Gujarat Water Supply and Sewerage Board v. Saryu Plastics Pvt. Ltd.
Background
A government water supply board had awarded PVC pipe supply contracts to a small-scale manufacturer between 1998-2002, but later blacklisted the company after an audit found alleged excess payments. Years later the dispute went to arbitration, and the Arbitrator awarded the company roughly Rs.1.01 crore with simple interest for the period the case was pending. The company then asked the Arbitrator, and later the Commercial Court, to change "simple interest" to "compound interest" in the award, and the Commercial Court, while exercising what it called review jurisdiction, actually granted that change.
Decision Breakdown
The Supreme Court held that Section 33 of the Arbitration and Conciliation Act only allows correction of computational, clerical, or typographical errors in an award. It is not a tool to revisit or change the Arbitrator's substantive findings. Since the Arbitrator had consciously and deliberately chosen to award simple interest (not compound), converting that to compound interest was a substantive change to the merits of the award, not a correction of any slip or arithmetical mistake, and therefore fell entirely outside what Section 33 permits. The Commercial Court had exceeded its jurisdiction by making this substitution, so the Supreme Court set aside both the Commercial Court's order and the High Court judgment that upheld it, restoring the Arbitrator's original award of simple interest at 21.675% for the relevant period.
Lesson Learnt
A court or tribunal's limited power to "correct" an arbitral award covers only clerical, typographical or arithmetical slips. It cannot be used, however framed, to change a deliberate substantive decision like the type or rate of interest awarded; that requires a proper challenge to the award itself, not a correction application.