In a landmark decision, the Supreme Court has ruled that courts have limited authority to modify arbitral awards under the Arbitration and Conciliation Act, 1996. The ruling, delivered on April 30, 2025, emphasizes the sanctity of arbitral awards and reinforces the principle of minimal judicial interference in arbitration proceedings.
The Court held that modifications to arbitral awards are permissible only in exceptional circumstances explicitly outlined in the Act, such as correcting clerical errors or addressing patent illegalities that go to the root of the matter. This decision underscores the pro-arbitration stance of Indian courts, ensuring that arbitral awards are final and binding unless they violate fundamental principles of justice or public policy.
This ruling is a significant development for arbitration practitioners and businesses, as it promotes certainty and efficiency in dispute resolution. Parties involved in arbitration agreements are now further incentivized to respect the arbitral process, knowing that judicial intervention will be limited.
