Setting Aside, Modification and Remission Compared

A court hearing an application under Section 34 has, in substance, four courses open to it: dismiss the application, set the award aside, remit the matter to the tribunal under Section 34(4) so that a defect may be cured, or correct the award within the narrow limits recognised in 2025. The three positive courses are frequently confused, and they differ in source, in trigger, in timing and in effect. Setting aside destroys the award. Remission preserves it and sends it back. Modification keeps it and alters it, and the power to do that is far smaller than the word suggests.

The three courses, compared on the points that decide which is available

1. Setting Aside

This is the relief the section was written to give. Section 34(1) provides that recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with sub-sections (2) and (3), and Section 34(2) states the grounds. Where a ground is made out the award is set aside, and the parties are returned to the position they occupied before it was made.

The claim survives. Setting aside does not decide the dispute. The claim may be referred again, and Section 43(4) provides that where an award is set aside, the period between the commencement of the arbitration and the date of the order is excluded in computing the limitation for the fresh proceedings.
Partial setting aside is possible. The proviso to Section 34(2)(a)(iv) permits the court to set aside only that part of the award which contains decisions on matters not submitted to arbitration, provided it can be separated from the rest. Severability is a question of whether the good part stands independently of the bad.
The appeal. An order setting aside, or refusing to set aside, an award is appealable under Section 37(1)(c), and no second appeal lies.

2. Remission under Section 34(4)

Section 34(4), Arbitration and Conciliation Act, 1996

On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

The provision is a repair mechanism. Instead of destroying an award for a defect the tribunal could put right, the court holds its hand and gives the tribunal the opportunity to do so. Three conditions govern its use.

A written request by a party. The court cannot act of its own motion, and cannot remit merely because it considers remission convenient.
Before the award is set aside. Once the award has been set aside there is nothing to remit, and the tribunal is functus officio; an application made afterwards is too late.
A curable defect. The tribunal is to take action that will eliminate the ground for setting aside. Where the defect is of a kind the tribunal cannot cure without reconsidering its decision, the section does not apply.

📖 Kinnari Mullick v. Ghanshyam Das Damani, (2018) 11 SCC 328

Held: The power under Section 34(4) can be exercised only on a written request made by a party, and not suo motu by the court. It must be exercised before the award is set aside; once the court has set aside the award, there is no power to relegate the parties to the tribunal.

📖 I-Pay Clearing Services (P) Ltd. v. ICICI Bank Ltd., (2022) 3 SCC 1

Held: A distinction must be drawn between the absence of reasons and inadequate or unintelligible reasons. Where there are no reasons at all on a finding, or where the tribunal has failed to decide a claim, the defect is not one that can be cured under Section 34(4); the award is liable to be set aside. Section 34(4) is available where the reasons exist but are inadequate or require elaboration, and it cannot be used to permit the tribunal to fill up a gap in its decision after seeing the challenge.

Significance: This, with Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1, marks the boundary of remission: elaboration of existing reasoning is permissible, supplying a decision that was never made is not.

3. Modification

Nothing in Section 34 confers a power to modify an award. The section is modelled on Article 34 of the UNCITRAL Model Law, which provides only for setting aside, and the omission is deliberate: Sections 15 and 16 of the Arbitration Act, 1940 had conferred powers of modification and remission on the court, and neither was carried into the Act of 1996.

📖 Project Director, NHAI v. M. Hakeem, (2021) 9 SCC 1

Held: Section 34 confers no power to modify an arbitral award. A court which finds an award defective may set it aside, wholly or in part, but may not substitute its own figure, rate or relief. The contrast with the 1940 Act, which expressly permitted modification, shows that the omission in 1996 was intentional.

📖 Gayatri Balasamy v. ISG Novasoft Technologies Ltd., 2025 INSC 605, decided on 30 April 2025

Held: A Constitution Bench held by a majority of four to one that a limited power to modify exists under Sections 34 and 37: to sever the invalid portion of an award from the valid where the two are separable; to correct clerical, computational or typographical errors apparent on the face of the record; to modify post-award interest in some circumstances; and, in the case of the Supreme Court, to act under Article 142 of the Constitution, with great care and within constitutional limits.

Significance: The decision qualifies M. Hakeem rather than overruling its central proposition. There is still no general power to modify an award; what exists is a power to sever and to correct what is apparent on the record.

⚠ Correction under Section 33 is a different thing

The tribunal's own power to correct computation, clerical or typographical errors, to give an agreed interpretation and to make an additional award on an omitted claim lies in Section 33, and must be invoked within thirty days of receipt of the award. It belongs to the tribunal and is exercised before any challenge is decided. The limited judicial power recognised in 2025 belongs to the court and is exercised while deciding the challenge. A party who has let the Section 33 period pass cannot ask the court to do what the tribunal could have done.

4. Choosing the Right Course

The defect	The appropriate course
The tribunal had no jurisdiction, or the agreement was invalid	Setting aside; there is nothing to cure
The award decides a matter outside the submission, but the rest is independent	Partial setting aside under the proviso to Section 34(2)(a)(iv)
The reasoning on an issue is thin or unclear, though the tribunal did decide it	Remission under Section 34(4), on a written request
The tribunal did not decide a claim at all, or gave no reasons on it	Setting aside; the defect is not curable under Section 34(4)
A figure in the award is the result of an arithmetical slip	Correction by the tribunal under Section 33 if in time; otherwise the narrow judicial power to correct errors apparent on the record
The court considers the sum awarded too high on the evidence	Neither; that is a review on the merits, which Explanation 2 and the proviso to Section 34(2A) forbid

5. Practical Points

Ask for remission in writing, and ask early. A request made only in oral argument, or after the court has indicated that it will set the award aside, comes too late.
Plead severability expressly where part of the award is unobjectionable, and identify which findings stand independently of the part attacked.
Do not frame a merits argument as a request for modification. The court cannot substitute its own assessment, and an application so framed invites dismissal.
Use Section 33 while it is available. Many defects that later become grounds of challenge are curable by the tribunal within thirty days of the award.
Remember the consequence of setting aside. The claim is not lost, but it must be re-arbitrated, and Section 43(4) preserves the time.

6. Related Topics and Provisions

Topic or provision	Connection
Challenge to the Arbitral Award: Section 34	The grounds, limitation and the proceeding as a whole
Making of the Arbitral Award: Sections 28 to 33	Reasons, and the tribunal's own power of correction
Sections 37(1)(c) and 43(4), A&C Act, 1996	Appeal, and exclusion of time where an award is set aside
Section 36, A&C Act, 1996	Enforcement where the challenge fails
Sections 15 and 16, Arbitration Act, 1940	The powers of modification and remission that were not carried forward