Yes - since 30 April 2025, courts can modify an arbitral award, but only in narrow situations. In Gayatri Balasamy v. ISG Novasoft Technologies Ltd, 2025 INSC 605, a five-judge Constitution Bench of the Supreme Court held by 4:1 that a court may sever an invalid part, correct an obvious clerical or computational error, and adjust post-award interest. It still cannot re-judge the dispute.
₹1,02,00,000 is what the reasoning of an award awards your business, but the operative line says ₹1,20,00,000, an obvious transposed-digit slip the arbitrator never corrected. Until 30 April 2025, a court hearing your challenge could only cancel the whole award, not fix that error. That has now changed, in a limited way.
Short on time? Jump to the table below: “What a court CAN now do” versus “What a court still CANNOT do.”
The case is Gayatri Balasamy v. ISG Novasoft Technologies Ltd, 2025 INSC 605, decided on 30 April 2025. A five-judge Constitution Bench of the Supreme Court of India, led by the Chief Justice of India, Sanjiv Khanna, was asked one question: can a court that hears a challenge to an arbitral award modify it, or must it only set the award aside?
By a 4:1 majority, the Court held that a court does have a limited power to modify an arbitral award under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. This settles years of conflicting High Court and Supreme Court views.
The new power is narrow. The Court was clear that it does not open the door to a fresh hearing on the merits. Here is the dividing line.
| What a court CAN now do | What a court still CANNOT do |
|---|---|
| Sever the invalid part of an award from the valid part | Re-judge the merits of the dispute |
| Correct clerical, computational or typographical errors that are self-evident on the face of the award | Re-appreciate the evidence the tribunal already weighed |
| Modify post-award interest in appropriate cases | Substitute its own decision for the tribunal's findings |
The bar on a merits-based review stays exactly where it was. A court still cannot reopen the facts, re-read the contract, or second-guess the arbitrator's reasoning. The modification power applies only to defects that are obvious on the face of the award, not to disagreements about who should have won.
This is a real shift from the earlier position. Before this ruling, the settled understanding was that a court acting under Section 34 (which deals with setting aside an award) could only cancel the award, in whole or in part, and send the parties back to square one. It could not write in a correction.
Most commercial contracts in India, from supply agreements to construction and IT services deals, carry an arbitration clause. If your contract has one, this ruling affects you.
Before April 2025, a single obvious slip could force a full set-aside. The parties would then face fresh proceedings, more legal fees, and years of delay, all to fix a number a calculator could verify. That was a costly outcome for a clerical mistake.
Now a court can correct the self-evident error, sever the bad part, or adjust the post-award interest, and keep the rest of the award alive. For a business holding an otherwise sound award worth ₹50,00,000 with one arithmetic slip, that can mean enforcement in months instead of starting over.
A word of caution. The power is deliberately limited. Do not treat a Section 34 challenge as a chance to argue the case again under a new label. If your real complaint is that the arbitrator got the facts or the contract wrong, this ruling does not help you, because re-judging the merits is exactly what a court still cannot do.
A challenge to an arbitral award is filed under Section 34 of the Arbitration and Conciliation Act, 1996. An appeal against the order on that challenge lies under Section 37. The Gayatri Balasamy ruling, 2025 INSC 605, reads a limited modification power into both of these provisions.
Once an award survives challenge, or the limitation window to challenge it closes, the winning party moves to enforce it as a decree of the court. Read our guide on enforcing a domestic arbitral award under Section 36 for the execution route.
The arbitration journey has several other touchpoints citizens often need. If a dispute has arisen and no tribunal exists yet, you may need a Section 11 petition to get an arbitrator appointed. If money or assets are at risk before the tribunal can act, a Section 9 application for interim relief can protect your position. And if you doubt the arbitrator's neutrality, see how to challenge or remove a biased arbitrator under Sections 12 and 13.
For a plain-language walkthrough of how citizens use the law to hold institutions to account, see The RTI Playbook.
If you are holding an award that is sound except for an obvious slip, act in order.
Only if the change flows from a self-evident clerical or computational error, or from severing an invalid part. The court in 2025 INSC 605 allowed correction of errors that are obvious on the face of the award. It did not allow a court to re-value the claim on the merits. If you want a higher figure because you think the arbitrator under-counted your losses, that is a merits argument, and the court cannot reopen it.
No. The bar on a merits-based review stays in place. The Supreme Court was explicit that a court cannot re-appreciate the evidence or substitute its own view for the tribunal's. The modification power is limited to severing invalid parts, fixing obvious errors, and adjusting post-award interest. A Section 34 petition is not a second hearing.
The power comes from Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. Section 34 covers setting aside an award; Section 37 covers appeals. The ruling is from the Supreme Court of India, in Gayatri Balasamy v. ISG Novasoft Technologies Ltd, 2025 INSC 605, decided on 30 April 2025 by a five-judge Constitution Bench led by Chief Justice of India Sanjiv Khanna.
Earlier, the settled position was that a court under Section 34 could only set aside (cancel) an award, in whole or in part, and not modify it. After 30 April 2025, a court has a limited power to modify, by severing an invalid part, correcting a self-evident error, or adjusting post-award interest. The merits of the dispute remain off-limits.
Yes, in appropriate cases. Modifying post-award interest is one of the three narrow situations the Court permitted in 2025 INSC 605. As with the other powers, this is a limited corrective tool, not an invitation to re-examine how the tribunal decided the underlying claim.
Then this ruling does not give you a remedy by modification. Disagreeing with the tribunal's findings on facts, evidence, or the contract is a merits complaint, and re-judging the merits is exactly what a court still cannot do. Your only route remains a challenge to set aside the award on the limited grounds the Arbitration and Conciliation Act, 1996 already allows, not a request to rewrite it.