Senior Counsel reiterated the submission that power to
modify, if available to the Court, would ensure resolution of dispute in a speedy,
effective, inexpensive and expeditious manner. Learned Senior Counsel referred to the
Expert Committee Report headed by Dr. T.K. Viswanathan to contend that even the
Committee has recommended legislative changes to permit modification of the award.
Learned Senior Counsel contended that none of the provisions in the Act including
Section 34 prohibit Courts from modifying the award and argued that silence in the Act
cannot be read as a prohibition.
96. Learned Senior Counsel canvassed that Courts should have the power to iron out
the creases and supported the submission that the larger power of setting aside ought
to include the limited power to modify when such modification inevitably flows from the
correction of illegality within the confines of Section 34. Illustrative cases where this
Court exercised powers Under Article 142 were referred to.
97. Learned Senior Counsel sought to peg the power to modify Under Section 151 of
the Code of Civil Procedure which saved the inherent powers of Court and contended
that inherent powers were always available to a Civil Court exercising powers Under
Section 34. Learned Senior Counsel contended that any fear that power to modify will
result in Section 34 power being turned into an appellate power can be checked, by
prescribing guardrails to prevent abuse of the power to modify. Learned Senior Counsel
contended that if the modification required reconsideration of facts on merits, Courts'
ought to remit the award Under Section 34(4), if the remission is to be on narrowly

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defined issues for pure application to facts. Learned Senior Counsel contended that if
remission is to be allowed, the correct position of law should be determined by the
Court and after recording a finding the remission ought to be made. Learned Senior
Counsel contended that severability is well accepted during the course of exercise of
power Under Section 34, which according to the counsel, was after all a facet of
modification and there is no reason why power to modify generally cannot be read into
Section 34.
98. Mr. Shekhar Naphade, learned Senior Counsel contended that if impugned award
grants reliefs which cannot be granted due to factors specified in Sub-clauses (i), (ii),
(iv) and (v) of Clause (a) of Section 34(2) and Sub-clause (i) of Clause (b) of Section
34(2), then there was no question of modifying or substituting an award. According to
the learned Senior Counsel, the only option then was to set aside the award. Learned
Senior Counsel contends that if the award is passed in violation of natural justice then
the question would arise as to what the Court ought to do. Equally so with regard to
awards infested with corruption and wrongful rejection of claims, learned Senior
Counsel contends that mere setting aside would not put an end to the lis. Merely setting
aside the award in such circumstances would defeat the purpose of resolving disputes
expeditiously, contends Mr. Naphade. According to the learned Senior Counsel, it will
also be contrary to fundamental notions of justice since there should be some remedy
for every wrong and the consequence will be that the proceedings will revive and
continue 'ad infinitum' involving enormous delay and huge costs. According to the
learned Senior Counsel the only possible solution therefore, is that after setting aside
the award the Court itself either modifies or substitutes the award and when the Court
does so, it is only passing an order which the arbitral Tribunal ought to have passed
and being a final step in the proceeding it is consistent with the scheme of the Act.
99. Learned Senior Counsel contends that since a Section 34 application is heard by a
Court as defined in Section 2(1)(e), the general principle that every Civil Court has
inherent jurisdiction to deal with matters of civil nature and pass such orders as are
permissible in law ought to apply. According to learned Senior Counsel, Under Section
151 Code of Civil Procedure, a Court is competent to pass such orders as are necessary
to meet the ends of justice.
100. Mr. Naphade contends that Rules of statutory interpretation require the Court to
make every endeavour to avoid a case of casus omissus. Drawing particular attention to
the provisions of the NHAI Act and the acquisition made thereunder, learned Senior
Counsel contends that such matters involved public law elements unlike contractual
arbitration which involves commercial considerations. Hence, where lands are acquired
with paltry compensation and with no remedy to seek a reference for enhancement like
under the normal Land Acquisition Laws, the only remedy available is to enable the
Section 34 Court to enhance compensation and a restricted view of Section 34 in
Statutory arbitrations like in NHAI would render the Section itself ultra vires Article 14.
101. Mr. Ritin Rai, learned senior Counsel reiterated the submission that 'recourse', is a
wider term. He further reiterated that there is no prohibition to modify in the Act. Mr.
Ritin Rai submitted that if the conclusion to modify axiomatically follows a finding, then
modification should be allowed.
102. Mr. Prashanto Chandra Sen, Dr. Manish Singhvi, Learned Senior Counsels and Mr.
Abhishek Kumar Rao, learned Counsel reiterated the arguments of other Senior
Counsels. Dr. Manish Singhvi, learned Senior Counsel argued that competent authorities
under the NHAI are not legally trained minds and the compensation granted by them

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cannot be treated as final and the Section 34 Court should have power to enhance.
Learned Senior Counsel contended that restrictive parameters should not be available
for compulsory arbitration as opposed to consensual arbitration.
103. Mr. Sumeet Pushkarna, learned Senior Counsel, M/s. Ashwin Shanker, Vaibhav
Dang, Amit George and Jinendra Jain by and large reiterated the submissions of Mr.
Datar and Mr. Khambata. Mr. Vaibhav Dang and Mr. Jinendra Jain supplemented the
submissions by adding that substantial cost will be incurred if re-arbitration is to
commence and that Hakeem (supra) did not consider modification by mutual consent
and correction of computation and clerical errors by the Section 34 Court. It was further
argued by Mr. Amit George that power to grant interest, reduce or increase interest
should be read into Section 34 without relegating parties for fresh arbitration. It was
argued that if the award of the Tribunal is contrary to the agreement between the
parties on interest, modifying the same would not require any elaborate inquiry.
Learned Counsel also argues that if in an enquiry Under Section 34, the Court finds that
modifying the award was the only one conclusion possible, it will be a useless formality
to set aside and let parties reagitate in arbitration. It was contended that the word
"recourse" to Court will include the power to modify as, "recourse" is a method of
enforcement of right".
104. Mr. Pallav Mongia, learned Counsel contended that any modification should only
be through the mechanism of Section 34(4). Learned Counsel canvassed the application
of the principle of proportionality as modification through the mechanism of Section
34(4) would be a better option than setting aside the award in entirety. Learned
Counsel contended that the procedural preconditions mentioned in Section 34(4) should
be read as discretionary.
CONTENTIONS OPPOSING THE POWER TO MODIFY: -
1 0 5 . Mr. Tushar Mehta, learned Solicitor General (SG), who, in fact, opened the
arguments at the reference contended that the power to modify has to be statutorily
conferred and cannot be exercised otherwise. The learned Solicitor General, referred to
several statutes of other jurisdictions to contend that wherever power to modify was to
be recognized, such powers were expressly conferred by the legislature. Learned SG
referred to the provisions in UK, USA, Singapore, Canada and a whole host of other
countries to demonstrate the existence of specific power to modify/vary in their
respective arbitration statutes. According to the learned SG, Section 34 of the
Arbitration Act has a strong resemblance with the UNCITRAL Model Law, both of which
delineate limited grounds for setting aside an Arbitral award. The learned SG made
extensive reference to the debates during the preparation of the Model Law to contend
that setting aside was the only recourse available in India as at present and that the
power to remit Under Section 34(4) is intended to prevent annulment on grounds
specified therein. Learned SG referred to the 76th Report of the Law Commission on the
Arbitration Act to contend that no power to modify was recommended even though the
precursor Act, namely, the 1940 Act had in Section 15 a specific power to modify.
Learned SG contended that the scope of setting aside proceedings are not akin to
Appellate proceedings where evidence is re-evaluated and decision is examined for its
correctness on merits. According to the learned SG, the power of modification cannot be
subsumed in the power to "set aside" as both exist on different judicial planes requiring
application of differing judicial parameters.
106. Learned SG particularly emphasized on Section 5 of the A&C Act to canvass for
limited judicial intervention in a manner provided in the statute and nothing more.

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Learned SG referred to Section 34(4) as the solution, provided the grounds mentioned
in the Section are made out. The learned SG distinguished the cases where this Court
had exercised power to modify. Learned SG contended that Article 142 power cannot be
exercised in contravention of statutory power and not being a situation similar to the
one in Vishaka and Ors. v. State of Rajasthan and Ors. MANU/SC/0786/1997 : (1997) 6
SCC 241, no guardrails can be laid down by the Court. Learned SG referred to the
cardinal Rule of interpretation that the words should be given their plain and natural
meaning and that it was not the duty of the Court to enlarge the language of the
provision where the provision is otherwise plain and unambiguous. Learned SG
concluded by contending that the exclusion of the power to modify in the UNCITRAL
Model law was a conscious decision and it was left to the respective countries to
incorporate a provision if it was so desired and that in the absence of any power to
modify the only option was to set aside or pending the proceedings, remit Under
Section 34(4). Learned SG submitted that even the Expert Committee, namely, the
Vishwanathan Committee had only recommended the statutory amendment.
107. Mr. Saurabh Kirpal, learned Senior Advocate contended that Courts cannot modify
clear words of the Statute. According to the counsel, there was no reason to consider
the provisions of the A&C Act as unworkable since, it has worked well for the past three
decades. Reiterating the application of the golden Rule of interpretation, learned Senior
Counsel urged that the plain meaning be given to Section 34. According to the learned
Senior Counsel, 'setting aside' clearly meant quashing the decision. According to the
learned senior Counsel, granting power of modification may only further delay the
proceedings by never ending appeals and the question of speedy justice is a matter for
Parliament to decide. According to the learned senior Counsel, letting in power to
modify into Section 34 will cause uncertainty which is an anathema to business and
commerce. Learned Senior Counsel contends that party autonomy and non-interference
by Court is a golden thread that runs through the Act and that granting power to modify
will drag the Courts into a merits review, which the parties have chosen not to opt,
when they decided to arbitrate. Learned Senior Counsel contends that the principle that
greater power will include lesser power has no application and such a principle will
apply only if the scope of law is of the same genus. According to the learned Senior
Counsel, this Court has already held before the judgment in Hakeem (supra) that
Section 34 does not encompass the power to modify.
108. Mr. Gourab Banerji, learned Senior Counsel contended that the UNCITRAL Model
Law and the A&C Act permit only "setting aside" of awards; that countries which have
derogated from the Model Law have specifically empowered the Courts to modify,
confirm or vary an award in whole or in part, in addition to powers of setting aside;
that power to annul is inconsistent with a power to appeal; that no judicially
manageable standards exist to determine the contours of modification and the only way
forward is by legislation. The learned senior Counsel contended that the A&C Act was
based on the UNCITRAL Model Law and provides finality and binding nature of the
award and minimal judicial intervention. Learned Senior Counsel further contended that
the statutory scheme under the A&C Act, 1996 differs from that of the Act of 1940; that
Section 34 does not provide a merits challenge nor is it an appellate jurisdiction; that
parties consciously opt to exclude the Court's jurisdiction and choose arbitration for its
expediency and finality and that the "limited remedy" Under Section 34 is co-terminus
with the "limited right" to set aside or remit within the meaning of Section 34(4).
According to the learned Senior Counsel, the consequence of a complete annulment is
recommencement of proceedings and any new submission will have to be argued before
the new Tribunal.

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109. Learned senior Counsel contended that the setting aside of the award would not
affect the validity of the Arbitration agreement. Adverting to Section 34(4), learned
Senior Counsel contended that curing defects is limited to cases where award provides
no reasoning or there are gaps in reasoning or those which can otherwise be cured to
avoid a setting aside. Learned Senior Counsel contends that Section 34(4) excludes
reconsideration of the award for the purpose of eliminating the grounds on which the
award can be set aside. Dealing with severability, learned senior Counsel contended
that an award can be segregated and upheld after exclusion of the infirmity, where there
are multiple claims and counter claims which are severable and not inter-dependent.
The Court in Section 34 can set aside or uphold the Arbitrator's decision on individual
and severable claims, without setting aside the whole award, depending upon the facts
and circumstances of the case.
110. Learned Senior Counsel flagged a very important concern if power to modification
is permitted. According to the learned Senior Counsel, it will lead to enforcement issues
under the New York Convention, apart from other anomalies. Learned Senior Counsel
contends that parties clamoring for modification are treating an award akin to a
judgment and Section 34 proceedings akin to an appeal. Before the Arbitrator, even the
misapplication or misinterpretation of law would bind the parties. Learned Senior
Counsel argued that internationally various forms of recourse are recognized and
referred to the power to confirm present in the English Act; the power to vary; the
power to correct; the power to remit and powers to set aside/annul/vacate. According
to the learned Senior Counsel, once the award is set aside, it is quashed, and it never
exists in the eye of law. This would mean that parties would be relegated to their
original litigating position.
111. According to the learned Senior Counsel, the argument that grave injustice will
occur if there is no power to modify is a misconceived submission. Learned Senior
Counsel submits that having taken a conscious decision to exclude Court's jurisdiction,
it does not lie in the mouth of the parties to draw this red herring and contended that
any sanction of power to modify would affect finality and binding nature of the awards.
Learned Senior Counsel contended that reading in guardrails would amount to judicial
legislation. According to the learned Senior Counsel, permitting modification would
compel the Court to do a two-fold exercise, namely, first to decide whether award
suffers from any infirmity and then to decide what the correct outcome would be on the
facts of the case.
112. Learned senior Counsel contends that the power of modification, if permitted, the
original award will be rendered incapable of enforcement, particularly in the New York
Convention awards and cited how other jurisdictions have handled it by incorporating
specific provisions, namely, Section 71 of the English Arbitration Act, Section 5(7) of
Schedule 2 of the New Zealand Arbitration Act, 1996 and Section 39(5) of the Kenyan
Arbitration Act, 1995. According to the learned Senior Counsel, absent such legislative
shield, India seated arbitrations would be vulnerable and unattractive and the awards
would potentially be in breach of the New York Convention.
113. Dealing with statutory arbitrations, learned Senior Counsel contends that solutions
to the maladies of the statutory arbitrations must be sourced to the respective statutes
mandating these arbitrations and not to the A&C Act and suggests that public law
remedies like writ jurisdiction in those cases may provide appropriate remedy.
114. Mr. Gaurav Pachnanda, learned Senior Advocate contended that only if the portion
is severable could the court Under Section 34 sever the award, and even here,

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according to the learned Senior Counsel, an exercise has to be undertaken to examine
whether the good parts of the award can be separately identified both in terms of
liability and quantum without any correlation to the bad parts of the award. According
to the learned Senior Counsel, if good parts are intermingled with the bad parts of the
award in a manner that it is impossible to sever the bad parts, then principles of
severability cannot be applied. To illustrate, the learned Senior Counsel contends that if
a final award is arrived at by netting of claims and counter claims, principles of
severability cannot be applied. According to the learned Senior Counsel, netting of
claims and counter claims results in composite awards where a single amount is
enforceable by the successful parties. According to the learned Senior Counsel, this
would also impact the Stamp duty.
115. Learned Senior Counsel argued that the doctrine of merger does not apply to an
order of the Court Under Section 34. Arguing from that perspective, learned Senior
Counsel contended that jurisdiction Under Section 34 does not extend to modification,
variation or reversal of the Arbitral Tribunal award and the Court can only efface or
annul the arbitral award. According to the Learned Senior Counsel, doctrine of merger
would not apply if the nature and scope of the power of the superior forum is not
identical with the nature and scope of power of the subordinate fora. Learned Senior
Counsel contended that a statutory scheme of merger is recognized in UK and Singapore
and the same is absent in our country. Learned Senior Counsel contended that the
power Under Section 151 Code of Civil Procedure cannot be resorted to when the
mandate of Section 34 is clear.
116. These submissions have been reiterated by Ms. Archana Pathak Dave, learned
ASG, Mr. Naresh Markanda, Mr. Surjendu Sankar Das, Mr. Saurav Agarwal, Mr. Saket
Sikri and Mr. Rahul G. Tanwani, learned Counsels.
117. Both sides referred to a large number of authorities in support of their respective
positions.
THE ECO SYSTEM OF ARBITRATION: HISTORICAL, TEXTUAL AND THE CONTEXTUAL
SETTING:
118. Before the core issue is answered, certain fundamental concepts highlighting the
difference between the adjudication of disputes by the procedure in Courts and the
procedure in Arbitration needs to be emphasized. The judicial power of the State is
exercised by the judiciary and disputes are adjudicated through the mechanism of the
Courts at different hierarchical levels. If disputes were to be adjudicated in Courts,
normal procedural laws would govern the disposal. For example, while the Code of
Criminal Procedure, 1973 (The Bharatiya Nagarik Suraksha Sanhita, 2023) would govern
the procedure in Criminal Courts, the Code of Civil Procedure of 1908 amended in 1976
and thereafter, would govern the procedure in the Civil Courts.
1 1 9 . The Indian Contract Act, 1872, while otherwise holding that Agreements in
restraint of legal proceedings would be void in Section 28, saves Arbitration references.
For the sake of convenience, relevant portions of Section 28 of the Contract Act, are set
out hereinbelow:
28. Agreements in restraint of legal proceedings, void.- Every Agreement,-
(a) by which any party thereto is restricted absolutely from enforcing
his rights under or in respect of any contract, by the usual legal
proceedings in the ordinary tribunals, or which limits the time within
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 which he may thus enforce his rights; or
(b) which extinguishes the rights of any party thereto, or discharges
any party thereto from any liability, under or in respect of any contract
on the expiry of a specified period so as to restrict any party from
enforcing his rights, is void to that extent.
Exception 1.-Saving of contract to refer to arbitration dispute that may arise.-
This Section shall not render illegal a contract, by which two or more persons
agree that any dispute which may arise between them in respect of any subject
or class of subjects shall be referred to arbitration, and that only the amount
awarded in such arbitration shall be recoverable in respect of the dispute so
referred.
Exception 2.-Saving of contract to refer questions that have already arisen.-Nor
shall this Section render illegal any contract in writing, by which two or more
persons agree to refer to arbitration any question between them which has
already arisen, or affect any provision of any law in force for the time being as
to references to arbitration.
120. It is by virtue of this provision that Arbitration clauses in contracts by which
parties voluntarily agreed to step out of the process of normal legal proceedings
through Courts and decide to refer to Arbitration their disputes, is saved. The logic
behind the provision is that when two parties with open eyes agree to submit their
dispute to a third party in whom they have confidence, such contracts should not be
held as void.
1 2 1 . The earliest statute which exclusively dealt with Arbitration was the Indian
Arbitration Act of 1899. Thereafter came the Arbitration Act of 1940 ('1940 Act' for
short), which has since been replaced by the A&C Act. What is important to note is that
contracts referring parties to Arbitration were regulated by statutes. Parties contracting
with open eyes were aware that once they opt for Arbitration, the parameters for
Arbitration were to be governed by the statute regulating the same and that the normal
remedies available to a litigant who is resorting to the existing Courts could not be
applicable and a different procedure would govern the same.
122. The 1940 Act dealt with: Arbitration without intervention of a Court (Sections 3 to
19); Arbitration with intervention of a Court where there is no suit pending (Section
20); Arbitration in suits (Sections 21 to 25) and further Section 27 enabled the
Arbitrator to make an interim award and in Section 30 grounds for setting aside the
award were provided. What is important to note is that Section 15 of the Act of 1940
provided for a power in the Court to modify the award and Section 16 reserved an
express power to remit the award.
123. Sections 15 and 16 of the 1940 Act read as under:
15. Power of Court to modify award.-The Court may by order modify or
correct an award-
(a) where it appears that a part of the award is upon a matter not
referred to arbitration and such part can be separated from the other
part and does not affect the decision on the matter referred; or
(b) where the award is imperfect in form, or contains any

