Dispute Over Full & Final Settlement Is Arbitrable Despite Parties Discharging Contract : Supreme Court

The Supreme Court today (May 6) observed that if the insured alleges coercion in arriving at a settlement with the insurer, then the dispute over the validity of the settlement remains arbitrable. “Any dispute pertaining to the full and final settlement itself by necessary implication being a dispute arising out of or in relation to or under the substantive contract would not be precluded from reference to arbitration as the arbitration agreement contained in the original contract continues to...

Can Arbitral Awards Be Modified In Setting-Aside Proceedings? – A Brief On Supreme Court's Re-Interpretation Of Section 34 Of Arbitration Act

Section 34 of the Arbitration and Conciliation Act, 1996 ('Act'), governs the setting-aside of awards arising from arbitrations seated in India. This provision does not provide any powers for the setting-aside court to vary or modify portions of the award. This was the legal position in vogue under Indian law, until the Hon'ble Supreme Court's reinterpretation of Section 34, by its judgment dated 30th April 2025 in Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited ('Balasamy'). By their...

If Courts Can Only Set Aside Awards & Can't Modify Them, Parties Will Be Forced To Undergo Fresh Round Of Arbitration : Supreme Court

The Supreme Court recently held that in order to ensure efficient dispute resolution and uphold the objectives of the Arbitration and Conciliation Act 1996, the Court should be allowed to modify awards when parties challenge the tribunal's decision. The decision was rendered by a Constitutional Bench led by CJI Sanjiv Khanna comprising Justices BR Gavai,Sanjay Kumar, AG Masih and KV Viswanathan. Justice KV Viswanathan, however dissented on th issue whether Courts can modifiy awards under...

Supreme Court Criticises Arbitration Bill 2024 For Not Recognising Power To Implead Non-Signatories, Urges Union To Make Changes

The Supreme Court today (May 2) expressed its dissatisfaction with the continued absence of explicit statutory recognition for the power of arbitral tribunals to implead or join non-signatory parties. The Court noted with concern that, despite earlier omissions in the Arbitration and Conciliation Act, 1996, the newly proposed Arbitration and Conciliation Bill, 2024, which seeks to overhaul the legislation, also failed to address this critical issue.“The Department of Legal Affairs has now, once...

When Can Court Remand Arbitral Award To Tribunal Under S.34/37 Arbitration Act ? Supreme Court Explains

The Supreme Court Constitution Bench recently held that the powers of Courts to remand arbitral awards back to the Tribunal under S. 34(4) of the Arbitration and Conciliation Act 1996 cannot be seen as a straight-jacket formula. The Court observed that an award should be remitted back only if there is a possibility to correct a defect in the award, but if the entire award suffers from substantial injustice and patent illegality, remittance should be avoided. The Constitution...

Courts Can Modify Arbitral Awards In Certain Circumstances Under S.34/37 Arbitration Act: Supreme Court By 4:1

Answering a reference, a Constitution Bench (by 4:1) of the Supreme Court held that Appellate Courts have limited powers to modify arbitral awards while exercising powers under either Section 34 or 37 of the Arbitration and Conciliation Act, 1996.The majority judgment by Chief Justice of India Sanjiv Khanna held that the Courts have a limited power under Section 34/37 to modify arbitral awards. This limited power can be exercised in the following circumstances :1. When the award is severable by...

S.34 Arbitration Act | Respect Arbitral Autonomy; Judicial Interference Should Be Minimal : Supreme Court

The Supreme Court reiterated that the courts cannot go beyond the scope of Section 34 of the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) while deciding an application for setting aside of an award."the role of the court under Section 34 of the 1996 Act is clearly demarcated. It is a restrictive jurisdiction and has to be invoked in a conservative manner. The reason is that arbitral autonomy must be respected and judicial interference should remain minimal otherwise it will...

Arbitral Award For Claims Not Included In IBC Resolution Plan Can't Be Enforced: Supreme Court

The Supreme Court recently allowed an appeal challenging the enforcement of an arbitral award passed by the Micro and Small Enterprises Facilitation Council (MSEFC) against Electrosteel Steels Ltd., holding that the award was non-executable in view of the resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016.“we have no hesitation to hold that upon approval of the resolution plan by the NCLT, the claim of the respondent being outside the purview of the...

Supreme Court Flags Long Submissions In S.34/37 Arbitration Act Proceedings, Says Timelimit Needs To Be Imposed

On April 21, the Supreme Court expressed its displeasure over the prolonged arguments and submissions made by members of the Bar in arbitration proceedings under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.The Court noted that excessively long oral submissions force judges to invest significant time in reviewing extended arguments, often supported by a large volume of case law, regardless of their relevance. This practice, particularly in high-stakes matters, leads to...

Arbitral Tribunal Can Proceed Against Party Though They Weren't Served With S.21 Notice Or Made Party In S.11 Application : Supreme Court

The Supreme Court recently observed that not being served with the notice invoking arbitration under Section 21 of the Arbitration and Conciliation Act, and not being made a party in the Section 11 application (for appointment of arbitrator), are not sufficient grounds to hold that a person cannot be made party to arbitral proceedings. "A notice invoking arbitration under Section 21 of the ACA is mandatory...and it is a prerequisite to filing an application under Section 11. However, merely...

Supreme Court Holds Chandigarh Authorities Liable For Delay In Film City Project, Directs Refund Of 47.75 Crores To Successful Bidder

In a recent judgment, the Supreme Court largely upheld an arbitral award passed in favor of a company engaged by the Chandigarh Administration to establish a Multimedia-cum-Film City in the Union Territory, holding the authorities liable to refund a forfeited bid amount of Rs.47.75 crores.A bench of Justices BV Nagarathna and Satish Chandra Sharma delivered the verdict, being of the view that the Punjab and Haryana High Court wrongly set aside the arbitral award.It opined that though time was of...

S. 34(3) Arbitration Act | Application Filed On Next Working Day After 90 Day Period Is Within Limitation : Supreme Court

The Supreme Court held that the three-month limitation period under Section 34(3) of the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) for challenging an arbitral award should not be rigidly interpreted as exactly 90 days, rather it should be interpreted as three calendar months. The Court upheld the filing of an application under Section 34 of the Arbitration Act on 11.07.2022 to set aside an arbitral award passed on 09.04.2022, despite it being beyond the 90-day period. It...