Supreme Court docket Ruling: Scope to Modify Arbitral Awards beneath Part 34 & 37

Supreme Court docket Ruling: Scope to Modify Arbitral Awards beneath Part 34 & 37

Context:

Within the case of Gayatri Balasamy v. ISG Novasoft Applied sciences Ltd, the Supreme Court docket clarified the authorized scope for modifying arbitral awards beneath the Arbitration and Conciliation Act, 1996.

Relevance:
GS-02 (Indian Polity)

Key Takeaways from the Judgment

• Partial Modification Permitted: Courts can modify or put aside components of an arbitral award if the award is severable—i.e., invalid sections could be separated from legitimate ones.
• Doctrine Cited: The SC invoked the precept of “omne majus continet in se minus” (the larger contains the lesser), implying that the facility to completely put aside an award contains the facility to partially achieve this.
• Error Correction Allowed: Courts can rectify clerical, typographical, or computational errors within the arbitral award.
• Put up-Award Curiosity Modification: The Court docket can also revise post-award curiosity beneath sure circumstances.
• Article 142 Invoked: The SC famous that such powers can also be exercised beneath Article 142 of the Structure (full justice), so long as it aligns with the fundamental construction and ideas of the 1996 Act.

Background: Arbitration in India

• Definition: Arbitration is a technique of Different Dispute Decision (ADR) the place events mutually conform to settle disputes outdoors court docket by way of a impartial third occasion.
• Benefits: It’s much less adversarial, sooner, and extra versatile than conventional litigation.
• Authorized Framework:
  • Ruled by the Arbitration and Conciliation Act, 1996.
  • Based mostly on the UNCITRAL Mannequin Regulation, 1985 for worldwide business arbitration.
  • Part 34: Permits for setting apart an arbitral award by court docket.
  • Part 37: Lists conditions the place appeals could be made towards arbitral orders.

Prelims Observe Query:

Q. With regards to the Supreme Court docket judgement in Gayatri Balasamy v. ISG Novasoft Applied sciences Ltd., think about the next statements:

1. The Court docket held that arbitral awards could be modified or put aside partially if the award is severable.
2. The judgement invoked Article 142 of the Structure to make sure full justice in arbitration issues.
3. Courts can not modify post-award curiosity beneath any circumstances.

Which of the statements given above is/are right?

A. 1 and a couple of solely

B. 2 and three solely

C. 1 and three solely

D. 1, 2 and three

Reply: A. 1 and a couple of solely

Rationalization:

• Assertion 1 is right: The Court docket allowed partial modification of arbitral awards if severable.
• Assertion 2 is right: the SC invoked Article 142 for guaranteeing full justice.
• Assertion 3 is inaccurate: The Court docket can modify post-award curiosity in some circumstances.