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 obvious error which can be amended without affecting such
decision; or
(c) where the award contains a clerical mistake or an error arising from
an accidental slip or omission.
16. Power to remit award.-(1) The Court may from time to time remit
the award or any matter referred to arbitration to the arbitrators or
umpire for reconsideration upon such terms as it thinks fit-
(a) where the award has left undetermined any of the matters referred
to arbitration, or where it determines any matter not referred to
arbitration and such matter cannot be separated without affecting the
determination of the matters referred; or
(b) where the award is so indefinite as to be incapable of execution; or
(c) where an objection to the legality of the award is apparent upon the
face of it.
(Emphasis supplied)
124. Thereafter, in Section 30 of the 1940 Act, grounds for setting aside the award
were provided. Section 30 reads as follows:
30. Grounds for setting aside award.-An award shall not be set aside
except on one or more of the following grounds, namely:
(a) that an arbitrator or umpire has misconducted himself or the
proceedings;
(b) that an award has been made after the issue of an order by the
Court superseding the arbitration or after arbitration proceedings have
become invalid Under Section 35;
(c) that an award has been improperly procured or is otherwise invalid.
(Emphasis supplied)
125. It is important to note that Section 30 of the 1940 Act opened with the phrase "an
award shall not be set aside except on one or more of the following grounds". These
words are exhaustive and limit the setting aside to the three grounds set out therein.
SCHEME OF THE A&C ACT, 1996: -
126. Reverting to the A&C Act, the Statement of Objects and Reasons sets out that the
UNCITRAL Model Law and Rules harmonize the concepts on arbitration and conciliation
of different legal systems of the world and contain provisions for universal application;
though the UNCITRAL Model Law and Rules are intended to deal with international
commercial arbitration and conciliation, they could with appropriate modifications also
serve as a model for legislation on domestic arbitration and conciliation; that the
present Bill sought to consolidate and amend the law relating to domestic arbitration,
international commercial arbitration, enforcement of foreign arbitral awards and to
define the law relating to conciliation, taking into account the UNCITRAL Model Law and
Rules. Among the main objectives set out were to minimize the role of the courts in the
arbitral process. The Statement of Objects and Reasons of the 1996 Act is extracted
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herein below:
STATEMENT OF OBJECTS AND REASONS
1. The law on arbitration in India is at present substantially contained in three
enactments, namely, the Arbitration Act, 1940, the Arbitration (Protocol and
Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement)
Act, 1961. It is widely felt that the 1940 Act, which contains the general law of
arbitration, has become outdated. The Law Commission of India, several
representative bodies of trade and industry and experts in the field of
arbitration have proposed amendments to this Act to make it more responsive
to contemporary requirements. It is also recognised that our economic reforms
may not become fully effective if the law dealing with settlement of both
domestic and international commercial disputes remains out of tune with such
reforms. Like arbitration, conciliation is also getting increasing worldwide
recognition as an instrument for settlement of disputes. There is, however, no
general law on the subject in India.
2 . The United Nations Commission on International Trade Law (UNCITRAL)
adopted in 1985 the Model Law on International Commercial Arbitration. The
General Assembly of the United Nations recommended that all countries give
due consideration to the said Model Law, in view of the desirability of
uniformity of the law of arbitral procedures and the specific needs of
international commercial arbitration practice. The UNCITRAL also adopted in
1980 a set of Conciliation Rules. The General Assembly of the United Nations
recommended the use of these Rules in cases where the disputes arise in the
context of international commercial relations and the parties seek amicable
settlement of their disputes by recourse to conciliation. An important feature of
the UNCITRAL Model Law and Rules is that they have harmonised concepts on
arbitration and conciliation of different legal systems of the world and thus
contain provisions which are designed for universal application.
3 . Though the said UNCITRAL Model Law and Rules are intended to deal with
international commercial arbitration and conciliation, they could, with
appropriate modifications, also serve as a model for legislation on domestic
arbitration and conciliation. The present Bill seeks to consolidate and amend
the law relating to domestic arbitration, international commercial arbitration,
enforcement of foreign arbitral awards and to define the law relating to
conciliation, taking into account the said UNCITRAL Model Law and Rules.
4. The main objectives of the Bill are as under:
(i) to comprehensively cover international commercial arbitration and
conciliation as also domestic arbitration and conciliation;
(ii) to make provision for an arbitral procedure which is fair, efficient
and capable of meeting the needs of the specific arbitration;
(iii) to provide that the arbitral tribunal gives reasons for its arbitral
award;
(iv) to ensure that the arbitral tribunal remains within the limits of its
jurisdiction;

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 (v) to minimise the supervisory role of courts in the arbitral
process;
(vi) to permit an arbitral tribunal to use mediation, conciliation or other
procedures during the arbitral proceedings to encourage settlement of
disputes;
(vii) to provide that every final arbitral award is enforced in the
same manner as if it were a decree of the court;
(viii) to provide that a settlement agreement reached by the parties as
a result of conciliation proceedings will have the same status and effect
as an arbitral award on agreed terms on the substance of the dispute
rendered by an arbitral tribunal; and
(ix) to provide that, for purposes of enforcement of foreign awards,
every arbitral award made in a country to which one of the two
international Conventions relating to foreign arbitral awards to which
India is a party applies, will be treated as a foreign award.
5. The Bill seeks to achieve the above objects.
(Emphasis supplied)
The Act has since been amended in 2015, 2019 and 2021.
127. It is time now to analyse the conspectus of the legal provisions of the A&C Act
that are relevant for answering the issue at hand. Section 5 is an important provision
which reads as under:
5 . Extent of judicial intervention.-Notwithstanding anything contained in
any other law for the time being in force, in matters governed by this Part, no
judicial authority shall intervene except where so provided in this Part.
(Emphasis Supplied)
128. It will be noticed that the Section begins with a non-obstante Clause and states
that notwithstanding anything contained in any other law for the time being in force, in
matters governed by Part-I, no judicial authority shall intervene except where so
provided in Part-I. Section 7 defines "arbitration agreement" and mandates that it shall
be in writing in the manner as provided in Sub-clause (4) therein. Section 8 is an
important section, which mandates that a judicial authority before which an action is
brought in a manner which is subject to arbitration agreement shall, if a party to the
arbitration agreement or any person claiming through or under him, so applies in the
circumstance set out therein, the judicial authority shall refer the parties to arbitration
unless it finds that prima facie no valid arbitration agreement exists; Section 9 deals
with interim measures; Section 10 deals with number of arbitrators and Section 11
provides for the method of appointment of arbitrators. Sections 12 and 13 deal with
bias and procedure for challenging the continuance of an arbitrator.
129. What is important to notice is where a challenge to an arbitrator on the grounds of
bias fails, the Arbitral Tribunal is mandated to continue the arbitral proceedings. Section
13(5) provides that where an arbitral award is made Under Sub-section (4), the party
challenging the arbitrator may make an application for setting aside such an arbitral
award in accordance with Section 34. The point to be noted is that judicial intervention

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is postponed till the conclusion of the arbitral proceedings and courts are kept at bay
from interfering before the making of an award. This is in line with the mandate of
Section 5 which states that except where so provided it shall be a judicial hands-off.
130. Section 14 deals with failure or impossibility of the arbitrator to act and Section
15 deals with termination of mandate and substitution of arbitrator. Section 16 deals
with the competence of the Arbitral Tribunal to Rule on its own jurisdiction. This
section, based on the Principle of Kompetenz- Kompetenz, vests the arbitral tribunal to
decide upon its own jurisdiction, including ruling on any objections with respect to the
existence or validity of the arbitration agreement. Section 16(2) mandates that a plea
that the arbitral tribunal does not have jurisdiction is to be raised not later than the
submission of the statement of defence; Sub-section (5) of Section 16 states that where
the arbitral tribunal takes a decision rejecting the objection Under Sub-sections (2) and
(3) it shall continue with the arbitral proceedings and make the award and any such
decision upholding the jurisdiction or authority is challengeable only at the stage of
Section 34 and no court will intervene pending the proceedings before the arbitrator.
However, Section 37(2) provides an appeal to the court in case the arbitrator upholds
the objection to jurisdiction or authority. Here again judicial hands-off is specifically
provided and wherever intervention was permitted it took care to make specific
provisions for the same. Section 29A is a specific instance in point where Courts'
intervention is provided for in the context of extension of time for completion of
proceedings. Thereafter, for the purpose of this reference, the next set of Sections that
would merit discussion is Sections 31 to 43.
1 3 1 . Section 31 deals with form and contents of arbitral award. Sub-section (1)
mandates that the arbitral award shall be made in writing and signed by the members of
the arbitral tribunal. Sub-section (4) states that the award shall state its date and the
place of arbitration. Sub-Section 7(a) deals with manner of award of post-award
interest. Sub-Section 7(b) states that unless the award otherwise directs any sum
directed to be paid by the tribunal shall carry interest at the rate of two per cent higher
than the current rate of interest prevalent on the date of award. Sub-section (8) states
that the costs of arbitration shall be fixed by the arbitral tribunal in accordance with
Section 31A. Sub-section (3) of Section 32 states that subject to Section 33 and Sub-
section (4) of Section 34, the mandate of the arbitral tribunal was to terminate with the
termination of the arbitral proceedings.
132. Section 33 deals with correction and interpretation of award; additional award.
Section 33 is extracted herein below:
33. Correction and interpretation of award; additional award.-(1) Within thirty
days from the receipt of the arbitral award, unless another period of time has
been agreed upon by the parties-
(a) a party, with notice to the other party, may request the arbitral
tribunal to correct any computation errors, any clerical or typographical
errors or any other errors of a similar nature occurring in the award;
(b) if so agreed by the parties, a party, with notice to the other party,
may request the arbitral tribunal to give an interpretation of a specific
point or part of the award.
(2) If the arbitral tribunal considers the request made Under Sub-section (1) to
be justified, it shall make the correction or give the interpretation within thirty
days from the receipt of the request and the interpretation shall form part of the
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 arbitral award.
(3) The arbitral tribunal may correct any error of the type referred to in Clause
(a) of Sub-section (1), on its own initiative, within thirty days from the date of
the arbitral award.
(4) Unless otherwise agreed by the parties, a party with notice to the other
party, may request, within thirty days from the receipt of the arbitral award, the
arbitral tribunal to make an additional arbitral award as to claims presented in
the arbitral proceedings but omitted from the arbitral award.
(5) If the arbitral tribunal considers the request made Under Sub-section (4) to
be justified, it shall make the additional arbitral award within sixty days from
the receipt of such request.
(6) The arbitral tribunal may extend, if necessary, the period of time within
which it shall make a correction, give an interpretation or make an additional
arbitral award Under Sub-section (2) or Sub-section (5).
(7) Section 31 shall apply to a correction or interpretation of the arbitral award
or to an additional arbitral award made under this section.
133. A careful reading of Section 33 would indicate that post the award and subject to
the conditions prescribed therein,
(a) either party after notice to the other may request the arbitral tribunal to
correct any computation errors and any clerical or typographical errors or any
errors of a similar nature occurring in the award;
(b) if so agreed by the parties, any party, with notice to the other party, may
request the arbitral tribunal to give an interpretation of a specific point or part
of the award;
(c) such requests, as mentioned above, is to be dealt with by the arbitral
tribunal within 30 days from the date of receipt of request and any such
interpretation given shall form part of the award;
(d) that on its own initiative, the arbitral tribunal may correct any error or
nature of a computation clerical or typographical error within 30 days from the
date of the award;
(e) Subject to any contract to the contrary, a party with notice to the other
party within 30 days from the receipt of the arbitral award, request the tribunal
to make an additional arbitral award as to claims presented in the arbitral
proceedings but omitted from the arbitral award;
(f) such additional award shall be made within 60 days from the receipt of such
request; that the tribunal may extend the period of time within which it shall
make correction, give an interpretation and make an additional award Under
Sub-section (2) of Sub-section (5)
(g) for such correction or interpretation of the arbitral award or to an additional
award, Section 31 was to apply.
134. This Section is set out only for the reason that after the award is made, situations
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necessitating correction of computation errors, clerical or typographical errors are
provided for to be remedied by approaching the arbitrator. This will have a bearing
while interpreting Section 33 & Section 34(4) together, a little later in this judgment.
135. While Section 34 deals with application for setting aside arbitral award, Section
35 speaks of finality of arbitral awards and Section 36 speaks of enforcement. The
epicenter for this reference, however, is Section 34, the scope, sweep and ambit of
which this reference is directly concerned.
136. Section 34 occurs in Chapter VII under the heading "Recourse against arbitral
award", which reads as under:
34. Application for setting aside arbitral award.-(1) Recourse to a
Court against an arbitral award may be made only by an application for
setting aside such award in accordance with Sub-section (2) and Sub-section
(3).
(2) An arbitral award may be set aside by the Court only if-
(a) the party making the application establishes on the basis of the
record of the arbitral tribunal that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to
which the parties have subjected it or, failing any indication
thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper
notice of the appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated
by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the
scope of the submission to arbitration: Provided that, if the
decisions on matters submitted to arbitration can be separated
from those not so submitted, only that part of the arbitral
award which contains decisions on matters not
submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the
parties, unless such agreement was in conflict with a provision
of this Part from which the parties cannot derogate, or, failing
such agreement, was not in accordance with this Part; or
(b) the Court finds that-
(i) the subject-matter of the dispute is not capable of
settlement by arbitration under the law for the time being in
force, or
(ii) the arbitral award is in conflict with the public policy of
India. Explanation 1.-For the avoidance of any doubt, it is
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 clarified that an award is in conflict with the public policy of
India, only if,-
(i) the making of the award was induced or affected by fraud
or corruption or was in violation of Section 75 or Section 81;
or (ii) it is in contravention with the fundamental policy of
Indian law; or
(iii) it is in conflict with the most basic notions of morality or
justice.
Explanation 2.-For the avoidance of doubt, the test as to whether there
is a contravention with the fundamental policy of Indian law shall
not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than
international commercial arbitrations, may also be set aside by the
Court, if the Court finds that the award is vitiated by patent illegality
appearing on the face of the award:
Provided that an award shall not be set aside merely on the
ground of an erroneous application of the law or by
reappreciation of evidence.
(3) An application for setting aside may not be made after three
months have elapsed from the date on which the party making that
application had received the arbitral award or, if a request had been
made Under Section 33, from the date on which that request had been
disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented
by sufficient cause from making the application within the said period
of three months It may entertain the application within a further period
of thirty days, but not thereafter.
(4) On receipt of an application Under Sub-section (1), the Court
may, where it is appropriate and it is so requested by a party,
adjourn the proceedings for a period of time determined by it in order
to give the arbitral tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in the opinion of
arbitral tribunal will eliminate the grounds for setting aside the
arbitral award.
(5) An application under this Section shall be filed by a party only after
issuing a prior notice to the other party and such application shall be
accompanied by an affidavit by the applicant endorsing compliance
with the said requirement.
(6) An application under this Section shall be disposed of
expeditiously, and in any event, within a period of one year from the
date on which the notice referred to in Sub-section (5) is served upon
other party.
(Emphasis Supplied)

