Arbitral awards, particularly in relation to compensation. The main case under consideration is Gayatri Balasamy v. ISG Novasoft Technologies Ltd., with a comparative analysis to the Supreme Court decision in Project Director, NHAI v. M. Hakeem (2021). This report focuses on the legal issue of whether courts in India have the power to modify. The report explores how courts interpret their scope under the Arbitration and Conciliation Act, 1996, especially Sections 34 and 37.

Courts have limited power to modify arbitral under Sections 34 as well as 37 of Arbitration and Conciliation Act. Section 34 of the Arbitration and Conciliation Act, 1996 provides the legal framework for challenging an arbitral award before a court, while Section 37 governs appeals against specific orders passed under the Act, including those made under Section 34.
Case brief of Gayatri Balasamy v. ISG NovasoftTechnologies Ltd.

Parties involved:

• Gayatri Balasamy – Appellant
• ISG Novasoft Technologies Ltd – Respondent

So this case was decided by a 4:1 bench of the Supreme Court including Sanjiv Khanna, CJI., B.R. Gavai, Sanjay Kumar, Augustine George Masih, and K.V. Viswanathan, JJ. The Court 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:

• Severability: When the invalid portion of the award can be separated from the valid part.
• Apparent Errors: To correct clerical, computational, or typographical errors evident on the face of the record.
• Post-Award Interest: To modify post-award interest where appropriate.
• 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 with great caution, in accordance with constitutional limits.
   

Justice Viswanathan dissented from the majority view on key issues, holding that:

• The Supreme Court cannot invoke Article 142 of the Constitution to modify arbitral awards.
• Courts have no authority to modify post-award interest; such matters should be referred back to the arbitrator.
• Judicial interference with arbitral awards is impermissible, reinforcing the principle of minimal court intervention.
   

Analyzing the circumstances that are given by the Court in order to exercise the powers: 1. Severability: When the invalid portion of the award can be separated from the valid part. Severability has been acknowledged under Section 34 of the Arbitration and Conciliation Act 1996. The courts have clarified limited power to severe or remove the invalid parts of the arbitral award under this case.

The Court laid down conditions for applying severability:

• The invalid part must not be closely linked with the valid part.
• The two parts must be independent, not interdependent.
• The valid part should be clearly identifiable, especially regarding liability and amount.
   

Apparent Errors: To correct clerical, computational, or typographical errors evident on the face of the record.

• Courts are allowed to fix simple, obvious mistakes in an arbitral award like spelling errors, calculation mistakes, or incorrect dates without changing the actual decision of the arbitrator.
• The Supreme Court said that even though Section 34 does not directly say courts can correct these, they still have this power because it helps in making sure justice is done properly.
• This power is not the same as reviewing the whole award or changing it based on its merits; it's just about fixing small errors that anyone can spot right away.
   

Post-Award Interest: To modify post-award interest where appropriate.

• The Supreme Court said that courts can change or reduce the post-award interest (the interest added after the award is given but before payment is made), if there is a good reason to do so.
• Even though Section 34 doesn't clearly mention this power, the court recognised it as part of the court's duty to ensure fairness.
• But this power is limited and must be used carefully. The aim is to ensure justice without turning it into a full review of the case or interfering too much with what the arbitrator has decided.
   

Analyzing Justice Viswanathan's view:

• Setting aside an award is not the same as changing it; modification would mean re-deciding the case, which courts can't do.
• Clerical or typographical errors can be fixed under Section 33 or Section 152 CPC, but not substantive changes to the award.
• According to him, only a fresh arbitration is possible: that is the only remedy here.
• The judge warned against the Supreme Court using its special powers to modify awards, as it could affect the independence of arbitration.