Supreme Court: In a 4:1 majority ruling, a five-judge Bench comprising Sanjiv Khanna, CJI., B.R. Gavai, Sanjay Kumar, Augustine George Masih, and K.V. Viswanathan, JJ. held that appellate courts have limited powers to modify arbitral awards while exercising jurisdiction under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. Justice K.V. Viswanathan delivered the dissenting opinion.
The Court held that appellate courts may exercise limited powers to modify arbitral awards under certain specific circumstances:
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Severability — When the invalid portion of the award can be separated from the valid part.
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Apparent Errors — To correct clerical, computational, or typographical errors evident on the face of the record.
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Post-Award Interest — To modify post-award interest where appropriate.
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Article 142 Powers — The Supreme Court may exercise its special powers under Article 142 of the Constitution to modify awards, but such powers must be used sparingly and with great caution, in accordance with constitutional limits.
Justice Viswanathan dissented from the majority view on key issues, holding that:
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The Supreme Court cannot invoke Article 142 of the Constitution to modify arbitral awards.
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Courts have no authority to modify post-award interest; such matters should be referred back to the arbitrator.
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Judicial interference with arbitral awards is impermissible, reinforcing the principle of minimal court intervention.
Source: Supreme Court live hearing
