Section 34 courts cannot modify arbitral awards by reappreciating evidence.

STC contracted with J.K. International, an Australian company, for the supply of 1,60,000 MT of yellow peas, with a seller’s option to vary the quantity by 10%.

The first two shipments were completed; disputes arose over the November and December 2008 shipments, after which the seller claimed damages in arbitration.

The majority tribunal awarded damages, and STC’s counterclaims were also allowed in part.

On STC’s petition under Section 34 of the Arbitration and Conciliation Act, 1996, the Single Judge modified the award by reducing the quantity and changing the prices used to calculate damages, as well as modifying interest.

Both parties appealed under Section 37.

Whether the Single Judge could modify the arbitral award in the manner undertaken while deciding STC’s Section 34 petition.

Whether the modifications could be severed while upholding the remainder of the impugned judgment, or whether the Section 34 objections required fresh consideration.

Section 34 of the Arbitration and Conciliation Act, 1996 provides limited grounds for setting aside an arbitral award; it does not permit an appellate review or re-appreciation of evidence.

The Court noted that the arbitration was an international commercial arbitration seated in India and that the applicable public-policy review was narrow; it also referred to the unamended Section 34 provision as applicable to the petition filed in 2013.

Under Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd., 2025 INSC 605, a court’s power to modify an award is limited, including correction of apparent clerical or computational errors, severance of an invalid and separable part, and limited modification of post-award interest; valid and invalid parts cannot be severed if they are interdependent.

Section 34(4) permits the tribunal to resume proceedings or take appropriate action to eliminate grounds for setting aside, but is not a means to revisit decided issues or re-appreciate evidence.

The Single Judge altered the quantity, contractual price, market price and interest used in the award, thereby changing the damages assessment.

The appellate court held that these modifications could not stand under the limited principles governing Section 34 review.

It declined to sever the modifications and uphold the rest of the judgment because breach and the consequential assessment of damages were intricately connected, and the Single Judge had not upheld the award as a whole.

Fresh consideration was also warranted because the judgment contained inconsistent findings about which vessels were intended for the November and December shipments.

Whether Section 34(4) relief was appropriate could be considered only after the objections were assessed within Section 34’s limits.

Both appeals were disposed of, and pending applications were also disposed of.