Legal Analysis: Gujarat Water Supply and Sewerage Board v. Saryu Plastics Pvt. Ltd

Citation: 2026 INSC 552
Court: Supreme Court of India
Bench: A Division Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
Date of Decision: May 26, 2026
Nature of Judgment: Civil Appeals arising out of the judgment of the Gujarat High Court dismissing appeals against the Commercial Court’s order modifying an arbitral award.

Synopsis of the Judgment

The Supreme Court dealt with a challenge to an arbitral award on multiple grounds: expiry of the arbitrator’s mandate, violation of natural justice, and improper modification of the award by the Commercial Court under Section 33 of the Arbitration and Conciliation Act, 1996. The arbitral proceedings were protracted over three and a half years due largely to the Board’s dilatoriness. The arbitrator had unilaterally extended the mandate on several occasions, and the Board never raised any objection until after the award was passed. The Court held that the Board had acquiesced to the extensions and was estopped from challenging the award on the ground of mandate expiry. It further held that the proceedings were conducted in accordance with natural justice, and that the Board’s own conduct was responsible for the delays. However, the Court found that the Commercial Court had exceeded its jurisdiction under Section 33 of the Act by substituting “compound interest” for “simple interest” for the pendente lite period, which was a substantive modification, not a correction of a clerical error. Accordingly, the Commercial Court’s modification was set aside, and the original award was restored.

1. Basic Information of the Judgment

• Case Title: Gujarat Water Supply and Sewerage Board v. Saryu Plastics Pvt. Ltd.

• Citation: 2026 INSC 552

• Civil Appeal Nos.: 769-770 of 2026

• Bench: Division Bench (Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe)

• Date of Decision: May 26, 2026

• Court: Supreme Court of India (Civil Appellate Jurisdiction)

• Impugned Order: Judgment dated 11.11.2022 (corrected on 16.12.2022) of the Gujarat High Court dismissing the Board’s appeals against the Commercial Court’s order.

2. Legal Framework

Major Laws and Provisions Involved

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