​The Supreme Court of India has consistently held that courts do not possess the authority to modify arbitral awards under the Arbitration and Conciliation Act, 1996. This position was reaffirmed in the landmark case of Project Director, NHAI v. M. Hakeem (2021), where the Court emphasized that Section 34 of the Act permits courts only to set aside an award on limited grounds and does not extend to modifying its terms .​

In a recent development, a Constitution Bench of the Supreme Court reserved its verdict on whether courts can modify arbitral awards under the Act. During the hearings, the Union government, represented by Solicitor General Tushar Mehta, advocated for legislative amendments to empower courts with modification authority, citing practices in jurisdictions like the US, UK, Singapore, and Australia . Conversely, some senior advocates argued that courts inherently possess the power to modify awards under Section 34, especially to prevent parties from undergoing fresh arbitration proceedings .

As of now, the Supreme Court has not issued a new judgment altering the established legal position. Therefore, courts remain limited to setting aside arbitral awards on specific grounds and cannot modify them unless Parliament enacts amendments to the Arbitration and Conciliation Act, 1996.​

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