Arbitration is founded on party autonomy and limited judicial intervention. Yet, once an arbitral award is delivered, a party may seek judicial review under Section 34 of the Arbitration and Conciliation Act, 1996. The question is: where does that intervention stop?

The Scope of Section 34

Section 34 permits an arbitral award to be set aside on limited grounds, including incapacity of a party, invalidity of the arbitration agreement, violation of natural justice, the tribunal exceeding its jurisdiction, conflict with the public policy of India and, in domestic arbitrations, patent illegality appearing on the face of the award under Section 34(2A).

However, Section 34 is not an appellate provision. In Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49, the Supreme Court emphasised that courts should not sit in appeal over an arbitral tribunal by reassessing evidence or substituting their own interpretation. This principle was reinforced in Ssangyong Engineering & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131, where the Court stressed the restricted scope of review under the amended Section 34.

Similarly, in MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163, the Supreme Court reiterated that a court exercising Section 34 jurisdiction does not ordinarily reappreciate evidence or interfere merely because another view is possible.

Can a Court Modify an Award?

This issue was conclusively examined by the Constitution Bench in Gayatri Balasamy v. ISG Novasoft Technologies Ltd., 2025 INSC 605.

By a 4:1 majority, the Supreme Court held that courts have a limited power under Sections 34 and 37 to modify an arbitral award. Such intervention is permissible in narrowly defined circumstances, including severing an invalid portion from a severable valid portion, correcting clerical, computational or typographical errors, and modifying post-award interest in certain circumstances.

The judgment, however, does not convert Section 34 into a general appellate jurisdiction. The Court cannot revisit the merits of the dispute merely because it may have reached a different conclusion.

The decision also considered Project Director, NHAI v. M. Hakeem, (2021) 9 SCC 1, which had held that a Section 34 court does not possess a general power to modify an arbitral award. The Constitution Bench clarified the position by recognising only the limited forms of intervention identified in Gayatri Balasamy.

Where Does Judicial Intervention End?

The distinction is fundamental. A court can examine whether an award falls within the statutory grounds for setting aside, but it cannot ordinarily conduct a rehearing on facts, reassess evidence or replace the arbitrator's interpretation with its own.

The Supreme Court has described Section 34 jurisdiction as supervisory rather than appellate.

Conclusion

The law therefore seeks to maintain a careful balance: arbitral awards must remain open to judicial scrutiny where the statute permits it, but arbitration cannot become a prelude to a full-fledged appeal.

The decision in Gayatri Balasamy reinforces this balance by permitting only narrowly defined forms of intervention while preserving the finality and autonomy that lie at the heart of arbitration.