On April 30, 2025, a five-judge Constitution Bench led by Chief Justice Sanjiv Khanna settled a decades-old debate: Can Indian courts modify arbitral awards under the Arbitration and Conciliation Act, 1996?

The Court held that while Section 34 does not grant appellate powers, it permits limited corrections—such as clerical, computational, or severable errors—without venturing into merits. The distinction is crucial: setting aside an award erases it, while modification cautiously trims unsustainable parts, ensuring justice without rewriting the arbitrator’s decision.

Past rulings had oscillated between a strict “no modification” stance (NHAI v. M. Hakeem) and pragmatic adjustments (Vedanta, Tata Hydro-Electric). The new ruling strikes a middle path—acknowledging doctrines of severability and implied powers, while warning against judicial overreach.

This judgment anchors Indian arbitration in a realist yet restrained framework: courts may correct manifest errors but cannot re-litigate disputes. By balancing arbitral autonomy with fairness, the Supreme Court has crafted a nuanced model for India’s evolving arbitration regime.

In short: courts can trim the edges but must never redraw the canvas.