INTRODUCTION
Arbitration is a way to resolve disputes because it is private and gets things done quickly. This way of resolving disputes saves time. Let’s people pick who they want to decide their case. Arbitration is a modern way of doing things, and it is now part of our laws thanks to the Arbitration and Conciliation Act of 1996. The Arbitration and Conciliation Act of 1996 uses ideas and rules from the UNCITRAL[1] Model Law and Rules. Arbitration focuses on how to choose the person who makes the decision, what steps to take during the process and how to make sure the decision is enforced. Arbitration is really about making the process of resolving disputes faster for everyone involved in arbitration. The use of Arbitration to resolve disputes has caused a lot of changes and discussions about how it works and how it is enforced in court. People are talking about how the court should get involved in Arbitration matters, like when an arbitral award is given or needs to be changed. We need to have this discussion so we can make things better and protect the idea of Arbitration. This is really about finding a balance between letting the courts keep an eye on things and making sure Arbitration can work independently. Arbitration is very important. We need to make sure it is working properly. The courts’ role in Arbitration is a part of this discussion, and it is crucial for the future of Arbitration.
ARBITRAL AWARD AND ITS RELEVANT PROVISIONS
The Arbitral Award is defined in the Arbitration and Conciliation Act. It is defined under section 2(1)(c) of this Act. This definition includes both interim and final Arbitral Awards. The Arbitration and Conciliation Act says that an Arbitral Award must be final and binding. This is stated in section 35 of the Act. An Arbitral Award is a step in the arbitral process. It is final. The parties involved must follow it. The Arbitral Award is also independent, meaning it is not influenced by any factors.
The court will not interfere with an Arbitral Award unless necessary. This is what makes an Arbitral Award so important. It is a decision that must be followed. There is no way to challenge an Arbitral Award. This shows that Arbitration is an alternative to going to court. The Arbitral Award is a part of Arbitration. It makes arbitration an effective way to solve disputes. The Act also has a way to fix mistakes in awards, which is explained in Section 33. This allows the people in charge of the arbitration to correct errors, like typos or math mistakes. This shows that the people who made the law want the arbitration team to make any changes instead of going to court. The Act is clear that the arbitration team should be the ones to fix things, not the courts.
CAN COURTS CHANGE AN AWARD?
This is a question that many people have. Courts do have some power to modify an award. However, the courts can only do this in limited circumstances. The arbitral award is usually final and binding on the parties involved. If there is a serious problem with the award, the courts may be able to step in and make some changes to the arbitral award. The courts will only modify an award if something has gone seriously wrong. For example, if the arbitral award is not fair or if it is based on a mistake, the courts may be able to modify the award. So to answer the question, courts can modify an award, but only in very limited circumstances and only if the arbitral award is seriously flawed.
The main problem with the court getting involved in Arbitration is that people wonder if the court can change the decision made by the arbitrators. The question is whether the court has the authority to modify the Arbitration decision or if there are limits to what the court can do with the Arbitration award. The issue is really about the power of the court when it comes to the Arbitration award.
The courts have the power to change the decisions made by arbitrators under Sections 34 and 37 of the Arbitration and Conciliation Act 1996. This has caused a lot of confusion because different High Courts and the Supreme Court of India have opinions on this matter. The law says that courts can only interfere with the decisions made by arbitrators in certain ways. Section 34 of the Arbitration and Conciliation Act 1996 says that there are reasons why an award can be set aside. Lately, the courts have had to deal with situations where they do not need to cancel the award made by the arbitrators. The Arbitration and Conciliation Act, 1996, is very clear about this. However, the courts still need to correct mistakes or unfair results. The Arbitration and Conciliation Act, 1996 and its Sections 34 and 37 are very important in these cases. The situation we are seeing now has caused judges to think differently. This means that judges can make changes in some cases. It brings up questions about whether the decisions made by arbitrators are really final and how much judges should get involved. The question of whether judges should interfere with arbitration decisions is something that people in India have been arguing about.
The Supreme Court said something in the case of S.V. Samudharam v. State of Karnataka[2]. The Supreme Court has powers under Section 34. These powers are mainly about supervising. The Supreme Court cannot change awards under Section 34.
