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Section 34 court can correct computational errors in arbitral award without merits review, applying Gayatri Balasamy: Bombay high court
Case Title: Themis Medicare Ltd. v. Mohinder Pal Singh Anand and Anr.
Case Number: Arbitration Petition No. 322 of 2018 with Interim Application No. 3410 of 2026
Citation: (2026) ibclaw.in 4895 HC
Coram: Justice Sharmila U. Deshmukh
The Bombay High Court has partly allowed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, holding that an arbitral award suffering from a computational error can be modified by the Court without undertaking a merits-based evaluation, applying the Supreme Court's ruling in Gayatri Balasamy v. ISG Novasoft Technologies Ltd.
Justice Sharmila U. Deshmukh was considering a challenge by Themis Medicare Ltd. to an arbitral award directing it to pay Rs. 63,17,703 with interest towards the balance consideration for acquisition of shares in Long Island Nutritionals Private Limited. The dispute arose from a Memorandum of Understanding under which the petitioner and another respondent had agreed to acquire 75% shareholding of the claimant's family in the company for Rs. 3 crores, to be discharged partly by arranging repayment of loans availed by the claimant's family and partly by payment towards the value of shares.
The Computational Error
The Arbitral Tribunal had first recorded a finding that the petitioner had arranged and paid a total of Rs. 2,18,88,516 towards discharge of its loan-related liability of Rs. 221 lakhs. However, in the operative portion of its reasoning, the Tribunal proceeded to apply a different method of calculation, deducting the amount paid by the petitioner from the total consideration of Rs. 3 crores payable by both respondents jointly, and then apportioning the resulting shortfall between the two respondents in proportion to their shareholding. This resulted in a substantially higher liability being fastened on the petitioner than what followed from the Tribunal's own findings on payments made.
The Court held that, applying the Tribunal's own findings, the petitioner's liability ought to have been restricted to Rs. 41,11,484, being the balance of Rs. 2,11,484 towards the loan component and Rs. 39,00,000 towards the value of shares, and that the discrepancy in the award constituted an error apparent on the face of the record rather than a matter requiring reappreciation of evidence.
Severability And Correction Under Section 34
Referring extensively to the Constitution Bench decision in Gayatri Balasamy v. ISG Novasoft Technologies Ltd., the Court reiterated that a Section 34 Court possesses limited power to modify an arbitral award, including by severing an invalid portion from a valid one and by correcting clerical, computational or typographical errors that do not require a merits-based evaluation. The Court also referred to the Delhi High Court's decision in Jagdish Kaur v. Jasbir Singh Sandhu, which had similarly corrected an arithmetical error in an award without disturbing the underlying findings.
Applying these principles, the Court held that the determination of the petitioner's liability was otherwise well supported by reasons, and that the error lay only in the final computation, which could be corrected without setting aside the award in its entirety.
Modification Of Interest
The Tribunal had awarded interest at 18% per annum for the period from June 2012 to December 2013, and at 9% per annum thereafter, without indicating any basis for the differential rates. Noting the absence of any contractual bar on interest, and the absence of reasons for the higher rate for the initial period, the Court modified the award to provide for a uniform rate of 9% per annum from 1 June 2012 till realisation.
Order
The Court accordingly modified the award to direct the petitioner to pay Rs. 41,11,484 with interest at 9% per annum from 1 June 2012 till payment or realisation, while leaving the rest of the award, including the rejection of the petitioner's counterclaim, undisturbed. The petition was partly allowed with no order as to costs, and the connected interim application was disposed of as not surviving.
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