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1 3 7 . A careful reading of the Section reveals that it provides the procedure and
grounds for filing an application for setting aside arbitral awards. It opens with the
phrase "recourse to a Court against an arbitral award which is to be made only by an
application for setting aside in accordance with Sub-section (2) and (3)". "Hence, an
application can only be for setting aside" the award which should be in accordance with
the grounds Under Sub-section (2) and (3). Sub-section (2) opens with the phrase "an
arbitral award may be set aside by the court" and "only if" the party make out the
grounds set out therein.
1 3 8 . Section 34(2)(a) deals with parties being under some incapacity; arbitration
agreement not being valid under the law to which the parties have subjected it or under
the law for the time being in force; no proper notice of the appointment of arbitrator or
the arbitral proceedings being given or the party being otherwise unable to present the
case or that the arbitral award dealt with disputes not contemplated by or not falling
within the terms of the submission to arbitration or it contained decisions on matters
beyond the scope of arbitration;
139. Section 34(2)(a)(iv) has an important proviso which states that if the decisions on
matters submitted to arbitration can be separated from those not so submitted, only
that part of the arbitral award which contained decisions on matters not submitted to
arbitration may be set aside; Section 34(2)(a)(v) deals with the composition of the
arbitral tribunal or the arbitral procedure not being in accordance with the agreement of
the parties, unless such agreement itself was in conflict with a provision of Part-I from
which parties cannot derogate or failing such agreement was not in accordance with
Part-I.
140. Section 34 (2)(b) enables awards to be set aside if the subject- matter of the
dispute is not capable of settlement by arbitration under the law for the time being in
force or the arbitral award is in conflict with the public policy of India. Explanation I
sets out the clarification as to when the award will be in conflict with the public policy
of India and it states that if the making the award was induced or affected by fraud or
corruption or was in violation of Section 75 (confidentiality in conciliation) or Section
81 (adducing evidence contrary to the mandate of Section 81); where the award is
contrary to the fundamental policy of India or was in conflict with the most basic
notions of morality or justice. Explanation II clarifies that the test as to whether there is
a contravention with the fundamental policy of India shall not entail a review on the
merits of the dispute.
141. Section 34(2A) is significant since it permits patent illegality appearing on the
face of the award as a ground to set aside the award for domestic arbitrations and does
not extend the said ground for international commercial arbitrations. The proviso
appended clarifies that the award was not to be set aside merely on the ground of an
erroneous application of the law or by re-appreciation of evidence.
1 4 2 . Section 34(4) is a very significant Section which came in for considerable
deliberation at the hearing. Under this provision, a "safety valve" is provided to prevent
awards from being set aside by the Section 34 court by providing an opportunity to the
arbitral tribunal to resume the arbitral proceedings or to take such other action as in the
opinion of the arbitral tribunal will eliminate the grounds for setting aside the award.
This Section has come in for judicial interpretation and will be discussed later in the
course of this judgment.
143. One other Section which ought to be referred to is Section 43(4) which deals with

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the situation post the setting aside of the award. Section 43(4) reads as under:
Section 43(4)- Where the Court orders that an arbitral award be set aside, the
period between the commencement of the arbitration and the date of the order
of the Court shall be excluded in computing the time prescribed by the
Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings
(including arbitration) with respect to the dispute so submitted.
144. The overarching note of restraint in judicial intervention as set out in Section 5;
the proscription for intervention set out in Section 13(5) and 16(5); the range of
options Under Section 33 for the parties and the arbitrator to carry out repairs to the
award in the manner set out there in; the limited option to seek recourse to set aside on
prescribed grounds with the shackle "only if" in Section 34(2) and the further safety
valve available in Section 34(4), to go back to the arbitrator under circumstances
mentioned therein are clear pointers about the acutely circumscribed nature of the
power in the Section 34 court. This, viewed in the background of the fact that parties
have with open eyes contracted to go for arbitration and subject themselves to the
parameters prescribed in the act after ousting the normal judicial process, clearly
indicates that parties were conscious of the limited role for courts in the review of
arbitral awards. The absence of express powers to modify for a court hearing objections
against the award, when such a power existed in the Precursor act also points to the
legislative intent. It is in this background that the arguments of the parties clamouring
for a reading in of the power of modification, needs to be tested.
145. A Seven-Judge Bench of this Court in Interplay Between Arbitration Agreements
under Arbitration and Conciliation Act, 1996 & Stamp Act, 1899, In re,
[MANU/SC/1325/2023 : (2024) 6 SCC 1] interpreting Section 5 of the A&C Act had the
following to say:
81. One of the main objectives of the Arbitration Act is to minimise the
supervisory role of Courts in the arbitral process. Party autonomy and
settlement of disputes by an Arbitral Tribunal are the hallmarks of
arbitration law. Section 5 gives effect to the true intention of the
parties to have their disputes resolved through arbitration in a quick,
efficient and effective manner by minimising judicial interference in
the arbitral proceedings. [Food Corpn. of India v. Indian Council of
Arbitration, MANU/SC/0469/2003 : (2003) 6 SCC 564.]Parliament enacted
Section 5 to minimise the supervisory role of Courts in the arbitral
process to the bare minimum, and only to the extent "so provided"
under the Part I of the Arbitration Act. In doing so, the legislature did not
altogether exclude the role of Courts or judicial authorities in arbitral
proceedings, but limited it to circumstances where the support of judicial
authorities is required for the successful implementation and enforcement of the
arbitral process. [Union of India v. Popular Construction Co.,
MANU/SC/0613/2001 : (2001) 8 SCC 470;P. Anand Gajapathi Raju v. P.V.G.
Raju, MANU/SC/0281/2000 : (2000) 4 SCC 539] The Arbitration Act envisages
the role of Courts to "support arbitration process" [Swiss Timing Ltd. v.
Commonwealth Games 2010 Organising Committee, MANU/SC/0516/2014 :
(2014) 6 SCC 677: (2014) 3 SCC (Civ) 642] by providing necessary aid and
assistance when required by law in certain situations.
86. Similar to Article 5 of the Model Law, Section 5 uses the expression "in
matters governed by this Part". The use of this expression circumscribes the

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 scope of judicial intervention to matters expressly governed by Part I of the
Arbitration Act. The matters governed by Part I inter alia include:
86.1. Section 8 which mandates judicial authorities to refer parties to
arbitration when prima facie there is a valid arbitration agreement;
86.2. Section 9 which allows Courts to issue interim measures on an
application made by a party to an arbitration agreement;
86.3. Section 11 which empowers the Supreme Court or the High
Courts to appoint arbitrators on an application made by parties to an
arbitration agreement;
86.4. Section 27 which allows the Arbitral Tribunal to request the
Court for assistance in taking evidence; and
86.5. Section 34 which empowers the Court to set aside an arbitral
award on the basis of the limited grounds mentioned therein.
87. Section 5 has two facets - positive and negative. The positive facet vests
judicial authorities with jurisdiction over arbitral proceedings in matters
expressly allowed in or dealt with under Part I of the Arbitration Act. The flip
side to this approach is that judicial authorities are prohibited from intervening
in arbitral proceedings in situations where the Arbitral Tribunal has been
bestowed with exclusive jurisdiction. This is the negative facet of Section 5.
The non obstante Clause limits the extent of judicial intervention in respect of
matters expressly provided under the Arbitration Act. [Secur Industries Ltd. v.
Godrej & Boyce Mfg. Co. Ltd., MANU/SC/1129/2004 : (2004) 3 SCC 447] In
Bhaven Construction v. Sardar Sarovar Narmada Nigam Ltd. [Bhaven
Construction v. Sardar Sarovar Narmada Nigam Ltd., MANU/SC/0008/2021 :
(2022) 1 SCC 75: (2022) 1 SCC (Civ) 374], a Bench of three Judges of this
Court observed that the: (Bhaven Construction case [Bhaven Construction v.
Sardar Sarovar Narmada Nigam Ltd., MANU/SC/0008/2021 : (2022) 1 SCC 75:
(2022) 1 SCC (Civ) 374], SCC p. 82, para 12)
12. ... non obstante Clause is provided to uphold the intention of the
legislature as provided in the Preamble to adopt UNCITRAL Model Law
and Rules, to reduce excessive judicial interference which is not
contemplated under the Arbitration Act.
89. Section 5 is of aid in interpreting the extent of judicial interference Under
Sections 8 and 11 of the Arbitration Act. Section 5 contains a general Rule of
judicial non-interference. Therefore, every provision of the Arbitration Act ought
to be construed in view of Section 5 to give true effect to the legislative
intention of minimal judicial intervention.
(Emphasis supplied)
SOME CASES CITED IN THE REFERRAL ORDER:
146. Before the contentions of the respective parties are addressed, the deck needs to
be cleared by discussing the judgments set out in question No. 5 in the referral order of
20.02.2024, particularly those cases referred to therein where modification of the award
was ordered or an imprimatur was put on the modifications already made, to
understand the circumstances under which they came to be done. Considering that this
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is a Bench of five, those judgments would not be binding. However, the endeavour here
is to understand the rationale behind the said judgments to see whether it will be of any
assistance herein.
147. The earliest case referred is Tata Hydro-Electric Power Supply Co. Ltd. and Ors. v.
Union of India, MANU/SC/0095/2003 : (2003) 4 SCC 172. In the said judgment, while
setting aside the judgment of the High Court and upholding the Award, a three-Judge
Bench of this Court without discussing the legal issue as to whether the power to
modify existed in a Section 34 Court or not, modified the date of commencement of
interest from the awarded date of August, 1993 to 30.03.1998, which was the date
when the Award came to be passed. This authority is of little help since the issue that
arises for consideration was not debated and it was on the assumption that the power
existed.
148. Insofar as the judgment in J.C. Budhraja v. Chairman, Orissa Mining Corporation
Ltd. and Another, MANU/SC/0602/2008 : (2008) 2 SCC 444 is concerned, that case
arose under the Arbitration Act, 1940. In the said case, the Arbitrator awarded a sum of
Rs. 1,02,66,901.36 (which was more than the claim of Rs. 95,96,616.00) with interest
@ 12% p.a. from 01.08.1997 till date of Award and future interest @ 6% p.a. from the
expiry of one month from the date of the Award till date of decree. The Award was in
respect of 35 claims. Claim Nos. 1-16 related to the Schedule of items under the
contract and claim Nos. 17 to 34 were in respect of work which did not form part of the
contract Schedule and Claim No. 35 related to escalation in cost of labour and material
on account of delay in execution. The Civil Judge (Senior Division) Bhubaneshwar,
overruling the objections of the award debtor made the award a Rule of the court. While
the award debtor filed Misc. Appeal challenging the decision of the Civil Judge in the
High Court, the contractor also filed Misc. Appeal and Civil Revision claiming future
interest from the date of decree as the judgment of the Civil Court was silent. By a
common judgment, the High Court held that claims of the contractor to be barred by
limitation and set aside the Award. It allowed the award debtor's appeal and dismissed
the award holders appeal and revision. On further appeal to this Court, this Court held
that out of the total claim of Rs. 95,96,616.00 the claim for only Rs. 28,32,128.00 was
within time. The remaining claims aggregating to Rs. 67,44,488.00 were fresh claims
which were not pending claims in respect of which the acknowledgement was made.
Therefore, the fresh claims were held barred by limitation. Therafter, this Court in para
34 held as under:
34. Does it mean that the entire award should be set aside? The answer is, No.
That part of the award which is valid and separable can be upheld. That part
relates to the claims which were validly made before the arbitrator, which were
part of the existing or pending claims of Rs 50,15,820 and which were not
barred by limitation. As stated above they were the claims which were existing
or pending in 1978, 1979 and 1980 (considered by the committee and payment
made by OMC) which were carried before the arbitrator to an extent of Rs
28,32,128. Only the amounts awarded by the arbitrator against those claims
can be considered as award validly made in arbitration, falling within
jurisdiction. They are clearly severable from the other portions of the award.
149. It is clear that apart from the fact that the said judgment arose under the old Act,
it was a case where the principle of severability was applied. In any event, being a
matter under the 1940 Act, power to modify clearly existed. Hence, the judgment cannot
be of any help in deciding the scope of power Under Section 34 of the A&C Act.

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150. Insofar as the judgment in Madhya Pradesh Power Generation Company Limited
and Another v. Ansaldo Energia Spa and Another, MANU/SC/0383/2018 : (2018) 16
SCC 661 is concerned, as is clear from paras 38 & 39 of the said judgment, this Court
on the finding that the bank guarantees dated 22.02.2000 and 23.02.2000 were towards
the amounts advanced by the Board to the contractor severed the amounts involved in
the bank guarantee of the said two dates. Paras 38 & 39 read as under:
38. The bank guarantee given on 24-2-2000 was a performance bank guarantee
and the claimant is entitled for return of the amount for which the bank
guarantee was given. The Arbitral Tribunal, however, failed to take notice of the
fact that the other two bank guarantees were given for the amounts to be
advanced by the Board. In fact, the Board had advanced the said amounts to
the claimants. We are of the opinion that the claimant is not entitled for return
of the amounts involved in the bank guarantees dated 22-2-2000 and 23-2-
2000 as they were towards the amounts advanced by the Board. The rejection
of the claim pertaining to the damages mentioned in Ext. HH of the statement of
claim which includes loss of profit, overheads and loss of commercial
opportunities clearly indicates that the Arbitral Tribunal never intended to grant
any damages to the claimant. The claims allowed by the Arbitral Tribunal
pertained only to the return of the claimants' money involved in the bank
guarantees and the amounts actually spent by the claimants.
39. We uphold the award of the Arbitral Tribunal with the modification that the
claimants are not entitled for the amounts involved in the bank guarantees
dated 22-2-2000 and 23-2-2000 given by the claimants.
151. Since the severed portion was a standalone portion not inseparably intertwined
with other portions of the award, this Court had no difficulty in severing. Hence, really
it is not a case of modification of any portion of the award but a case of severance.
152. Now coming to the judgment in Vedanta Limited v. Shenzhen Shandong Nuclear
Power Construction Company Limited, MANU/SC/1159/2018 : (2019) 11 SCC 465, this
Court modified the interest with regard to the EUR component and held that in respect
of the award rate of 9% on the EUR component, the award debtor will be liable to pay
interest @ LIBOR rate + 3 percentage points, prevailing on the date of the award. The
question as to whether interest can be modified, has been dealt with in the later part of
this judgment.
153. Shakti Nath and Ors. v. Alpha Tiger Cyprus Investment No. 3 Limited and Ors.
MANU/SC/0199/2020 : (2020) 11 SCC 685 was a case where, by consent of parties, the
interest and penal interest was modified. Para 4 of the said judgment reads as follows:
4. After having heard the counsel appearing for all the parties, the challenge to
the ICC award is hereby rejected. With respect to the amount awarded towards
interest and penal interest under the award, the same has been modified by
consent of parties, as a prudent commercial decision, ...
1 5 4 . Oriental Structural Engineers Private Limited v. State of Kerala,
MANU/SC/0299/2021 : (2021) 6 SCC 150 was against a case where interest was
modified from 12% to 8% which is an aspect discussed hereinbelow.
ANALYSIS OF THE CONTENTIONS AND REASONING: - CAN WORDS BE READ INTO
SECTION 34?

