SC Allows Modification of Arbitral Awards
Why focus: Constitution Bench on Arbitration Act Sec 34 — GS2 Judiciary, tests exact scope of judicial intervention in arbitral awards.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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BEFORE: Courts had a binary choice under Section 34 - either uphold the arbitral award entirely or set it aside completely. NOW: Courts possess a limited power to modify the award to correct manifest errors.
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BEFORE: A partially invalid award resulted in the entire arbitration being quashed, requiring parties to start over. NOW: Courts can apply the doctrine of severability to remove only the non-arbitrable or legally flawed parts while enforcing the valid remainder.
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BEFORE: Modifying an award to prevent grave injustice often required invoking the Supreme Court's extraordinary powers under Article 142 of the Constitution. NOW: The power to modify specific errors is recognized within the statutory framework of Section 34 itself.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)Which of the following statements is/are correct regarding the modification of arbitral awards in India? 1. The Supreme Court ruled that courts have an absolute and unlimited power to rewrite arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996. 2. The recent Constitution Bench ruling allows courts to apply the doctrine of severability to remove non-arbitrable parts of an award.