2024 (2) TMI 1549 - SCH - Indian Laws

Power of Courts to modify an arbitral award in exercise of power under sections 34 or 37 of the Arbitration and Conciliation Act 1996 - HELD THAT - The questions need to be referred to a larger Bench for answers. The special leave petitions may be placed before the Hon ble the Chief Justice of India for an appropriate order.

Summary

The Supreme Court of India, through a Bench comprising Justices Dipankar Datta, K.V. Viswanathan, and Sandeep Mehta, addressed the recurring legal issue concerning the scope of judicial powers under sections 34 and 37 of the Arbitration and Conciliation Act, 1996. The Court noted conflicting precedents: some denying courts the power to modify arbitral awards, while others have either modified awards or upheld such modifications.Recognizing the need for authoritative clarity, the Court referred the following questions to a larger Bench:1. Whether the powers under sections 34 and 37 include the power to modify an arbitral award.2. If so, whether such power is confined to severable parts of the award.3. Whether the broader power to set aside under section 34 encompasses modification, and to what extent.4. Whether the power to modify can be implied within the power to set aside under section 34.5. Whether recent judgments (Project Director NHAI v. M. Hakeem, Larsen Air Conditioning, SV Samudram) correctly state the law, in light of earlier decisions permitting modification (Vedanta Ltd., Oriental Structural Engineers, M.P. Power Generation, J.C. Budhraja, Tata Hydroelectric, Shakti Nath).The Court dismissed I.A. No.42914/2024 and extended compliance time with the prior order by three weeks. The special leave petitions will be placed before the Chief Justice for further directions.