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155. The contention that the words "and, to the extent" and the words "or modified",
and "to the extent" be read into parts of Section 34 is only to be stated to be rejected.
The justification for this argument that the Court can iron out the creases is not
appealing at all because what is sought to be done is virtual mutilation of the fabric and
not just the ironing out of the creases. It is also very well settled that where the
language is plain and clear, the Court will prefer the plain meaning Rule and when there
is no casus omissus, the Court cannot interpret a statute as to create one.
156. This Court in CIT, Central Calcutta v. National Taj Traders, MANU/SC/0310/1979 :
(1980) 1 SCC 370 has lucidly captured this, in the following words:
10. Two principles of construction - one relating to casus omissus and
the other in regard to reading the statute as a whole - appear to be
well settled. In regard to the former the following statement of law
appears in Maxwell on Interpretation of Statutes (12th Edn.) at p. 33:
Omissions not to be inferred.-It is a corollary to the general
Rule of literal construction that nothing is to be added to or
taken from a statute unless there are adequate grounds to
justify the inference that the legislature intended something
which it omitted to express. Lord Morsey said: 'It is a strong
thing to read into an Act of Parliament words which are not
there, and in the absence of clear necessity it is a wrong thing
to do'. 'We are not entitled', said Lord Loreburn L.C., 'to read words
into an Act of Parliament unless clear reason for it is to be found within
the four corners of the Act itself'. A case not provided for in a
statute is not to be dealt with merely because there seems no
good reason why it should have been omitted, and the
omission appears in consequence to have been unintentional.
In regard to the latter principle the following statement of law appears in
Maxwell at p. 47:
A statute is to be read as a whole.-It was resolved in the case of
Lincoln College [(1595) 3 Co. Rep. 58b at p. 59b] that the good
expositor of an Act of Parliament should 'make construction on all the
parts together, and not of one part only by itself'. Every Clause of a
statute is to 'be construed with reference to the context and other
clauses of the Act, so as, as far as possible, to make a consistent
enactment of the whole statute'." (Per Lord Davey in Canada Sugar
Refining Co. Ltd. v.R., 1898 AC 735.)
(Emphasis supplied)
157. The case law cited by Mr. Datar, learned Senior Counsel to read words into have
no application to the present case. As the cited cases indicate they were done in
situations where irreconcilable conflict was to be avoided; where failure to do so would
have resulted in absurdities and injustice; where it was needed to bring the provision in
consonance with reason and justice and where parts of the statute would otherwise
have been rendered ineffective and meaningless. That is not the situation here.
158. Section 34 speaks of 'Recourse' being taken against an arbitral award. The word
'Recourse' has been defined in P. Ramanatha Aiyar's Advanced Law Lexicon Third
Edition to mean:
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 the act of seeking help or advice; enforcement or method of enforcing a right.
Further, Section 34 of the A&C Act clearly states that an arbitral award may be "Set
aside" by the Court "only if" the prescribed circumstances are established.
159. The expression "Set aside" has been defined in P. Ramnatha Aiyar's Advanced Law
Lexicon (third edition) to mean
to annul, quash, render, void or negatory.
160. Further, the phrase "only if" in the context in which it is used makes it amply clear
that only if the grounds prescribed are established could the award be set aside. The
word "only" has been interpreted by this Court to mean to be a phrase ordinarily used
as an exclusionary term and it has been held that in ascertaining its meaning its
placement is material, as also the context in which the word is used (See Ramesh Rout
v. Rabindra Nath Rout, MANU/SC/1481/2011 : (2012) 1 SCC 762).
161. The combined use of the phrase "set aside" and "only if" read with the phrase
"recourse" makes it amply clear that the only manner of interfering with the award as
permitted in the Act and as reinforced by Section 5 of the said Act is to file an
application to set aside or annul the award by establishing the grounds prescribed
therein. As already pointed out, Section 5 mandates that no judicial authority is to
intervene except where so provided under the A&C Act.
THE FALLACY IN THE 'HARDSHIP' ARGUMENT: -
162. The argument that absurdities will result and hardship will be caused if power to
modify is not read in has no merit. There are at least two compelling reasons to hold
so. The A&C Act in Section 43(4) itself contemplates that on the setting aside of the
award the option is to commence proceedings including arbitration with respect to the
dispute. The law makers are fully conscious of the situation that setting aside of the
award will result in the dispute continuing to be thrown open at large since
notwithstanding the setting aside of the award the legal position is that the arbitration
agreement survives, except in situations where the order setting aside has findings
impinging on the validity of the arbitration agreement itself.
163. Though said in the context of Section 19 of the 1940 Act, Juggilal Kamlapat v.
General Fibre Dealers Ltd., 1961 SCC OnLine SC 402, reinforces the point that the
arbitration agreement can survive the setting aside of award. It was said that when a
court sets aside an arbitral award, it retains the discretion to either supersede the
reference to arbitration or allow it to continue, a power peculiar to the arbitration Act of
1940. If the court decides to supersede the reference, it must also order that the
arbitration agreement ceases to have effect concerning the dispute referred. However, if
the court does not supersede the reference, both the arbitration agreement and the
reference remain valid, enabling the parties to proceed with further arbitration. This
Court in Juggilal Kamlapat (supra) observed:
8 The intention of the legislature in making this change in the consequences to
follow the setting aside of an award is clear in as much as the provision
recognises that there may be different kinds of arbitration agreements, some of
which might be exhausted by the reference already made and the award
following thereon which has been set aside while others may be of a more
comprehensive nature and may contemplate continuation of the reference
relating to the same dispute or successive references relating to
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 different disputes covered by the arbitration agreement. .....
......It will thus be seen that the discretion vested in the court Under Section 19
depends upon the nature of the arbitration agreement in particular cases and it
is on a consideration of those terms that the court may decide in one case to
supersede the reference and order the arbitration agreement to cease to have
effect after taking into account the reasons which have impelled it to set aside
the award and in another not to set aside the reference with the result that the
reference and the arbitration agreement subsist; and if the arbitration
agreement provides for machinery to have further arbitration on the
same dispute or other disputes arising under the arbitration agreement it is
permissible to have further arbitration on the same dispute or other disputes.
....
(Emphasis supplied)
164. This Court in Mcdermott International Inc. (Supra) pertinently observed that
"The court cannot correct errors of the arbitrators. It can only quash the award leaving
the parties free to begin the arbitration again if it is desired."
(Emphasis supplied)
165. Chief Justice, Sundaresh Menon of the Supreme Court of Singapore explains this
concept in AKN v. ALC, 2015 SGCA 63, thus:
51. There is simply nothing to warrant the conclusion that where an award has
been set aside, the tribunal which made that award would somehow resume the
ability and mandate to determine afresh the matters that had been dealt with in
the award. But, as alluded to above, this goes to the mandate of that particular
tribunal. The fact that the award has been set aside would not, in and
of itself, affect the continued validity and force of the arbitration
agreement between the parties, save in the situation where the award
was set aside on the ground that there was no arbitration agreement
between the parties. In L W Infrastructure (HC), Belinda Ang J
described this as "Situation 2" and observed as follows (at [48]):
Similarly, where an arbitral award is "beyond power" in the sense that
the tribunal lacks jurisdiction to deal with the dispute altogether (for
instance, where there is no valid agreement to arbitrate, where a
party to the arbitration agreement was under some incapacity or
where the arbitral tribunal has not been properly appointed)... that
would clearly be the end of the enquiry and the tribunal would obviously not be
vested with jurisdiction to deal with the matter merely because the award has
been set aside by the court. [emphasis in original]
52. We agree with this analysis. But save in this situation, the arbitration
agreement will generally survive the setting aside of an award. On this
basis, it may be open, subject to certain other limitations, to which we
will briefly turn, for a party which has successfully obtained an award
in the arbitration and then seen that set aside by the court, to start a
fresh arbitration. This follows given that:
(a) The dispute has not yet been resolved since the award has been set
aside; and
(b) The arbitration agreement remains binding on the parties as to how
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 they will resolve their disputes.
5 4 . Against this background, we return to the possible limitations that we
alluded to at [52] above, which might stand in the way of a party seeking to
commence fresh arbitration proceedings after an award was set aside. This is
by no means an exhaustive list but it seems to us that there are at least three
possibly significant matters that would have to be considered, quite apart from
practical considerations of cost and time, which are mentioned in some of the
extracts from the academic commentaries that we have referred to:
(a) It is possible that a limitations defence might have accrued by the
time the fresh set of proceedings is commenced. This possibility also
has been alluded to in some of the academic commentaries that we
have referred to above. We note that it is possible for this to be
addressed in appropriate circumstances pursuant to s 8A(2) of the IAA,
which empowers the court in the exercise of its discretion to extend
time for the commencement of proceedings by excluding from
consideration the period between the commencement of the arbitration
and the setting aside of the award. We comment further on s 8A(2)
below (at [64]-[67]).
(b) We have said that the arbitration agreement will generally survive
the setting aside of the award. This would entail, however, the
recommencement of fresh arbitration proceedings and in general, one
would expect a new tribunal to be constituted. It is of course possible
for both parties to agree to reconstitute the previous tribunal as the
new one. But in the absence of such agreement, there remains the
possibility that objections might yet be taken by one of the parties to
any attempt by the other to re-appoint a member of the previous
tribunal, on the grounds that there exist justifiable doubts as to the
impartiality of the prospective appointee by reason of his or her prior
involvement in the matter and in the award that has been set aside.
This will plainly be a fact-sensitive inquiry and we say no more about
this.
(c) We think it is inevitable that in attempting to commence a fresh
arbitration, consideration will have to be given to the issue of res
judicata. We deal with this in the next Section of this judgment.
(Emphasis supplied)
1 6 6 . Hence, recommencement of proceedings including arbitration proceedings-
wherever legally maintainable- being expressly contemplated in the statute the same
cannot be brushed aside on the grounds of causing hardship to the parties. Parties, no
doubt, will have all contentions and defences open as are available to them in law.
CONTRACTUAL OUSTER OF THE NORMAL JUDICIAL PROCESS: -
1 6 7 . The second reason is equally compelling. As briefly discussed earlier, when
parties agree to arbitrate, they consciously with open eyes agree to step out of the
normal judicial process and submit their dispute to a third party. Parties then are also
conscious that when they agree to arbitrate their rights and liabilities will be governed
by the regulating Act, which in this case is the A&C Act. In that sense, there is a
contractual ouster subject to the terms of the A&C Act of the normal judicial process
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and the said course of action is sanctified Under Section 28 of the Contract Act since
such agreements are expressly held not to be opposed to public policy.
168. In the normal judicial process, the dispute would be adjudicated by the Court of
first instance and appeals as provided in the Code of Civil Procedure, 1908 (C.P.C. for
short) would ordinarily have been available to the aggrieved parties.
CONTRAST WITH THE APPELLATE POWER UNDER Code of Civil Procedure: -
169. A perusal of the conspectus of the scope of the appellate power under the Code of
Civil Procedure would bring the contrast between the normal appellate power and the
powers available to a Section 34 Court under the A&C Act. Part VII of the Code of Civil
Procedure, 1908, as amended in 1976, read with Order XLI sets out the scope of the
power of an Appellate Court. Section 107 and 108 reads as under:
107. Powers of Appellate Court.-(1) Subject to such conditions and
limitations as may be prescribed, an Appellate Court shall have power-
(a) to determine a case finally;
(b) to remand a case;
(c) to frame issues and refer them for trial;
(d) to take additional evidence or to require such evidence to be taken.
(2) Subject as aforesaid, the Appellate Court shall have the same
powers and shall perform as nearly as may be the same duties as are
conferred and imposed by this Code on Courts of original jurisdiction in
respect of suits instituted therein.
108. Procedure in appeals from appellate decrees and orders.- The
provisions of this Part relating to appeals from original decrees shall, so far as
may be, apply to appeals-
(a) from appellate decrees, and
(b) from orders made under this Code or under any special or local law
in which a different procedure is not provided.
(Emphasis supplied)
170. Order XLI of the Code of Civil Procedure prescribes certain rules, some of which
are relevant herein. Rule 31, 32 and 33 are extracted hereinbelow:
31. Contents, date and signature of judgment.-The judgment of the
Appellate Court shall be in writing and shall state- (a) the points for
determination; (b) the decision thereon; (c) the reasons for the decision; and
(d) where the decree appealed from is reversed or varied, the relief to
which the Appellant is entitled; and shall at the time that it is
pronounced be signed and dated by the Judge or by the Judges
concurring therein.
32. What judgment may direct.-The judgment may be for confirming,
varying or reversing the decree from which the appeal is preferred, or,
if the parties to the appeal agree as to the form which the decree in
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 appeal shall take, or as to the order to be made in appeal, the
Appellate Court may pass a decree or make an order accordingly.
33. Power of Court of Appeal.-The Appellate Court shall have power to pass
any decree and make any order which ought to have been passed or made and
to pass or make such further or other decree or order as the case may require,
and this power may be exercised by the Court notwithstanding that the appeal
is as to part only of the decree and may be exercised in favour of all or any of
the Respondents or parties, although such Respondents or parties may not have
filed any appeal or objection, and may, where there have been decrees in
cross-suits or where two or more decrees are passed in one suit, be exercised
in respect of all or any of the decrees, although an appeal may not have been
filed against such decrees:
Provided that the Appellate Court shall not make any order Under Section 35A,
in pursuance of any objection on which the Court from whose decree the appeal
is preferred has omitted or refused to make such order.
(Emphasis supplied)
171. It will be noticed that an Appellate Court under the normal judicial process has
powers coextensive with the original Court (Section 107(2) Code of Civil Procedure).
The Respondent in an appeal can challenge the findings against him (Order XLI Rule
22). The Appellate Court can confirm, vary, reverse the decree and if the parties to the
appeal agree as to the form which the decree in appeal is to take or as to the order to
be made in appeal, the Appellate Court may pass a decree or make an order (order XLI
Rule 31 and 32) and the Appellate Court shall have the power to pass any decree and
make any order which ought to have been passed or made and pass or make such
further or other decree or order. Further, the Appellate Court may exercise the power
notwithstanding that the appeal was only to a part of the decree and may be exercised
in favour of all or any of the Respondents or parties, although such Respondents or
parties may not have filed any appeal or objection (Order XLI Rule 33).
172. This wide power is not available to a Court Under Section 34 of the A&C Act while
entertaining an application to set aside the arbitral award. The word 'modify' has been
defined in P. Ramanatha Aiyar's Advanced Law Lexicon Third Edition to mean:
To change, or vary, to qualify or reduce.
The position that the Court does not sit in appeal over the arbitral award is well- settled
by now. This Court in Dyna Technologies Private Limited v. Crompton Greaves Limited,
MANU/SC/1765/2019 : (2019) 20 SCC 1, observed:
24. There is no dispute that Section 34 of the Arbitration Act limits a challenge
to an award only on the grounds provided therein or as interpreted by various
courts. We need to be cognizant of the fact that arbitral awards should not be
interfered with in a casual and cavalier manner, unless the court comes to a
conclusion that the perversity of the award goes to the root of the matter
without there being a possibility of alternative interpretation which may sustain
the arbitral award. Section 34 is different in its approach and cannot be equated
with a normal appellate jurisdiction. The mandate Under Section 34 is to
respect the finality of the arbitral award and the party autonomy to get their
dispute adjudicated by an alternative forum as provided under the law. If the
courts were to interfere with the arbitral award in the usual course on factual
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 aspects, then the commercial wisdom behind opting for alternate dispute
resolution would stand frustrated.
25. Moreover, umpteen number of judgments of this Court have categorically
held that the courts should not interfere with an award merely because an
alternative view on facts and interpretation of contract exists. The courts need
to be cautious and should defer to the view taken by the Arbitral Tribunal even
if the reasoning provided in the award is implied unless such award portrays
perversity unpardonable Under Section 34 of the Arbitration Act.
173. There is a sound jurisprudential reason for the same. Arbitration has its origin in
the contract between parties where parties have stepped out of the ordinary judicial
process and in that sense there is an ouster of the jurisdiction of the Court's power to
adjudicate.
174. In view of this, the Section 34 Court unless expressly authorized by law cannot
modify or vary the award since it will be tantamount to exercising the power of merits
review, when parties have contracted to have their disputes referred to a third party
outside the normal judicial process, for adjudication by arbitration.
175. It will be difficult to countenance the argument that words be read into, to confer
that power to modify, as it will tantamount to exercising legislative power. Modification
or variation of the award in the absence of an express legislative sanction would
tantamount to courts usurping the power of the arbitrator when there is no legislative
sanction for the same.
IS POWER TO 'MODIFY' A LESSER POWER?
176. Parties have contended that the power to set aside is a larger power and hence a
power to modify is after all a lesser power which should be subsumed in the larger
power. They have relied on the legal maxim omne majus continet in se minus: the
greater contains the less. At first blush, though the argument seems attractive, a close
scrutiny reveals that the argument has really no substance. As explained hereinabove,
the qualitative nature of an appellate power is different from the power Under Section
34. The two operate in different spheres and are not of the same genus. They do not
have similar characteristics. It cannot be said just on a first blush understanding that
power to set aside is larger and power to modify is smaller or lesser without keeping
the context in which Section 34 occurs in the Act and without considering the very
ecosystem of the arbitration process.
177. There is a useful authority albeit from the criminal jurisdiction which brings out
this concept. In Shamnsaheb M. Multtani v. State of Karnataka, MANU/SC/0047/2001 :
(2001) 2 SCC 577, a question arose whether an Accused charged Under Section 302
Indian Penal Code could be at the trial convicted for offences Under Section 304-B of
the Indian Penal Code and as to whether Section 304-B could be said to be a minor
offence. Answering in the negative, this Court, speaking through K.T. Thomas, J.,
felicitously explained the principle thus.
15. Section 222(1) of the Code deals with a case "when a person is charged
with an offence consisting of several particulars". The Section permits the court
to convict the Accused "of the minor offence, though he was not charged with
it". Sub-section (2) deals with a similar, but slightly different situation.
2 2 2 . (2) When a person is charged with an offence and facts are
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 proved which reduce it to a minor offence, he may be convicted of the
minor offence, although he is not charged with it.
16. What is meant by "a minor offence" for the purpose of Section 222 of the
Code? Although the said expression is not defined in the Code it can be
discerned from the context that the test of minor offence is not merely that the
prescribed punishment is less than the major offence. The two illustrations
provided in the Section would bring the above point home well. Only if the
two offences are cognate offences, wherein the main ingredients are
common, the one punishable among them with a lesser sentence can
be regarded as minor offence vis-a-vis the other offence.
17. The composition of the offence Under Section 304-B Indian Penal
Code is vastly different from the formation of the offence of murder
Under Section 302 Indian Penal Code and hence the former cannot be
regarded as minor offence vis-a-vis the latter. However, the position
would be different when the charge also contains the offence Under Section
498-A Indian Penal Code (husband or relative of husband of a women
subjecting her to cruelty). As the word "cruelty" is explained as including, inter
alia, "harassment of the woman where such harassment is with a view to
coercing her or any person related to her to meet any unlawful demand for any
property or valuable security or is on account of failure by her or any person
related to her to meet such demand".
18. So when a person is charged with an offence Under Sections 302 and 498-
A Indian Penal Code on the allegation that he caused the death of a bride after
subjecting her to harassment with a demand for dowry, within a period of 7
years of marriage, a situation may arise, as in this case, that the offence of
murder is not established as against the accused. Nonetheless, all other
ingredients necessary for the offence Under Section 304-B Indian Penal Code
would stand established. Can the Accused be convicted in such a case for the
offence Under Section 304-B Indian Penal Code without the said offence
forming part of the charge?
34. In such a situation, if the trial court finds that the prosecution has failed to
make out the case Under Section 302 Indian Penal Code, but the offence Under
Section 304-B Indian Penal Code has been made out, the court has to call upon
the Accused to enter on his defence in respect of the said offence. Without
affording such an opportunity to the accused, a conviction Under Section 304-B
Indian Penal Code would lead to real and serious miscarriage of justice. Even if
no such count was included in the charge, when the court affords him an
opportunity to discharge his burden by putting him to notice regarding the
prima facie view of the court that he is liable to be convicted Under Section
304-B Indian Penal Code, unless he succeeds in disproving the presumption, it
is possible for the court to enter upon a conviction of the said offence in the
event of his failure to disprove the presumption.
3 5 . As the Appellant was convicted by the High Court Under Section 304-B
Indian Penal Code, without such an opportunity being granted to him, we deem
it necessary in the interest of justice to afford him that opportunity. The case in
the trial court should proceed against the Appellant (not against the other two
Accused whose acquittal remains unchallenged now) from the stage of defence
evidence. He is put to notice that unless he disproves the presumption, he is

