Supreme Court ruling on modification of arbitral awards creating uncertainty abroad: VK Rajah

Indian Supreme Court’s ruling allowing modification of arbitral awards has created uncertainty among arbitration practitioners outside India over how and when courts may alter awards, Vice President of the ICC International Court of Arbitration VK Rajah said on Friday. .Rajah, a former Judge of Appeal of the Supreme Court of Singapore and former Attorney General of Singapore, was speaking at GHAC Arbitration Week 2026 at GIFT City Club, Gandhinagar. The three-day event is being organised by the High Court of Gujarat in collaboration with the Gujarat High Court Arbitration Centre (Domestic & International)..“On other cases, like the cases on the modification of awards, I must say many of us outside India have looked at it with some degree of consternation, because it's going to become quite unpredictable as to how and when some of these principles are going to be applied," he said. .Rajah, however, said India had made considerable progress in international arbitration over the last 25 years.He said the position had changed significantly since the Supreme Court's 2012 ruling in BALCO, before which international arbitrations were treated much like domestic arbitrations.“The changes that we have seen—the mindset as well as legal precedents that have been created since 2012—are more than impressive.”Rajah described India’s arbitration journey as a “jagged trajectory”, with progress accompanied by occasional setbacks..He referred to a speech delivered earlier in the day by former Supreme Court judge Justice Rohinton Fali Nariman, who had criticised a number of recent arbitration decisions.“I think in his inimitable style, Justice Nariman pointed out five cases where there were, in his view—and I think rightly so, not all five in my view, but at least in some of them—lapses, objectively speaking.”.Rajah was more cautious while commenting on the Supreme Court's approach to stamp duty issues in arbitration.He said courts may sometimes have to adopt a creative interpretation of the law to avoid consequences that could seriously disrupt the arbitral process.“Sometimes, and I use the word very cautiously, in extreme circumstances, the problems may require creative application of the law, and I think the Supreme Court has been aware of that.”Rajah also flagged ad hoc arbitration as a serious concern in India..He said while the system may work in some cases, failures had hurt the reputation of arbitration.“It probably works some of the time, but in the instances where it is not working, it has caused enormous damage to the reputation of the process.”He also questioned the Union government’s approach to arbitration, referring to the Finance Ministry’s directive concerning disputes involving public sector entities.Rajah said the government needed to send a consistent message. He said, “You can't say at one time you want to create arbitration centres, you want certain cities to be arbitration hubs, and also say at the same time, ‘Our local companies are not comfortable with arbitration; arbitration doesn't work for them.’”He added that India would first have to build confidence in arbitration among its own lawyers, businesses and users. He said,“If your own lawyers, if your own business community, your own users do not believe in arbitration, you cannot expect foreigners to accept arbitration in India or arbitration centres in India to be credible.”.Rajah also suggested that Gujarat could distinguish itself by having specialist arbitration judges and publishing timelines for deciding arbitration matters..He further called for continuing education for judges, lawyers and arbitrators. He also suggested that Gujarat develop its own international arbitration Bar and arbitration institute to set standards and ensure accountability.Rajah said self-regulation in professions was a “myth” and argued that international arbitration needed stronger accountability for both counsel and arbitrators.He said GHAC should first aim to distinguish itself from other arbitration centres in India before aspiring to become a global hub.