Gayatri Balaswamy And The Scope Of Section 34: A New Era For Arbitral Award Intervention?
- IJLLR Journal
- Jul 15
- 2 min read
Ishita Bhatia, Jindal Global Law School
FACTS OF THE CASE
The dispute in Gayatri Balasamy v. ISG Novasoft Technologies Ltd., revolved around the extent to which Indian courts can interfere with arbitral awards under the Arbitration and Conciliation Act, 1996. Gayatri Balasamy and ISG Novasoft Technologies Ltd. were parties to a professional arrangement that eventually soured, prompting one of them to invoke arbitration. The arbitral tribunal passed an award, which was then challenged under Section 34 of the Act.
Now, ordinarily, a Section 34 challenge would involve the court either setting aside the award or remanding it to the tribunal for reconsideration. But in this case, things took a more complex turn. The court didn’t just review the award, it went a step further and modified it, making changes to specific components like the amount of compensation and the post-award interest. This judicial modification triggered a far-reaching legal debate.
Traditionally, courts in India have interpreted their powers under Section 34 quite narrowly. As laid down in Project Director, NHAI v. M. Hakeem (2021), courts were only seen as having two clear options when faced with an arbitral award: either annul it or send it back to the tribunal for limited corrections under Section 34(4). The notion that a court could alter an award rather than just invalidate or remit it was seen as inconsistent with the Arbitration Act’s text and structure.
However, this wasn’t the full picture. In multiple earlier and subsequent decisions such as Vedanta Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd, Tata Hydro- Electric Power Supply Co. Ltd. v. Union of India, and Numaligarh Refinery Ltd. v. Daelim Industrial Co. Ltd, courts had, in fact, gone ahead and modified awards, sometimes without even acknowledging the limits imposed by Hakeem. These inconsistencies started piling up, creating confusion about the true scope of judicial review under Indian arbitration law.