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 liable to be convicted Under Section 304-B Indian Penal Code.
(Emphasis supplied)
178. Hence, power to modify which would include the Court entering the arena of
adjudicating the dispute on merits when parties have contractually agreed to go to the
arbitrator, cannot be said to be subsumed in the power to "set aside". It will be a
different matter if the power to modify or power to vary is conferred by the legislature
itself. Post the UNCITRAL Convention when the participating countries legislated, while
India did not recognize in the statute the power to modify or vary, several jurisdictions
like U.K. and Singapore positively legislated. The provision in the U.K. State Arbitration
Act and the Singapore Arbitration Act are set out hereinbelow to bring home the point.
Relevant provisions under the English Arbitration Act, 1996
67. Challenging the award: substantive jurisdiction.
(1) A party to arbitral proceedings may (upon notice to the other parties and to
the tribunal) apply to the court-
(a) challenging any award of the arbitral tribunal as to its substantive
jurisdiction; or
(b) for an order declaring an award made by the tribunal on the merits
to be of no effect, in whole or in part, because the tribunal did not have
substantive jurisdiction.
A party may lose the right to object (see Section 73) and the right to apply is
subject to the restrictions in Section 70(2) and (3).
(2) The arbitral tribunal may continue the arbitral proceedings and make a
further award while an application to the court under this Section is pending in
relation to an award as to jurisdiction.
(3) On an application under this Section challenging an award of the arbitral
tribunal as to its substantive jurisdiction, the court may by order-
(a) confirm the award,
(b) vary the award, or
(c) set aside the award in whole or in part.
(4) The leave of the court is required for any appeal from a decision of the
court under this section.
69. Appeal on point of law.
(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may
(upon notice to the other parties and to the tribunal) appeal to the court on a
question of law arising out of an award made in the proceedings.
An agreement to dispense with reasons for the tribunal's award shall be
considered an agreement to exclude the court's jurisdiction under this section.
(2) An appeal shall not be brought under this Section except-
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 (a) with the agreement of all the other parties to the proceedings, or
(b) with the leave of the court.
The right to appeal is also subject to the restrictions in Section 70(2) and (3).
(3) Leave to appeal shall be given only if the court is satisfied-
(a) that the determination of the question will substantially affect the
rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award-
(i) the decision of the tribunal on the question is obviously wrong, or
(ii) the question is one of general public importance and the decision of
the tribunal is at least open to serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by
arbitration, it is just and proper in all the circumstances for the court to
determine the question.
(4) An application for leave to appeal under this Section shall identify the
question of law to be determined and state the grounds on which it is alleged
that leave to appeal should be granted.
(5) The court shall determine an application for leave to appeal under this
Section without a hearing unless it appears to the court that a hearing is
required.
(6) The leave of the court is required for any appeal from a decision of the
court under this Section to grant or refuse leave to appeal.
(7) On an appeal under this Section the court may by order-
(a)confirm the award,
(b) vary the award,
(c) remit the award to the tribunal, in whole or in part, for
reconsideration in the light of the court's determination, or
(d) set aside the award in whole or in part.
The court shall not exercise its power to set aside an award, in whole
or in part, unless it is satisfied that it would be inappropriate to remit
the matters in question to the tribunal for reconsideration.
(8) The decision of the court on an appeal under this Section shall be treated as
a judgment of the court for the purposes of a further appeal.
But no such appeal lies without the leave of the court which shall not be given
unless the court considers that the question is one of general importance or is
one which for some other special reason should be considered by the Court of
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 Appeal.
Relevant provisions of the Singapore Arbitration Act, 2001:
No judicial review of award
47. The Court does not have jurisdiction to confirm, vary, set aside or remit
an award on an arbitration agreement except where so provided in
this Act.
Appeal against award
(8) On an appeal under this section, the Court may by order -
(a) confirm the award;
(b) vary the award;
(c) remit the award to the arbitral tribunal, in whole or in part, for
reconsideration in the light of the Court's determination; or
(d) set aside the award in whole or in part.
(9) The Court is not to exercise its power to set aside an award, in
whole or in part, unless it is satisfied that it would be inappropriate to
remit the matters in question to the arbitral tribunal for
reconsideration.
(Emphasis supplied)
179. The Act of 1940 in our country had an express power to modify. When the A&C
Act was enacted, for reasons best known to the legislature, the power was not
incorporated. Dr. T.K. Viswanathan Committee which examined reforms to the A&C Act
has recommended for the incorporation of the provision in its report but as yet the
legislature has not enacted a provision to modify. The relevant portions are extracted
herein below -
3.25.8 The Committee has examined the proposal to permit courts to modify or
vary an award, while setting aside such an award in exercise of its Section 34
jurisdiction. This is proposed to be achieved by amending Sub-section (2) and
Sub-section (2A) of Section 34.
3.25.9 Such orders must, however, be made only in exceptional circumstances
to meet the ends of justice. This will enable a Section 34 Court to provide a
quietus to the matter, so as to avoid further litigation. It is proposed to
substitute the words "set aside by the Court" with the words "set aside in whole
or in part by the Court" and add a proviso for partly varying the award in
exceptional circumstances.
3.25.10 The Committee feels that the proposed amendment will provide relief
to parties in situations where the findings in the arbitral award can be varied,
having regard to the arbitral records. Needless to state, any such modification
to the arbitral award can only be ordered by the Court if the strict parameters
for setting aside the arbitral award Under Section 34 of the Act are made out,
and there is no need to adduce fresh evidence.

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 3.25.11 An express provision incorporated in the Act is likely to streamline the
process, saving time, effort, and resources for all the parties involved. Thus,
granting the Courts the authority to modify awards within well-defined limits
would help strike a balance between preserving finality of the arbitral process
and ensuring fairness.
3.25.12 The Committee recommends amendment to Sub-sections (2) and (2A)
of Section 34 to substitute the words "set aside by the Court", with the words
"set aside in whole or in part by the Court" and to add the following proviso,
namely "Provided that in cases where the Court sets aside the arbitral award in
whole or in part, the Court may make consequential orders varying the award
only in exceptional circumstances to meet the ends of justice.
Recommendation
It is proposed to amend Section 34-
(i) to insert a new Sub-section(1A) to provide that an application for
setting aside an award Under Sub-section (1) shall be accompanied by
the original award and where the parties have not been given the
original award, they may file a copy of the award signed by the
arbitrators;
(ii) in Sub-section (2) - (a) for the words "An arbitral award may be set
aside by the Court", the words "An arbitral award may be set aside in
whole or in part by the Court" be substituted; (b) after Clause (b) and
before Explanation 1 the following proviso shall be inserted, namely:
Provided that in cases where the Court sets aside the arbitral award in
whole or in part, the Court may make consequential orders varying the
award only in exceptional circumstances to meet the ends of justice"
(iii) in Sub-section (2-A)- (a) for the words "An arbitral award arising
out of arbitrations other than international commercial arbitrations,
may also be set aside by the court", the words "An arbitral award
arising out of arbitrations other than international commercial
arbitrations, may also be set aside in whole or in part by the Court"
shall be substituted. (b) after the proviso the following proviso shall be
inserted namely: -
Provided further that in cases where the Court sets aside the
arbitral award in whole or in part, the Court may make
consequential orders varying the award only in exceptional
circumstances to meet the ends of justice
180. In a 2006 judgment of this Court in Mcdermott International Inc. (supra), itself
this Court expressly observed that there is no power in a Section 34 Court to modify.
The relevant passage from Mcdermott (supra) reads as follows:
52. The 1996 Act makes provision for the supervisory role of courts, for the
review of the arbitral award only to ensure fairness. Intervention of the court is
envisaged in few circumstances only, like, in case of fraud or bias by the
arbitrators, violation of natural justice, etc. The court cannot correct errors of
the arbitrators. It can only quash the award leaving the parties free to
begin the arbitration again if it is desired. So, the scheme of the
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 provision aims at keeping the supervisory role of the court at minimum
level and this can be justified as parties to the agreement make a
conscious decision to exclude the court's jurisdiction by opting for
arbitration as they prefer the expediency and finality offered by it.
(Emphasis supplied)
181. Notwithstanding the fact that there have been three occasions for the Parliament
to amend the A&C Act in 2015, 2019 and 2021, the power to modify has not been
incorporated. Hence, for the Court to read the power would be completely untenable
and the submissions on that score are rejected.
LEGAL MAXIMS - TO BE DEPLOYED AFTER ASCERTAINING CONTEXT:
182. It is apt to observe herein that mechanical deployment of the legal maxims unless
they apply on all fours to a case should be discouraged. Legal maxims, no doubt, are
very useful tools but its application has to be with great caution, for in law things are
not cut and dried and nicely weighed in all situations. There will be shades of grey and
sometimes legal maxims if deployed without adequate attention may lead to pitfalls.
Justice Benjamin Cardozo, in Berkey v. Third Avenue Railway Co., 244 N.Y, 84,
speaking of metaphors in law had the following caution to administer:
Metaphors in law are to be narrowly watched, for starting as devices to liberate
thought, they end often by enslaving it.
What Cardozo J. said of metaphors is equally true of legal maxims.
THE ARGUMENT ON INHERENT POWERS: -
183. Parties in support of the power to modify sought to seek refuge in Section 151 of
the Code of Civil Procedure which saved the inherent powers of the Court. Section 151
Code of Civil Procedure reads as under:
151. Saving of inherent powers of Court.-Nothing in this Code shall be deemed
to limit or otherwise affect the inherent power of the Court to make such orders
as may be necessary for the ends of justice or to prevent abuse of the process
of the Court.
184. The contention was that Section 34 recourse is taken in the normal Civil Courts as
defined in Section 2(e) of the A&C Act and those Courts being Civil Courts of Original
jurisdiction or the High Courts the inherent power vested in them should be available to
modify awards. There is no merit in this submission. As the discussion hereinabove
would reveal Section 34 is couched in clear terms and the parameters for setting aside
the award are clearly laid out in mandatory terms. Could inherent powers under Code of
Civil Procedure be exercised in a manner to be in conflict with the expressly provided
powers by the legislature? The answer has to be an emphatic 'No'. Almost six decades
ago, a four- Judge Bench of this Court in Manohar Lal Chopra v. Rai Bahadur Rao Raja
Seth Hiralal, 1961 SCC OnLine SC 17, speaking through Raghubar Dayal J. following the
holding in Padam Sen v. State of Uttar Pradesh, (1961) 1 SCR 884, made the following
telling observations:
21. A similar question about the powers of the Court to issue a commission in
the exercise of its powers Under Section 151 of the Code in circumstances not
covered by Section 75 and Order XXVI, arose in Padam Sen v. The State of
Uttar Pradesh (1) and this Court held that the Court can issue a commission in
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 such circumstances. It observed at page 887 thus:
The inherent powers of the Court are in addition to the powers
specifically conferred on the Court by the Code. They are
complementary to those powers and therefore it must be held that the
Court is free to exercise them for the purpose mentioned in Section 151
of the Code when the exercise of those powers is not in any way in
conflict with what has been expressly provided in the Code or
against the intentions of the Legislature.
These observations clearly mean that the inherent powers are not in any way
controlled by the provisions of the Code as has been specifically stated in
Section 151 itself. But those powers are not to be exercised when their
exercise may be in conflict with what had been expressly provided in
the Code or against the intentions of the Legislature. This restriction,
for practical purposes, on the exercise of these powers is not because
these powers are controlled by the provisions of the Code but because
it should be presumed that the procedure specifically provided by the
Legislature for orders in certain circumstances is dictated by the
interests of justices.
(Emphasis supplied)
Nothing more needs to be said on this aspect of the matter.
DOCTRINE OF IMPLIED POWERS:
185. Undeterred, an attempt was made to fall back upon the doctrine of implied powers
to somehow vest in Section 34 Court a power to modify the award. It is well settled that
if a statute conferring a power to be exercised on certain conditions, the conditions
prescribed are normally held to be mandatory and a power inconsistent with those
conditions is impliedly negatived. No doubt, there is a principle in law that a Court must
as far as possible adopt a construction which effectuates the legislative intent and
purpose and that an express grant of a statutory power carries with it by necessary
implication the authority to use all reasonable means to make such grant effective.
186. In Savitri v. Govind Singh Rawat, MANU/SC/0104/1985 : (1985) 4 SCC 337,
Justice E.S. Venkataramiah (as the learned Chief Justice then was) set out the principle
thus:
Every court must be deemed to possess by necessary intendment all such
powers as are necessary to make its orders effective. This principle is embodied
in the maxim "ubi aliquid conceditur, conceditur et id sine quo res ipsa esse
non potest" (Where anything is conceded, there is conceded also anything
without which the thing itself cannot exist). [Vide Earl Jowitt's Dictionary of
English Law, 1959 Edn., p. 1797.] Whenever anything is required to be
done by law and it is found impossible to do that thing unless
something not authorised in express terms be also done then that
something else will be supplied by necessary intendment. Such a
construction though it may not always be admissible in the present
case however would advance the object of the legislation under
consideration. A contrary view is likely to result in grave hardship to
the applicant, who may have no means passed to subsist until the
final order is passed.
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 (Emphasis supplied)
187. As is clear, the doctrine of implied powers is invoked to effectuate the final power.
Where it is impossible to effectuate the final power unless something not authorized in
express terms be also done, in such an event, the power will be supplied by necessary
intendment as an exception. The exceptional situation is to advance the object of the
legislation under consideration and to avoid grave hardship.
188. This doctrine has no application to the question under consideration herein. The
objects of the statute are very clear and have been elucidated hereinabove. The
difference between the normal judicial procedure and the arbitration process
contractually agreed upon with all its qualitative differences is also well established. No
implied power is needed to effectuate the final power provided Under Section 34 and,
as set out earlier, there is no impediment to exercise the final power. In the teeth of the
legislature expressly contemplating fresh arbitrations and other legal proceedings Under
Section 43(4), it cannot be said on some conjectured assumptions that hardship will
cause to the parties.
PARTY AUTONOMY:
189. It is time now to discuss the concept of party autonomy, which is the underlying
theme of the arbitration process. Gary B. Born, in his commentary "International
Commercial Arbitration", South Asian Reprint Edition published by Wolters Kluwer
discussed the concept of party autonomy in the following terms.
A further objective, and perceived advantage, of international commercial
arbitration is the effort to maximize party autonomy and provide
procedural flexibility. As discussed below, leading international arbitration
conventions and national laws accord parties broad autonomy to agree upon the
substantive laws and procedures applicable to "their" arbitrations. This
emphasis on the importance of party autonomy parallels applications of the
doctrine throughout the field of contemporary private international law, and
commercial law more generally, but has particular significance in the field of
international commercial arbitration. One of the principal reasons that this
procedural autonomy is granted is to enable the parties and arbitrators
to dispense with the technical formalities and procedures of national
court proceedings and instead fashion procedures tailored to particular
disputes. Thus, technically- complex disputes can include specialized
procedures for testing and presenting expert evidence, or "fast track"
procedures can be adopted where time is of the essence, or tailor-made dispute
resolution mechanisms can be adopted in particular commercial markets. More
generally, parties are typically free to agree upon the existence and scope of
discovery or disclosure, the modes for presentation of fact and expert evidence,
the length of the hearing, the timetable and other matters. The parties' ability to
adopt (or, failing agreement, the tribunal's power to prescribe) flexible
procedures is a central attraction of international arbitration - again, as
evidenced by empirical research and commentary.
(Emphasis Supplied)
190. As would be clear, party autonomy enables parties to dispense with technical
formalities and procedures of National Court proceedings, contractually. They agree to
abide by the terms of the statute regulating arbitration which they perceive as
advantageous. Having done so, they cannot be allowed to cry afoul, when it does not
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suit their needs and clamor for certain procedures which are legislatively not sanctioned
in the arbitration process and are available in the normal machinery of the Courts.
191. Further, as held earlier, a Section 34 Court cannot be invited to enter into the
merits. The limited recourse available is the one provided Under Section 34 and when
the Section is plain and clear the historical, textual and the contextual interpretation
does not permit the reading in of any implied power to expand the scope of Section 34.
192. The Judgment in Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd.,
MANU/SC/1609/2016 : (2017) 2 SCC 228 cited by learned Senior Counsel, Mr. Darius
Khambata that it is not always that acts not mentioned in the statute are impermissible
has no application herein. In that case, this Court was concerned with not any Statutory
Court procedure but with an appeal procedure mutually agreed upon by the parties in a
contract, which the Court sanctioned inter alia referring to principles of party autonomy.
CAN ARTICLE 142 POWERS BE EXERCISED TO MODIFY?
193. Parties have referred to cases where this Court in some cases exercised powers
Under Article 142 in modifying the award particularly the percentage of interest awarded
by the arbitrators. The aspect of award of interest is discussed hereinbelow, while
dealing with Section 34(4).
In this segment of the judgment the only question considered is whether power Under
Article 142 of the Constitution would be exercised by this Court to modify in any
manner an arbitral award when matters come up after initiation of proceedings Under
Section 34.
194. A Constitution Bench of this Court in Supreme Court Bar Association v. Union of
India and Anr. MANU/SC/0291/1998 : (1998) 4 SCC 409, while delving on the scope of
this Court's power Under Article 142, held that the power Under Article 142 cannot be
used to "supplant" substantive law applicable to the case or cause under consideration
of the Court. It has been held that express statutory provisions cannot be ignored and
Article 142 cannot be used to achieve indirectly what cannot be achieved directly. It has
been held that to balance the equities between conflicting claims of the litigating parties
"ironing out the creases" in a cause or matter before it could be done but, in no
circumstance will substantive statutory provision dealing with the subject matter be
given a go bye. It has been clarified that though the powers of this Court cannot be
controlled by any statutory provisions, however, when the exercise of power comes
directly in conflict with what has been expressly provided in a statute, the power Under
Article 142 is not to be exercised.
195. We need to do nothing more than to extract Para 47 and 48 of the judgment in
Supreme Court Bar Association (supra).
47. "The plenary powers of this Court Under Article 142 of the Constitution are
inherent in the Court and are complementary to those powers which are
specifically conferred on the Court by various statutes though are not limited by
those statutes. These powers also exist independent of the statutes with a view
to do complete justice between the parties. These powers are of very wide
amplitude and are in the nature of supplementary powers. This power exists as
a separate and independent basis of jurisdiction apart from the statutes. It
stands upon the foundation and the basis for its exercise may be put on a
different and perhaps even wider footing, to prevent injustice in the process of
litigation and to do complete justice between the parties. This plenary
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 jurisdiction is, thus, the residual source of power which this Court may draw
upon as necessary whenever it is just and equitable to do so and in particular
to ensure the observance of the due process of law, to do complete justice
between the parties, while administering justice according to law. There is no
doubt that it is an indispensable adjunct to all other powers and is free from the
restraint of jurisdiction and operates as a valuable weapon in the hands of the
Court to prevent "clogging or obstruction of the stream of justice". It, however,
needs to be remembered that the powers conferred on the Court by Article 142
being curative in nature cannot be construed as powers which authorise the
Court to ignore the substantive rights of a litigant while dealing with a cause
pending before it. This power cannot be used to "supplant" substantive law
applicable to the case or cause under consideration of the Court. Article 142,
even with the width of its amplitude, cannot be used to build a new edifice
where none existed earlier, by ignoring express statutory provisions dealing
with a subject and thereby to achieve something indirectly which cannot be
achieved directly. Punishing a contemner advocate, while dealing with a
contempt of court case by suspending his licence to practice, a power otherwise
statutorily available only to the Bar Council of India, on the ground that the
contemner is also an advocate, is, therefore, not permissible in exercise of the
jurisdiction Under Article 142. The construction of Article 142 must be
functionally informed by the salutary purposes of the article, viz., to do
complete justice between the parties. It cannot be otherwise. As already noticed
in a case of contempt of court, the contemner and the court cannot be said to
be litigating parties.
48. "The Supreme Court in exercise of its jurisdiction Under Article 142 has the
power to make such order as is necessary for doing complete justice "between
the parties in any cause or matter pending before it". The very nature of the
power must lead the Court to set limits for itself within which to exercise those
powers and ordinarily it cannot disregard a statutory provision governing a
subject, except perhaps to balance the equities between the conflicting claims
of the litigating parties by "ironing out the creases" in a cause or matter before
it. Indeed this Court is not a court of restricted jurisdiction of only dispute-
settling. It is well recognised and established that this Court has always been a
law- maker and its role travels beyond merely dispute-settling. It is a "problem-
solver in the nebulous areas" but the substantive statutory provisions dealing
with the subject-matter of a given case cannot be altogether ignored by this
Court, while making an order Under Article 142. Indeed, these constitutional
powers cannot, in any way, be controlled by any statutory provisions but at the
same time these powers are not meant to be exercised when their exercise may
come directly in conflict with what has been expressly provided for in a statute
dealing expressly with the subject.
196. Recently, a Constitution Bench of this Court, while sounding a note of caution on
the exercise of powers Under Article 142 in Shilpa Sailesh v. Varun Sreenivasan,
MANU/SC/0502/2023 : (2023) 14 SCC 231, had the following to say.
19. Given the aforesaid background and judgments of this Court, the plenary
and conscientious power conferred on this Court Under Article 142(1) of the
Constitution of India, seemingly unhindered, is tempered or bounded by
restraint, which must be exercised based on fundamental considerations of
general and specific public policy. Fundamental general conditions of public
policy refer to the fundamental rights, secularism, federalism, and other basic
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 features of the Constitution of India. Specific public policy should be
understood as some express pre- eminent prohibition in any substantive law,
and not stipulations and requirements to a particular statutory scheme. It
should not contravene a fundamental and non-derogable principle at the core of
the statute. Even in the strictest sense, it was never doubted or debated that his
Court is empowered Under Article 142(1) of the Constitution of India to do
"complete justice" without being bound by the relevant provisions of procedure,
if it is satisfied that the departure from the said procedure is necessary to do
"complete justice" between the parties.
197. A careful reading of the above paragraph reveals that the power Under Article 142
will not be exercised if it would contravene a fundamental and non-derogable principle
at the core of a statute. Further, it has been held that the power Under Article 142 is to
be tempered or bounded by restraint based on fundamental considerations of general
and specific public policy. Amplifying further, it was held that specific public policy
should be understood as some express pre- eminent prohibition in any substantive law
and not mere stipulations and requirements to a particular statutory scheme.
198. From the reasons stated in the earlier part of the judgment, it is crystal clear that
Courts exercising powers Under Section 34, which will include the appellate hierarchy
cannot change, vary, or qualify "arbitrary awards" as it strikes at the very core and root
of the ethos of the arbitration process. Such an exercise of power will derogate from the
core aspects of the A&C Act and will breach a pre-eminent prohibition in the said Act.
199. Apart from the above, if power is reserved for this Court to modify, at the fag end
of the litigation, contracting parties will have grave uncertainties as they would not be
sure of how the matter will play out when it reaches the apex Court. It will be
antithetical to arbitration as an alternative and efficacious mode of dispute resolution.
200. Hence, in matters arising out of Section 34 of the A&C Act, this Court will refrain
from exercising its power Under Article 142, in view of the law laid down in SCBA
(supra) and Shilpa Shailesh(supra).
LAYING DOWN GUARDRAILS FOR SECTION 34 - IS IT AN OPTION FOR THIS COURT?
201. Parties aspiring for the power to modify to be vested in Section 34 contend that
any possible abuse of power to modify, if vested in a Court hearing a Section 34
application, can be checked by prescription of guardrails. Learned Counsels have
contended that any modification or variation which inevitably flows from the Courts
determination of the question of law should be permitted. Equally, learned Counsels
contended that modification should be permitted to align the award with the contractual
provision. Counsels have referred to the theory of useless formality, where in certain
scenarios only one conclusion is possible and implore this Court to lay down parameters
for modification.
202. The contention is without merit. As has been rightly contended by the learned
Solicitor General, the situation here is not a situation akin to what arose in Vishaka
(supra). In Vishaka (supra) noticing the absence of any enacted law to provide for
effective enforcement of basic human rights of gender equality and guarantee against
sexual harassment and abuse at workplaces and in exercise of powers Under Article 32
for enforcement of fundamental rights, this Court, pending enactment of a statute, laid
down guidelines to prevent sexual harassment at the workplace. The interpretation of
the A&C Act is not akin to the situation that obtained in Vishaka (supra) and other cases
where recognising certain positive obligations in the State, this Court filled the gap by
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setting out guidelines. Further, as rightly contended by Mr. Gourab Banerji, learned
Senior Counsel, there are no judicially manageable standards and this Court cannot
venture into formulating guidelines as myriad situations will arise when Section 34
applications are heard before the appropriate Courts. Further, as rightly contended by
the learned Senior Counsel, it would amount to judicial legislation which we are loathe
to do. Learned Counsel for the parties, in support of their plea to lay down guardrails,
referred to a judgment of this Court in Oil and Natural Gas Corporation Limited v.
Afcons Gunanusa JV, 2022 SCC OnLine SC 1122. We have carefully examined the
judgment. That case concerned the rights of arbitrator(s) to unilaterally fix fees for their
sittings in arbitration. Negating the plea, the Court ruled that there was no sanction for
the same in terms of the A&C Act. The guidelines for ad-hoc arbitrations were only on
the modalities for arriving at the consensus and there was no deviation from the statute.
That case has no relevance here.
SUBMISSIONS BASED ON PECULIARITIES IN STATUTORY ARBITRATIONS:
203. Submissions were made that if power to modify is not recognised in Section 34,
enormous hardship will be caused in cases where the A&C Act has been made applicable
to some statutes. Example of the National Highways Authority Act was given. It was
contended that against the order awarding compensation for acquisition by the
competent authority, reference is made to the arbitrator appointed by the Central
Government and against his award only a recourse to Section 34 is available. The
contention was that, these are compulsory arbitrations and not consensual arbitrations.
Learned Senior Counsel Mr. Gourab Banerji, responded to this submission by arguing
that the interpretation to the A&C Act has to be uniform and if there are any maladies in
the other statutes by which arbitrators are appointed, the solution will have to be found
by addressing the grievances prevalent in those statutes and not by truncating the
interpretation of the A&C Act.
204. By no stretch of imagination can we bifurcate the interpretation of Section 34 and
offer one set of interpretations for commercial arbitrations and Anr. for statutory
arbitrations to which the A&C Act is applicable. Hence, the submission for a differential
interpretation of the A&C Act for some statutory arbitrations alone is rejected.
205. Equally, for this reason, the submissions of Mr. Darius Khambata, learned Senior
Counsel that power to modify be at least restricted to domestic arbitrations where
patent illegality is found in the award cannot be accepted. There is neither any scope
nor any legal basis for such a course of action to be adopted.
COMPLICATIONS DUE TO MODIFICATIONS IN NEW YORK CONVENTION AWARDS:
206. Mr. Gourab Banerji, learned Senior Counsel and Mr. Gaurav Pachnanda, learned
Senior Counsel drew the attention of this Court to certain specific statutory provisions
obtaining in the UK, Singapore, New Zealand and Kenya. This was to drive home the
point that not only were there express provisions to modify awards in those statutes by
the Court hearing the setting aside application, there are also express provisions
recognising that the award will hitherto be read in the modified form. Learned Senior
Counsels contended that in the absence of similar statutory regime serious
complications will arise in enforcement of New York Convention awards and will
constitute a serious threat to India seated arbitrations under the New York Conventions.
207. In particular, attention was drawn to Section 71 of the UK English Arbitration Act
which we deem it appropriate to set out hereinbelow:

