NHAI vs M. Hakeem & Anr
(2021) 9 SCC 1
Scope of Court Interference: Award Modification
Read the judgmentBackground
NHAI challenged an arbitral award by seeking to modify it under Section 34 of the Arbitration Act. The High Court had partially set aside and partially modified the award by reducing the amount awarded to the contractor. NHAI argued that Section 34 courts have the power to modify awards rather than only setting them aside entirely.
What the court decided
The Supreme Court held definitively that courts exercising jurisdiction under Section 34 do not have the power to modify an arbitral award. The only options are to set aside the award (wholly or in part) or uphold it. This ruling settled a long-running circuit split among High Courts and limits NHAI's ability to use court proceedings to chip away at contractor-won awards.
What this means for your contracts team
If you have won an arbitral award, NHAI cannot get a court to reduce the amount through Section 34 proceedings. The court can only uphold or set aside. Use this judgment in any Section 34 proceeding where NHAI seeks modification. Conversely, if you lose an award, you too cannot ask a court to enhance it. Go back to arbitration if the award can be challenged.
The law is on your side. The documentation has to be too.
NHAI won on contemporaneous records. CivilBolt structures your correspondence and site records so the evidence exists when you need it.