Whether courts are empowered to modify an arbitral award? SC refers question to larger bench

New Delhi, Feb 22 – A 3-judge bench of the Supreme Court has referred to a larger bench the question whether courts are empowered to modify an arbitral award under the Arbitration and Conciliation Act, 1996.

The Bench, headed by Justice Dipankar Datta, noted that while one line of decisions of the top court has answered the above 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.

Ordering the matter to be placed before the Chief Justice of India for appropriate orders, the Bench, also comprising Justices K.V. Vishwanathan and Sandeep Mehta, stressed that clarity is required for exercise of jurisdiction under Sections 34 or 37 of the Arbitration and Conciliation Act through an authoritative pronouncement.

The reference included the question 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 and 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.


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