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 71. Challenge or appeal: effect of order of court.
(1) The following provisions have effect where the court makes an order Under
Section 67, 68 or 69 with respect to an award.
(2) Where the award is varied, the variation has effect as part of the tribunal's
award.
(3) Where the award is remitted to the tribunal, in whole or in part, for
reconsideration, the tribunal shall make a fresh award in respect of the matters
remitted within three months of the date of the order for remission or such
longer or shorter period as the court may direct.
(4) Where the award is set aside or declared to be of no effect, in whole or in
part, the court may also order that any provision that an award is a condition
precedent to the bringing of legal proceedings in respect of a matter to which
the arbitration agreement applies, is of no effect as regards the subject matter
of the award or, as the case may be, the relevant part of the award.
(Emphasis supplied)
208. It will be noticed that in the United Kingdom and certain other countries, clear
statutory provisions exist stating that where the award is varied the variation has the
effect as part of the Tribunal's award. It will be noticed that to give effect to the New
York Convention, like the A&C Act has provisions in Part II, several other countries have
also adopted statutory provisions for recognition and enforcement of foreign awards.
Learned Senior Counsels submit that if the award is modified by the Section 34 Court in
India, any enforcement brought abroad will run into complications as objections will be
taken that what is sought to be enforced is not the award but the judgment of the Court.
There is merit in the submission and this is one another reason why these matters are
best left for the legislature to be comprehensively addressed. Enforcement of foreign
judgements and enforcement of foreign awards are distinct legal concepts and hence,
the argument cannot be characterized as not convincing jurisprudentially or in principle.
209. Learned Senior Counsel, Mr. Gaurav Pachnanda, pressed the argument that when
a Section 34 Court passes an order there is no application of the doctrine of merger.
This Court in Kunhayammed and Ors. v. State of Kerala and Anr. MANU/SC/0432/2000 :
(2000) 6 SCC 359, has discussed the doctrine of merger and held that doctrine of
merger is not a doctrine of universal or unlimited application.
210. Considering the holding in this judgment that there is no power Under Section 34
court to modify, in the absence of a statutory enablement, it is not considered necessary
to go into the aspect of the applicability of the Doctrine of merger.
IS HAKEEM (SUPRA) PER INCURIAM?
211. In National Insurance Co. Ltd. v. Pranay Sethi and Ors. MANU/SC/1366/2017 :
(2017) 16 SCC 680, a Constitution Bench of this Court held as follows: a decision or
judgment can be per incuriam if any provision in a statute, Rule or Regulation was not
brought to the notice of the court. (Para 28) It was also held that a decision or
judgment can be per incuriam if it is not possible to reconcile its ratio with that of a
previously pronounced judgement of a co-equal or a larger bench. We find that the
judgement in Hakeem (supra) has rightly interpreted the provisions of A&C Act and is in
no manner conflict with any ratio of a co-equal or larger Bench. In the earlier parts of

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the judgement, we have distinguished the other judgements referred to in the referral
order. Hakeem (supra) itself distinguished certain other earlier pronouncements. We
find Hakeem (supra) will now be read in accordance with the ratio laid down in the
present judgment.
212. Reliance was placed on Oil and Natural Gas Corporation Ltd. v. Western Geco
International Ltd., MANU/SC/0772/2014 : (2014) 9 SCC 263, to contend that Hakeem
(supra) did not consider the said judgment. It was argued that power to modify in
Section 34 Court was recognised in Western Geco (supra). A close reading of Para 40 of
Western Geco (Supra), indicates that though the word 'modified' occurs in the
judgment, it was clearly in the context of severability, an aspect Hakeem (supra) was
not concerned with. Hence, it cannot be said that Hakeem (supra) is per incuriam for
not noticing Western Geco (supra). The other judgments prior to Hakeem (supra) have
not discussed the aspect whether power to modify exists in a Section 34 Court. Hence,
we reject the argument of parties that Hakeem (supra) is per incuriam. Hakeem (supra)
insofar as it held that a Section 34 Court has no power to modify the award, is not per
incuriam.
POWERS UNDER SECTION 33 AND 34 (4) OF THE A&C ACT - THE 'SAFETY VALVES':
213. As to what errors could be corrected and how it could be done has been first
provided for in Section 33 of the A&C Act. Section 33 deals with correction and
interpretation of award and making of additional award by the arbitrator. The provision
has already been discussed in the earlier part of this judgment. Section 33(i)(a) deals
with correction of computation error, clerical or typographical error or any other error of
a similar nature occurring in the award. This provision is akin to Section 15 (b) and (c)
of the 1940 Act. Power is also there in the arbitral Tribunal to Suo Moto correct these
errors. Even in the Code of Civil Procedure, Section 152 provides for a similar power for
the Courts. Section 152 is set out hereinbelow:
1 5 2 . Amendment of judgments, decrees or orders.-Clerical or arithmetical
mistakes in judgments, decrees or orders or errors arising therein from any
accidental slip or omission may at any time be corrected by the Court either of
its own motion or on the application of any of the parties.
214. Even if any claim is not adjudicated, parties could move to arbitral Tribunal for
the same and an additional award can be made.
215. Now turning to Section 34(4), it reads as follows:
34.(4) On receipt of an application Under Sub-section (1), the Court may,
where it is appropriate and it is so requested by a party, adjourn the
proceedings for a period of time determined by it in order to give the arbitral
tribunal an opportunity to resume the arbitral proceedings or to take such other
action as in the opinion of arbitral tribunal will eliminate the grounds for setting
aside the arbitral award.
Section 34(4) occurs in sequence after 34(1), 34(2), 34(2A), 34(3). After recourse is
made Under Section 34(1) and the Court has applied the rigors of 34(1), (2), (2A), the
Court would be fairly clear as to whether any ground has been made out for setting
aside the arbitral award or not. At this stage, Section 34(4) comes into the picture and
provides that:
(i) On receipt of an application Under Sub-section (1), the Court may;
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 (ii) Where it is appropriate and it is so requested by a party;
(iii) Adjourn the proceedings for a period of time determined by it;
(iv) In order to give the arbitral Tribunal an opportunity;
(v) To resume the arbitral proceedings or to take such other action as in the
opinion of arbitral Tribunal will eliminate the grounds for setting aside the
arbitral award.
216. It must be noticed that all that the Section mentions is a request being made and
there is no prescription that the request should be in writing. In this regard, the holding
in Kinnari Mullick and Anr. v. Ghanshyam Das Damani, MANU/SC/0514/2017 : (2018)
11 SCC 328 to the effect that discretion available Under Section 34(4) to give an
opportunity to the arbitrator can be exercised only upon a written application made in
that behalf by a party is not the correct legal position. To that extent Kinnari Mullick
(supra) does not lay down the correct law.
217. It cannot be disputed that ordinarily the stage of Section 34(4) would arise when
the Court has put the award through the test of fire under the prior clauses of Section
34 and entertains the opinion that there are grounds for setting aside the arbitral award.
At this stage, in given cases where it considers appropriate and a request is made by a
party even orally, the Court may adjourn the proceeding for a period of time in order to
give the arbitral Tribunal an opportunity to resume the arbitral proceeding or to take
such other action as in the opinion of the arbitral Tribunal will eliminate the grounds for
setting aside the award. The Court shall in the order indicate its reasons for entertaining
the opinion and as to why it considers that there are grounds for setting aside the
arbitral award. Ordinarily, it will be the award holder, who will be the Respondent in the
Section 34 application, who will be interested in sustaining the award. The very fact
that he is stoutly defending the award is a clear indication that he wants the award to
be sustained and grounds, if any, which exist to set aside the award are eliminated.The
grounds may be of different hues.
218. To illustrate, Section 31 which speaks of form and contents of the arbitral award
has the following prescription: (i) The award shall be signed by the members of the
Tribunal. (ii) The award shall state the reasons. (iii) The award shall state the date and
place of arbitration. (iv) The costs of the arbitration to be fixed in accordance with
Section 31(A). (v) The award may deal with disputes not contemplated or falling within
the terms of the submissions to arbitration. (vi) The award may have decision on
matters beyond the scope of submissions of arbitration. In a given case any of the
above aspects could be attracted.
219. The above are only illustrative aspects. This Court in I-Pay Clearing Services (P)
Ltd. v. ICICI Bank Ltd., MANU/SC/0005/2022 : (2022) 3 SCC 121 quoted the decisions
in Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., MANU/SC/1765/2019 : (2019)
20 SCC 1 and Som Datt Builders Ltd. v. State of Kerala, MANU/SC/1635/2009 : (2009)
10 SCC 259 and held as follows:
34. In the judgment in Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd.
[Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., MANU/SC/1765/2019 :
(2019) 20 SCC 1], it was a case where there was no inquiry Under Section
34(4) of the Act and in the said case, this Court has held that the legislative
intention behind Section 34(4) of the Act, is to make the award enforceable,
after giving an opportunity to the Tribunal to undo the curable defects. It was
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 not a case of patent illegality in the award, but deficiency in the award due to
lack of reasoning for a finding which was already recorded in the award. In the
very same case, it is also clearly held that when there is a complete perversity
in the reasoning, then the same is a ground to challenge the award Under
Section 34(1) of the Act.
35. Som Datt Builders Ltd. v. State of Kerala [Som Datt Builders Ltd. v. State
of Kerala, MANU/SC/1635/2009 : (2009) 10 SCC 259: (2009) 4 SCC (Civ) 153]
is also a case where no reasons are given for the finding already recorded in
the award, as such, this Court held that in view of Section 34(4) of the Act, the
High Court [State of Kerala v. Somdatt Builders Ltd. Arbitration Appeal No. 16
of 2005, order dated 3-6-2005 (Ker)] ought to have given the Arbitral Tribunal
an opportunity to give reasons.
In para 37 to 43 in I-Pay (supra), this Court held as under:
37. In our view, Section 34(4) of the Act can be resorted to record reasons
on the finding already given in the award or to fill up the gaps in the
reasoning of the award. There is a difference between "finding" and
"reasons" as pointed out by the learned Senior Counsel appearing for the
Respondent in the judgment in ITO v. Murlidhar Bhagwan Das [ITO v. Murlidhar
Bhagwan Das MANU/SC/0097/1964 : AIR 1965 SC 342]. It is clear from the
aforesaid judgment that "finding is a decision on an issue". Further, in the
judgment in J. Ashoka v. University of Agricultural Sciences [J. Ashoka v.
University of Agricultural Sciences, MANU/SC/1613/2016 : (2017) 2 SCC 609:
(2017) 1 SCC (L&S) 517], this Court has held that "reasons are the links
between the materials on which certain conclusions are based and the actual
conclusions".
38. In absence of any finding on Point 1, as pleaded by the Respondent and
further, it is their case that relevant material produced before the arbitrator to
prove "accord and satisfaction" between the parties, is not considered, and the
same amounts to patent illegality, such aspects are to be considered by the
Court itself. It cannot be said that it is a case where additional reasons are to
be given or gaps in the reasoning, in absence of a finding on Point 1 viz.
"whether the contract was illegally and abruptly terminated by the
Respondent?".
39. Further, Section 34(4) of the Act itself makes it clear that it is the
discretion vested with the Court for remitting the matter to Arbitral
Tribunal to give an opportunity to resume the proceedings or not. The
words "where it is appropriate" itself indicate that it is the discretion
to be exercised by the Court, to remit the matter when requested by a
party. When application is filed Under Section 34(4) of the Act, the same is to
be considered keeping in mind the grounds raised in the application Under
Section 34(1) of the Act by the party, who has questioned the award of the
Arbitral Tribunal and the grounds raised in the application filed Under Section
34(4) of the Act and the reply thereto.
40. Merely because an application is filed Under Section 34(4) of the Act by a
party, it is not always obligatory on the part of the Court to remit the matter to
Arbitral Tribunal. The discretionary power conferred Under Section 34(4) of the
Act, is to be exercised where there is inadequate reasoning or to fill up the gaps

