Analysing The Power Of Courts To Modify Arbitral Awards As Set Out In Gayatri Balaswamy Vs M/S. ISG Novasoft Technologies Limited.
- IJLLR Journal
- May 15
- 1 min read
Procheto Dasgupta, Xavier Law School, St. Xavier’s University, Kolkata
ABSTRACT
The Supreme Court of India’s judgment in Gayatri Balasamy v. ISG Novasoft Technologies Limited (2025 INSC 605) resolves a pivotal issue in arbitration law: whether courts can set aside arbitral awards under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. Forming out of a case revolving around a sexual harassment and wrongful dismissal claim, the case involved contrasting judicial precedents on the extent of judicial intervention in arbitral awards. The Constitution Bench, by a 4:1 majority decision, held that the courts have a limited inherent power to correct awards in particular situations, where the invalid part of an award is severable, clerical mistakes are apparent, or post-award interest needs to be corrected. This power, founded on the principle that the greater authority to except includes the lesser authority to alter, is consistent with international arbitration practices and maintains the focus of the Act to minimize judicial intervention. The majority also appreciated the authority of the Supreme Court to alter awards under Article 142 to “do complete justice,” though judiciously. Justice K.V. Viswanathan, in his dissent, contended that Section 34 would allow for setting aside awards alone to maintain the finality of arbitration and prevent ambiguity in international enforcement. This seminal judgment gives precision to the ambit of judicial powers, increases arbitration’s efficiency by limiting re-arbitration, and brings India’s arbitration structure on par with international practice. The ruling has far- reaching consequences in terms of the practice of arbitration, judicial control, and possible legislative amendment in India.