The Supreme Court has a role under Section 37. This role includes saying yes to the arbitrator’s award or setting it aside after it has been changed under Section 34. The Supreme Court can also say no to applications under Sections 34 and 37. The Supreme Court does not have the power to appeal, so it cannot change awards made by the arbitrator. The Supreme Court and arbitral awards are very important in this situation.
The case of M/S Oriental Structural Engineers Private Limited vs. State of Kerala[3] is an example. This is interesting because the award for M/S Oriental Structural Engineers Private Limited vs. State of Kerala was something that was already agreed upon in the contract for M/S Oriental Structural Engineers Private Limited vs. State of Kerala. This shows that the courts do not always make decisions in the same way. There are court decisions about M/S Oriental Structural Engineers Private Limited vs. State of Kerala and other cases that have different opinions on whether or not the courts should get involved in these kinds of decisions for M/S Oriental Structural Engineers Private Limited vs. State of Kerala.
The way people understand Section 34 has changed over time. This has resulted in court decisions about what is allowed when it comes to interfering with Section 34. Recently, the Supreme Court decided in the case of Gayatri Balasamy v. ISG Novasoft Technologies Limited[4]. The court said that in certain situations, they can change the decisions made by arbitrators under Sections 34 and 37 of the Act. The judges who made this decision said that courts can modify these decisions. They used the idea that “the greater contains the less” to support their view on modifying the decisions made by arbitrators, under Sections 34 and 37. The court thought that if it could cancel an award, it could also make smaller changes to it. The court can even take out the parts of the award that are not valid and leave the rest alone. The court has the power to do this on its own. The court said that sometimes it is not possible to cancel part of an award when the good and bad parts are connected in a way that makes it hard to separate them legally and, in real life. The court can make changes to an award because it has the power to do what it thinks is right. The court is talking about awards and what it can do with them.
Most people think that an award that makes sense has to have three things. The award should be fair, easy to understand and have details. The law says that the court can help the arbitration team fix mistakes in their reasoning before saying no to their decision. This is really important when the arbitration team does not explain things well or leaves out parts, as long as they can fix these problems. The main goal is to correct mistakes in arbitration that can be fixed. This means we can make changes to awards and avoid wasting time and money by starting the arbitration process all over again. The court also said that if we modify an award under Section 34, it will not cause any problems with the rules set by the New York Convention or with enforcing awards from other countries. The court talked about using the powers it has under Article 142 of the Constitution of India. This power can be used when it is really necessary to resolve arguments and finish court cases. It saves time and money for both sides. Courts do not have a lot of power under Sections 34 and 37 of the Act. They can only make some changes to awards in certain situations.
CONCLUSION
Arbitration helps to resolve disputes between parties efficiently. When courts can modify the decisions made by arbitrators, either by completely changing them or sending them back, it helps to support the idea of making things faster and more efficient. Indian courts can make rules when they have to change awards. They have to be careful not to interfere much. The Supreme Court has shown how to do this. Indian courts have to protect the process. They should only change awards in cases. Each time they make a change, they have to give reasons why they are doing it. The way Indian courts think about changing awards is changing. Now they want to make sure things are fair and get done quickly. Indian courts and arbitral awards are very important. The rules for changing awards have to be clear. While the principle of minimal court interference remains, recognising limited modification powers under Sections 34 and 37 allows for addressing correctable defects without compromising arbitration’s independence. This approach aligns India with progressive international practices, minimising unnecessary delays, preventing repetitive proceedings, and boosting trust in arbitration as a suitable alternative to litigation. Ultimately, courts must maintain the integrity of arbitration proceedings.
Author’s Name: Sarita Taneja (Maharaja Agrasen Institute of Management Studies, Rohini, Delhi)
References:
[1] United Nations Commissions on International Trade Law
[2] S.V. Samudram v State of Karnataka & Anr [2024] 1 SCR 281
[3] M/s Oriental Structural Engineers Pvt. Ltd. v. State of Kerala (2021) 6 SCC 150.
[4] Gayatri Balasamy v ISG Novasoft Technologies Limited [2025] INSC 605