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 in the reasoning, in support of the findings which are already recorded in the
award.
4 1 . Under the guise of additional reasons and filling up the gaps in the
reasoning, no award can be remitted to the arbitrator, where there are no
findings on the contentious issues in the award. If there are no findings on the
contentious issues in the award or if any findings are recorded ignoring the
material evidence on record, the same are acceptable grounds for setting aside
the award itself. Under the guise of either additional reasons or filling up the
gaps in the reasoning, the power conferred on the Court cannot be relegated to
the arbitrator. In absence of any finding on contentious issue, no amount of
reasons can cure the defect in the award.
42. A harmonious reading of Sections 31, 34(1), 34(2-A) and 34(4) of
the Arbitration and Conciliation Act, 1996, make it clear that in
appropriate cases, on the request made by a party, Court can give an
opportunity to the arbitrator to resume the arbitral proceedings for
giving reasons or to fill up the gaps in the reasoning in support of a
finding, which is already rendered in the award. But at the same time,
when it prima facie appears that there is a patent illegality in the award itself,
by not recording a finding on a contentious issue, in such cases, Court may not
accede to the request of a party for giving an opportunity to the Arbitral
Tribunal to resume the arbitral proceedings.
4 3 . Further, as rightly contended by the learned Counsel appearing for the
Respondent, that on the plea of "accord and satisfaction" on further
consideration of evidence, which is ignored earlier, even if the Arbitral Tribunal
wants to consciously hold that there was "accord and satisfaction" between the
parties, it cannot do so by altering the award itself, which he has already
passed.
(Emphasis supplied)
It is clear from the above that the power to remit Under Section 34(4) can be exercised
for undoing the curable defects.
AWARD OF INTEREST- USE OF SECTION 34(4) POWER:
220. Equally, in a given case where the Court feels that interest has not been awarded
or interest beyond the terms of the agreement have been awarded or excessive interest
have been awarded or abysmally low interest is awarded, the Court Under Section 34
cannot modify the interest. The course of action to be adopted would be to record
reasons in the order and remit the matter to the arbitrator for the arbitral Tribunal to
make the necessary course correction. It is true that if only on account of interest if
awards are to be set aside, the whole exercise will have to be undertaken again. If the
Court in a Section 34 proceeding (which will include the courts in that appellate
hierarchy) is of the opinion that interest aspect needs a relook, the correct course of
action to be adopted is to remit the matter Under Section 34(4) for the purpose of
enabling the arbitrator to take a call. If thereafter again, when the matter comes back to
the Court, the Court feels that the grounds for setting aside the award are not
eliminated, it will have no choice except to set aside the award.
SUO MOTO EXERCISE OF THE SECTION 34(4) POWER:

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221. Section 34(4) is the safety valve provided in the A&C Act by the legislature to
prevent awards being set aside and to offer a chance to the arbitral Tribunal to adopt a
course correction. In this regard, considering the purpose for which Section 34(4) was
intended, and since the Respondent is defending the award and attempting to sustain it,
if the Court deems it appropriate after arriving at an opinion with reasons recorded in
writing, that there exists ground for setting aside the arbitral award the Court is even
Suo Moto empowered to invoke powers Under Section 34(4) in accordance with the
parameters set out hereinabove. There is nothing in Section 34(4) which detracts from
such an interpretation. There will be on record an application Under Section 34(1) by
the applicant to set aside the award and the award holder invariably is stoutly defending
the award and is straining every nerve to uphold the same. After the court has passed
through the motions of Section 34(2)(a) (b) and 2 A, it would have arrived at an
opinion as to whether the award is susceptible or whether it is sustainable. If it arrives
at an opinion that the award is vulnerable and the threat of setting aside is looming
large and if within the parameters laid down in Section 34(4) the grounds for setting
aside can be eliminated - the case is appropriate and time is ripe for exercise of power
Under Section 34(4). The need for an application oral or in writing is really directory
and does not militate against the exercise of Suo Moto powers in given cases by the
Court.
COMPUTATION, CLERICAL AND TYPOGRAPHICAL ERROR OR ANY OTHER ERROR OF
SIMILAR NATURE - ACTUS CURIAE NEMINEM GRAVABIT PRINCIPLE:
2 2 2 . Section 33 enables parties to move the Arbitral Tribunal to correct any
computational error, any clerical error or typographical error or any other errors of
similar nature. Section 33(3) enables the arbitral Tribunal itself to correct any of those
errors. No doubt, a time limit of 30 days has been prescribed for the parties to move
unless there is a contract to the contrary. Equally, Sub-Section 2 of Section 33 directs
that the correction should be made within 30 days and Sub-Section 6 of Section 33
states that the arbitral Tribunal may if necessary extend the period of time within which
it shall make a correction.
223. In this regard, it is useful to refer to the recent judgment of this Court in North
Delhi Municipal Corporation v. M/S.S.A. Builders Ltd., 2024 INSC 988, wherein it was
held as under:
45.1. As per Sub-section (1), within 30 days from the date of receipt of the
arbitral award, a party with notice to the other party, may request the arbitral
tribunal to correct any computation errors, any clerical or typographical errors
or any other errors of a similar nature occurring in the award. Further, if the
parties agree, a party with notice to the other party, may request the arbitral
tribunal to give an interpretation of a specific point or part of the award. The
period of 30 days contemplated Under Sub-section (1) may stand extended to
another period of time if agreed upon by the parties. Therefore, ordinarily the
time limit for correction of errors or for interpretation of a specific point or part
of the award is 30 days from the date of receipt of the arbitral award.
However, the limitation of 30 days can be waived for another period of
time, if agreed upon by the parties. Question for consideration is what
would be the contours of the expression unless another period of time has been
agreed upon by the parties, as appearing in Sub-section (1) of Section 33.
45.2. Sub-section (7) of Section 33 clarifies that correction or interpretation of
arbitral award or passing of additional arbitral award would attract Section 31

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 of the 1996 Act as discussed supra. Therefore, the language of Sub-section (1)
of Section 33 makes it abundantly clear that the period of 30 days as provided
in Section 33(1) is not an inflexible period. If the parties agree, the said period
can be extended.
45.3. There is no dispute to the proposition of law laid down in Harshad
Chiman Lal Modi (supra), relied upon by the Appellant, that where a court has
no jurisdiction over the subject matter of the suit by reason of any limitation
imposed by the statute, charter or commission, it cannot take up the cause or
matter; an order passed by the court having no such jurisdiction is a nullity.
Question is whether such a proposition would have any application to the facts
and circumstances of the present case. As we have seen, there was no embargo
on the Arbitral Tribunal to exercise jurisdiction over the subject matter. The
only limitation was that the correction and/or interpretation of the
award should be done within 30 days from the date of receipt of the
arbitral award unless another period of time has been agreed upon by
the parties. Therefore, the expression unless another period of time
has been agreed upon by the parties assumes critical significance.
(Emphasis supplied)
224. With regard to computational errors, clerical or typographical error or any other
error of similar nature - (the expression any other error of similar nature will be read
ejusdem generis and will apply to errors similar to computational errors, clerical or
typographical errors), what should be the course of action if the party has not moved
Under Section 33 or having moved the arbitrator has mechanically rejected the
correction?
225. With regard to Section 152 Code of Civil Procedure, this Court after holding that
Section 152 is founded on the maxim - actus curiae neminem gravabit speaking through
Dr. Arijit Pasayat J. in U.P. SRTC v. Imtiaz Hussain, MANU/SC/2406/2005 : (2006) 1
SCC 380 lucidly explained the position thus.
8. The basis of the provision Under Section 152 of the Code is founded
on the maxim "actus curiae neminem gravabit" i.e. an act of court
shall prejudice no man. The maxim "is founded upon justice and good
sense; and affords a safe and certain guide for the administration of
the law", said Cresswell, J. in Freeman v. Tranah [12 CB 406: 138 ER
964] (ER p. 967). An unintentional mistake of the court which may
prejudice the cause of any party must and alone could be rectified. In
Master Construction Co. (P) Ltd. v. State of Orissa[(1966) 3 SCR 99:
MANU/SC/0304/1965 : AIR 1966 SC 1047] it was observed that the
arithmetical mistake is a mistake of calculation, a clerical mistake is a
mistake in writing or typing whereas an error arising out of or
occurring from accidental slip or omission is an error due to careless
mistake on the part of the court liable to be corrected. To illustrate this
point it was said that in a case where the order contains something which is not
mentioned in the decree, it would be a case of unintentional omission or
mistake as the mistake or omission is attributable to the court which may say
something or omit to say something which it did not intend to say or omit. No
new arguments or rearguments on merits can be entertained to
facilitate such rectification of mistakes. The provision cannot be
invoked to modify, alter or add to the terms of the original order or
decree so as to, in effect, pass an effective judicial order after the
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 judgment in the case.
(Emphasis supplied)
226. Ordinarily errors of the nature set out above like computational error, clerical or
typographical error or any other error of a similar nature would not be objected by
other party. However, in the unlikely event of an objection and in a scenario where the
arbitrator has not been moved Under Section 33 or having moved the Arbitral Tribunal
has been obstinate in not correcting, a Court in Section 34 to uphold the maxim actus
curiae neminem gravabit can invoke the power and correct computational errors, clerical
or typographical errors or any other errors of similar nature without modifying, altering
or adding to the original award. It should not be forgotten that Under Section 35 finality
is granted to the arbitral awards subject to the provisions in part I and Under Section 36
where the time for making an application to set aside the arbitral award Under Section
34 has expired, then subject to the provisions of Sub-Section 2 such award shall be
enforced in accordance with the provisions of the Code of Civil Procedure in the same
manner as it were a decree of the Court. Hence, a limited exception alone to the holding
in Hakeem (supra) is made.
SEVERABILITY UNDER SECTION 34:
227. If there was one aspect on which there was a chorus among the rival factions, it
was on the aspect of Section 34 Court having power to sever that part of the award
which fell foul of Section 34 from the good part.
228. According to P. Ramanatha Aiyar's Advanced Law Lexicon (third edition):
Sever - 'to separate; to insist upon a plea distinct from that of other co-
defendants; to disjoin and
severable - 'capable to being separated',
A bare perusal of Section 34 indicates that the power to sever an award is recognised in
Section 34(2)(a)(iv) which reads as under.
34(2)(a)(iv). the arbitral award deals with a dispute not contemplated by or not
falling within the terms of the submission to arbitration, or it contains decisions
on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be
separated from those not so submitted, only that part of the arbitral award
which contains decisions on matters not submitted to arbitration may be set
aside;
229. A reading of the above Sub-section reveals that where the arbitral award deals
with disputes not contemplated by or not falling within the terms of the submission to
arbitration or it contains decision on matters beyond the scope of the submission to
arbitration, the award can be set aside.
2 3 0 . However, the proviso states that if the decisions on matters submitted to
arbitration can be separated from those not so submitted, only that part of the arbitral
award which contains decisions on matters not submitted to arbitration may be set
aside.
231. So, severance as a concept is recognised intrinsically in Section 34 itself on the
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aspect mentioned hereinabove. But the question is when there are several claims
adjudicated and if awards on a few claims fall foul of Section 34 and if each of the
claims which fall foul of Section 34 are capable of separation could the awards on those
claims be set aside? This issue was not discussed in Hakeem (supra). However, the
consistent view of this Court has been that such standalone claims falling foul of
Section 34 can be set aside as long as they are capable of being severed without
affecting the other parts of the award. In other words, if the claims falling foul of
Section 34 are not inseparably intertwined with the good portion of the award, the
award can be severed.
232. In J.G. Engineers (P) Ltd. v. Union of India and Anr., MANU/SC/0527/2011 :
(2011) 5 SCC 758, R.V. Raveendran J. speaking for the Court clearly set out the
principle as follows:
25. It is now well settled that if an award deals with and decides several claims
separately and distinctly, even if the court finds that the award in regard to
some items is bad, the court will segregate the award on items which did not
suffer from any infirmity and uphold the award to that extent. As the award on
Items 2, 4, 6, 7, 8 and 9 was upheld by the civil court and as the High Court in
appeal did not find any infirmity in regard to the award on those claims, the
judgment of the High Court setting aside the award in regard to Claims 2, 4, 6,
7, 8 and 9 of the Appellant, cannot be sustained. The judgment to that extent is
liable to be set aside and the award has to be upheld in regard to Claims 2, 4,
6, 7, 8 and 9.
233. This Court in Madhya Pradesh Power Generation Company (supra) had severed the
award with regard to the return of amounts ordered on the Bank guarantees dated
22.02.2000 and 23.02.2000 which pertained towards the amount advanced by the
award debtor therein.
2 3 4 . During the course of the submissions, the concern expressed by the several
learned Counsels were that severability should be carefully invoked and the exorcised
portion of the award should not be inseparably intertwined with the other portions
which are upheld and ought not to be inter dependent on the good parts of the award.
The further concern expressed was that the Section 34 Court wanting to sever portions
of the award should perform an exercise to see whether the good part of the award can
be separately identified both in terms of variability and quantum without any co-relation
to the bad parts of the award. The submission was that if the good parts are
intermingled with the bad parts of the award in a manner that it is impossible to sever
the bad parts, the principle of severability cannot be applied. Mr. Gaurav Pachnanda,
learned Senior Counsel illustrated the submission by submitting that if a final award is
arrived by netting off claims and counter claims, principles of severability cannot be
applied as what is available in the award was a composite award with a single amount
mentioned therein enforceable by the successful party. There is merit in this submission
and such prerequisites are essential while severing parts of the award.
235. A Full Bench of the High Court of Judicature at Bombay, in R.S. Jiwani v. Ircon
International Ltd., 2009 SCC OnLine Bom 2021, held as under.
2 0 . The cases would be different where it is not possible or permissible to
sever the award. In other words, where the bad part of the award was
intermingled and interdependent upon the good parts of the award there it is
practically not possible to sever the award as the illegality may affect the award

