Supreme Court Explores Role of Courts in Modifying Arbitral Awards

The Supreme Court has referred a critical question to a five-judge Constitution bench, examining if courts can modify arbitral awards under the Arbitration and Conciliation Act, 1996. The legal ambiguity involves whether courts can alter awards or only uphold or annul them, impacting arbitration jurisprudence.

In a critical development, the Supreme Court has sought clarity on whether courts possess the authority to modify arbitral awards under the Arbitration and Conciliation Act, 1996, by referring the matter to a five-judge Constitution bench.

A bench led by Chief Justice Sanjiv Khanna has emphasized the need to resolve the contentious issue of court intervention in arbitral awards delineated under Sections 34 and 37, which traditionally limit judicial engagement.

The decision to refer comes amid arguments presented on behalf of the respondents, suggesting the need for a decisive legal interpretation. The bench highlighted the broader implications for arbitration jurisprudence, aiming for clarity on the scope of court powers over arbitral decisions.

(With inputs from agencies.)