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 as a whole. In such cases, it may not be possible to set aside the award
partially. However, there appears to be no bar in law in applying the doctrine of
severability to the awards which are severable.
236. Sanjay Kumar J., (as His Lordship then was) in the High Court of Judicature at
Hyderabad for the State of Telangana in Saptarishi Hotels Pvt. Ltd. v. National Institute
of Tourism & Hospitality Management, 2019 SCC OnLine TS 1765, following J.G.
Engineers (supra) held as follows.
3 3 . In J.G. ENGINEERS PVT. LTD. v. UNION OF INDIA, the Supreme Court
observed that it is now well settled that if an Award deals with and decides
several claims separately and distinctly and if such Award is found to be bad in
regard to some items, the Court would be entitled to segregate the Award on
the items which did not suffer from any infirmity so that it could be upheld to
that extent.
237. A learned Single Judge of the Delhi High Court addressing the issue of severability
in National Highways Authority of India v. Trichy Thanjavur Expressway Ltd., 2023 SCC
OnLine Del 5183, set out the principle thus.
3 8 . In our considered opinion, therefore, the answer to the question which
stands posed would have to be rendered on an interpretation of the phrase
"setting aside" as ultimately adopted and forming part of Section 34. As was
noticed hereinbefore, Section 34(2)(a)(iii) does speak of an award being set
aside in part. We find that the key to understanding the intent underlying the
placement of the Proviso in sub- Clause (iv) of Section 34(2)(a) is in the nature
of the grounds for setting aside which are spoken of in Clause (a). As would be
manifest from a reading of the five sub-clauses which are positioned in Section
34(2)(a), those constitute grounds which would strike at the very heart of the
arbitral proceedings. The grounds for setting aside which are set forth in Clause
(a) strike at the very foundation of validity of arbitration proceedings. Sub-
clauses (i) to (v) thus principally constitute grounds which would render the
arbitration proceedings void ab initio. Although the Section 34(2)(a)(iv) ground
for setting aside also falls in the same genre of a fundamental invalidity, the
Legislature has sought to temper the potential fallout of the award being set
aside in toto on that score. The Proviso to sub- Clause (iv) seeks to address a
comprehensibly conceivable situation where while some parts of the award may
have dealt with non-arbitrable issues or disputes falling outside the scope of
the reference, its other components or parts constitute an adjudication which
could have been validly undertaken by the AT. The Proviso thus seeks to
address such a situation and redeems as well as rescues the valid parts of an
award. This saves the parties from the spectre of commencing arbitral
proceedings all over and from scratch in respect of all issues including those
which could have validly formed part of the arbitration.
3 9 . The grounds for setting aside encapsulated in Section 34(2)(b) on the
other hand relate to the merits of the challenge that may be raised in respect of
an award and really do not deal with fundamental invalidity. However, the mere
fact that the Proviso found in Sub-clause (iv) of Section 34(2)(a) is not
replicated or reiterated in Clause (b) of that provision would not lead one to
conclude that partial setting aside is considered alien when a court is
considering a challenging to an award on a ground referable to that clause. In
fact, the Proviso itself provides a befitting answer to any interpretation to the

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 contrary. The Proviso placed in Section 34(2)(a)(iv) is not only an
acknowledgment of partial setting aside not being a concept foreign to the
setting aside power but also of parts of the award being legitimately viewed as
separate and distinct. The Proviso itself envisages parts of an award being
severable, capable of segregation and being carved out. The Proviso is, in fact,
the clearest manifestation of both an award being set aside in part as well as an
award comprising of distinct components and parts.
4 0 . Undoubtedly, an award may comprise a decision rendered on multiple
claims. Each claim though arising out of a composite contract or transaction
may be founded on distinct facts and flowing from separate identifiable
obligations. Just as claims may come to be preferred resting on a particular
contractual right and corresponding obligation, the decision which an AT may
render on a particular claim could also be based on a construction of a
particular covenant and thus stand independently without drawing sustenance
on a decision rendered in the context of another. If such claims be separate,
complete and self-contained in themselves, any decision rendered thereon
would hypothetically be able to stand and survive irrespective of an invalidity
which may taint a decision on others. As long as a claim is not subordinate, in
the sense of being entwined or interdependent upon another, a decision
rendered on the same by the AT would constitute an award in itself. While
awards as conventionally drawn, arranged and prepared may represent an
amalgam of decisions rendered by the AT on each claim, every part thereof is,
in fact, a manifestation of the decision rendered by it on each claim that may be
laid before it. The award rendered on each such claim Rules on the entitlement
of the claimant and the right asserted in that regard. One could, therefore,
validly, subject of course to the facts of a particular case, be entitled to view
and acknowledge them as binding decisions rendered by the AT on separate
and distinct claims.
41. The Court notes in this regard that Mr. Mukhopadhaya, Mr. Rajshekhar Rao,
learned senior Counsels as well as Mr. Ashim Sood had urged that while an
award as ultimately rendered may contain findings on numerous claims, the
decision rendered in respect of each such claim is entitled to be viewed as an
award in itself. This, according to learned Counsels, clearly flows from the
power of the AT to not just render a final award but also and in the course of
arbitral proceedings render interim awards in respect of various claims. It was
rightly pointed out by learned Counsels that each such decision on a claim
could stand independently and be final and binding in itself. Those findings or
decisions in relation to various claims that stand placed before the AT may each
constitute an award itself and the operative directions framed representing the
disposition of all such claims. As was rightly contended by Mr. Mukhopadhaya,
the declaration with respect to entitlement and the award of a money claim
consequent thereto would be liable to be viewed as independent Arbitral
Awards. Mr. Sood had chosen to describe such a disposition of claims as being
an "agglomeration" of awards. The Court accords its emphatic and
wholehearted acceptance to the aforenoted submissions and comes to the
conclusion that an award is thus liable to be viewed and understood
accordingly. It thus comes to conclude that each such decision rendered by an
AT could be validly viewed as the decision rendered on a particular claim and
thus constituting an independent award in itself.
42. Once an award is understood as comprising of separate components, each
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 standing separately and independent of the other, there appears to be no hurdle
in the way of courts adopting the doctrine of severability and invoking a power
to set aside an award partly. The power so wielded would continue to remain
one confined to "setting aside" as the provision bids one to do and would thus
constitute a valid exercise of jurisdiction Under Section 34 of the Act.
Conclusion:
G. Undoubtedly, an award may comprise a decision rendered on multiple
claims. Each claim though arising out of a composite contract or transaction
may be founded on distinct facts and flowing from separate identifiable
obligations. Just as claims may come to be preferred resting on a particular
contractual right and corresponding obligation, the decision which an AT may
render on a particular claim could also be based on a construction of a
particular covenant and thus stand independently without drawing sustenance
on a decision rendered in the context of another. If such claims be separate,
complete and self-contained in themselves, any decision rendered thereon
would hypothetically be able to stand and survive irrespective of an invalidity
which may taint a decision on others. As long as a claim is not subordinate, in
the sense of being entwined or interdependent upon another, a decision
rendered on the same by the AT would constitute an award in itself.
H. While awards as conventionally drawn, arranged and prepared may represent
an amalgam of decisions rendered by the AT on each claim, every part thereof
is, in fact, a manifestation of the decision rendered by it on each claim that may
be laid before it. The award rendered on each such claim Rules on the
entitlement of the claimant and the right asserted in that regard. One could,
therefore, validly, subject of course to the facts of a particular case, be entitled
to view and acknowledge them as binding decisions rendered by the AT on
separate and distinct claims.
I. Once an award is understood as consisting of separate components, each
standing separately and independent of the other, there appears to be no hurdle
in the way of courts adopting the doctrine of severability and invoking a power
to set aside an award partly. The power so wielded would continue to remain
one confined to "setting aside" as the provision bids one to do and would thus
constitute a valid exercise of jurisdiction Under Section 34 of the Act.
L. The power to partially sever an offending part of the award would
ultimately depend on whether the said decision is independent and
distinct and whether an annulment of that part would not disturb or
impact any other finding or declaration that may have been returned
by the AT. The question of severability would have to be decided
bearing in mind whether the claims are interconnected or so
intertwined that one cannot be segregated from the other. This for the
obvious reason that if the part which is sought to be set aside is not
found to stand independently, it would be legally impermissible to
partially set aside the award. A partial setting aside should not lead to
a component of the award being rendered vulnerable or unsustainable.
It is only when the award relates to a claim which is found to stand on
its own and its setting aside would not have a cascading impact that
the Court could consider adopting the aforesaid mode.

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 M. The Court is thus of the firm opinion that the power to set aside an award in
part would have to abide by the considerations aforenoted mindful of the
imperatives of walking a line which would not dislodge or disturb another part
of the award. However as long as the part which is proposed to be annulled is
independent and stands unattached to any other part of the award and it could
be validly incised without affecting the other components of the award, the
recourse to partial setting aside would be valid and justified.
(Emphasis supplied)
238. The views expressed in the judgment, referred to hereinabove, are correct and the
power to set aside will include the power to partially set aside and sever the portions of
the award which fall foul of Section 34 subject to the riders engrafted hereinabove.
ABANDONMENT OF CLAIMS - COMPROMISE ARRIVED AT BETWEEN THE PARTIES:
239. Situation may arise where claims for which awards have been granted may be
abandoned or parties may arrive at compromises contrary to the terms of the award. If
the compromise has the effect only of severing a standalone portion of the award with it
being not inseparably intertwined with any other portion, a Section 34 Court can give
effect to compromise and sever that portion of the award in accordance with the
principles of severability set out hereinabove.
240. Equally, with regard to abandonment or giving up of claims by a successful party,
the same principle will apply. However, if the aspects are not severable and the
abandonment/giving up has the effect of impinging upon the award and is inseparably
intertwined and permeates the warp and woof of the award, then the option available to
the Section 34 Court is to set aside the award. In case of settlements which are not
severable, the option will be to dismiss the Section 34 application as not pressed, in
view of the settlement arrived at.
241. I have since had the benefit of reading the judgment of the Hon'ble Chief Justice.
In my judgment, I have independently given my reasons on each of the issues arising
herein. The judgment of the Hon'ble Chief Justice grants power to the Section 34 Court
to modify the post-award interest. I am not able to agree with the said view for the
reasons stated hereinabove. Equally, the judgment of the Hon'ble Chief Justice permits
the exercise of power Under Article 142 of the Constitution of India to modify the
award, though it has been stated in the judgment that the power must be exercised with
caution. Here again, I am not able to agree with the said view for the reasons stated in
my judgment.
CONCLUSION:
(a) The Courts exercising power Under Section 34 and Courts hearing appeals
thereunder have no power to "modify" an award.
(b) The power to modify is not a lesser power to that of the power to set aside,
as the two operate in separate spheres and are not of the same genus.
(c) The inherent power Under Section 151 Code of Civil Procedure cannot be
used to modify awards as it will be contrary to the express power mentioned in
Section 34. Similarly, there is no scope for applying the doctrine of implied
power to modify awards.
(d) Article 142 of the Constitution of India will not be exercised by this Court to
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 modify awards passed by arbitrators as it is well settled that the Article 142
power cannot be used to give a go by to the substantive statutory provision.
(e) Interest awarded also cannot be modified in exercise of powers of setting
aside and the course of action Under Section 34(4) will have to be adopted as
discussed in the judgment.
(f) Hakeem (supra) is not per incuriam insofar as it held that a Section 34 Court
cannot modify the award and will be read with the only exception made in this
judgment now. On the principle of actus curiae neminem gravabit (act of Court
shall prejudice no one) computation, clerical and typographical errors or other
errors of similar nature is permissible to be corrected by the Section 34 Court,
in terms of the holding above.
(g) Kinnari Mullick (supra) does not lay down the correct law insofar as it holds
that the request Under Section 34(4) to the Court by a party to grant an
opportunity to the Arbitral Tribunal to resume proceedings or to take such other
action has to be in writing. Even an oral request Under Section 34(4) can be
entertained by the Court.
(h) The power Under Section 34(4) can be exercised by the Court Suo Moto
also under the circumstances set out hereinabove.
(i) A Court Under Section 34 and the Courts hearing appeals thereafter have the
power to "sever" parts of the award in exercise of the powers of setting aside
awards Under Section 34. However, while severing, the parameters set out
hereinabove and flowing from the judicial precedents discussed therein have to
be followed.
ANSWERS TO THE REFERENCE:
242. In view of the discussion hereinabove, the reference is answered in the following
terms.
Question No. 1 - As set out in the body of the judgment, while exercising power
Under Section 34 of the A&C Act and consequently the Courts in the appellate
hierarchy do not have the power to modify the arbitral award.
Question No. 2 - Modification and severance are two different concepts while
modification is not permitted Under Section 34, severance of the award falling
foul of Section 34 is permissible in exercise of powers Under Section 34. Such
a power of severance is also available to the courts in the appellate hierarchy to
the Section 34 Court.
Question No. 3 & 4 - The power to set aside will not include the power to
modify since the power to modify is not a lesser power subsumed in the power
to set aside and, as held hereinabove, the power to set aside and power to
modify do not emanate from the same genus and are qualitatively different
powers in the context of the A&C Act.
Question No. 5 - The judgment in Hakeem (supra), insofar as it holds that a
Section 34 Court has no power to modify the award, lays down the correct law.
The only exception made in this judgment is with regard to the power to carry
out corrections in computational errors, clerical errors or typographical errors

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 and any other errors of similar nature. This is based on the principle of actus
curiae neminem gravabit (act of court shall prejudice no one).
243. Appreciation is recorded for the painstaking efforts put in by the learned Solicitor
General and all the Learned Senior Counsels/Counsels who addressed arguments and to
the teams assisting them.
244. The reference is disposed of in the above terms.

1 Hereinafter referred to as, "1996 Act".

2 Hereinafter referred to as, "1940 Act".
3 "142. Enforcement of decrees and orders of Supreme Court and orders as to discovery,
etc.-
(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make
such order as is necessary for doing complete justice in any cause or matter pending
before it, and any decree so passed or order so made shall be enforceable throughout
the territory of India in such manner as may be prescribed by or under any law made by
Parliament and, until provision in that behalf is so made, in such manner as the
President may by order prescribe.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme
Court shall, as respects the whole of the territory of India, have all and every power to
make any order for the purpose of securing the attendance of any person, the discovery
or production of any documents, or the investigation or punishment of any contempt of
itself."
4 See Maharashtra State Electricity Distribution Company Limited v. Datar Switchgear
Limited and Ors. MANU/SC/0017/2018 : (2018) 3 SCC 133; Parsa Kente Collieries
Limited v. Rajasthan Rajya Vidyut Utpadan Nigam Limited, MANU/SC/0792/2019 :
(2019) 7 SCC 236; and M.P. Power Generation Co. Ltd. v. ANSALDO Energia SpA,
MANU/SC/0383/2018 : (2018) 16 SCC 661.
5 For domestic awards made in India, an additional ground of interference is available -
patent illegality appearing on the face of the award - in terms of Section 34(2A) of the
1996 Act.
6 Hereinafter referred to as, "Model Law".
7 Hereinafter referred to as, "New York Convention".
8 Hereinafter referred to as, "NHAI Act".
9 "75. Confidentiality.- Notwithstanding anything contained in any other law for the time
being in force, the conciliator and the parties shall keep confidential all matters relating
to the conciliation proceedings. Confidentiality shall extend also to the settlement
agreement, except where its disclosure is necessary for purposes of implementation and
enforcement."
10 "81. Admissibility of evidence in other proceedings.- The parties shall not rely on or
introduce as evidence in arbitral or judicial proceedings, whether or not such
proceedings relate to the dispute that is the subject of the conciliation proceedings,-
(a) views expressed or suggestions made by the other party in respect of a possible
settlement of the dispute;
(b) admissions made by the other party in the course of the conciliation proceedings;
(c) proposals made by the conciliator;
(d) the fact that the other party had indicated his willingness to accept a proposal for

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settlement made by the conciliator."
11 In Ssangyong Engineering and Construction Company Limited v. National Highways
Authority of India (NHAI), MANU/SC/0705/2019 : (2019) 15 SCC 131 the scope of the
public policy ground for setting aside awards was narrowed and confined to violations
of the fundamental policy of Indian law.
12 The "validity" and "invalidity", as used here, does not refer to legal validity or merits
examination, but validity in terms of the proviso to Section 34(2)(a)(iv) of the 1996
Act.
13 The words used in the statute must be interpreted contextually, taking into account
the purpose, scope, and background of the provision. Many words and expressions have
both narrow and broad meanings and thereby open to multiple interpretations. Legal
interpretation should align with the object and purpose of the legislation. Therefore, we
may not strictly apply a semantic differentiation while interpreting the words
"modification" or "setting aside". Instead, a holistic and purposive interpretation of
these words will be consistent with the intent behind the provision and the 1996 Act.
Linguistically and even jurisprudentially, a distinction can be drawn between the
expressions - modification, partial setting aside, and setting aside of an arbitral award
in its entirety. However, we must note that the practical effect of partially setting aside
an award is the modification of the award.
14 Hereinafter referred to as, "ADR".
15 Hereinafter referred to as, "Code".
16 Sir Michael J. Mustill & Stewart C Boyd QC, Commercial Arbitration, p. 617 (2nd ed.
2001).
17 Ibid.
18 "152. Amendment of judgments, decrees or orders.- Clerical or arithmetical mistakes
in judgments, decrees or orders or errors arising therein from any accidental slip or
omission may at any time be corrected by the Court either of its own motion or on the
application of any of the parties."
19 Rather, it acknowledges that the parties opting for arbitration also consent to be
governed by the applicable statute governing arbitration-in this case, the 1996 Act.
Further, principle of party autonomy should not be extended to an extreme to urge that
the party misunderstood the law and consequently the consent is invalid. While it is true
that a mistake of law may vitiate consent in certain contexts, the interpretation here
restricts the court's role to that of limited judicial scrutiny in terms of the 1996 Act.
© Manupatra Information Solutions Pvt. Ltd.

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