Published On: January 27th 2026
Authored By: Nilisha Chaterjee
Symbiosis Law School, Hyderabad
- Case Title: GAYATRI BALASAMY vs. M/S ISG NOVASOFT TECHNOLOGIES LIMITED
- Judgement Passed On: 30th April, 2025
- Bench: Chief Justice Sanjiv Khanna, Justice Bhushan R. Gavai, Justice Sanjay Kumar, Justice Kalpathy V. Viswanathan, Justice Augustine G. Masih
- Issues:
- Whether Indian courts are jurisdictionally empowered to amend an arbitral award?
- Whether the power to set aside an award empowered by Section 34 of the Arbitration and Conciliation Act, 1996, provides the power to amend an arbitral award, and if in fact so, to what extent?
- Whether an arbitral award can be amended in light of Article 142 of the Constitution?
Facts:
The appellant, Gayatri Balasamy, an employee of ISG Novasoft Technologies Ltd., filed a criminal complaint of sexual harassment against senior officers. The company, in response, in retaliation, filed complaints of defamation and extortion.
The Supreme Court decided to refer the dispute to arbitration, and the tribunal awarded the appellant ₹2 crores.
Dissatisfied, she invoked Section 34 of the Arbitration and Conciliation Act before the Madras High Court in her challenge of the award, which found the arbitral tribunal to have all the 14 bellowed changes in her favor except the awarding of the ₹2 crore sum. The Madras High Court ordered the arbitral award to be amended in the amount of an additional ₹1.6crores. The dispute was then appealed, invoking Section 37, before a Division Bench of the High Court, which held the additional amount awarded by the Madras High Court was excessive and reduced the amount to ₹50,000.
The appellant has since appealed the decision of the Division Bench to the Supreme Court. The Supreme Court, on February 20, 2024 has referred the dispute to the Constitution Bench of five justices due to the confusion created by conflicting precedents.
Conflicting Precedents:
McDermott International Inc. v. Burn Standard Co. Ltd. (2006) and Project Director, NHAI v. M. Hakeem (2021): Held Section 34 of the Arbitration and Conciliation Act does not empower a court with the power to exceed the limited set of grounds to set aside an arbitral award, and allow for.
Vedanta Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd. (2018) and ONGC Ltd. v. Western GECO International Ltd. (2014): Courts may amend or amend depending on severability.
Decision:
The Supreme Court held, by a 4:1 majority:
- Courts have a limited power to amend arbitral awards due to the limited power prescribed in Sections 34 and 37 of the 1996 Act.
- Courts also have the power to amend “post-award interest” if there is a justifiable basis to do so.
- The majority judgment was written by Chief Justice Khanna.
- Justice Viswanathan dissented on the point that courts are not empowered to amend arbitral awards.
Reasoning of the Majority (CJ Khanna, Gavai, Sanjay Kumar, Masih, JJ.)
- Severability of Arbitral Awards
Section 34(2)(a)(iv) proviso contemplates severability of arbitral awards: parties can as relevant sections and provisions of the awards would factor as either valid or otherwise irrelevant (¶33).
The Majority made references to the doctrine of omen majus continent in se minus (of greater power includes lesser power) to state that part of the power to set aside means part of the award can also be set aside (¶34).
Partial setting aside valid and invalid portions of the award is permissible as a basis for a severable, relevant one (¶36).
- Limited Power of Amendment under Section 34.
When determining arbitration, it remains a primary purpose of arbitration to allow for the process to be quick and cost-effective (¶40).
To have set aside a power which could amend would result in unlikely absurd outcomes, increase costs, delays, and/or result in a rehearing and re-arbitrated (¶41-42).
As a result, the set of State courts’ power of judicial review under Section 34 meant there was a limited power of amendment of an arbitral award (¶46).
- Remand vs. Modification
According to Section 34(4), courts can re-challenge issues to the tribunal for remedial purposes (¶56).
Courts are permitted to remedy the computations, clerical, and typographical mistakes (¶53).
The assailed Kinnari Mullick v. Ghanshyam Das Damani (2017) held that remand could be made suo motu under Section 37 (¶62).
- International Enforcement (New York Convention)
Section 34 permits limited modification; however, it does not impact the enforceability of foreign awards (¶66–67).
- Interest modification Pendente lite interest cannot be modified (¶72–73).
The post award interest under Section 37(1)(b) may be modified by courts where it is found to be unjustified (¶74–76).
- Article 142 of the Constitution.
The Supreme Court can avail itself of Article 142 powers in arbitration matters, but always in keeping with the 1996 Act (¶82).
The Supreme Court should not rewrite or modify the merits of awards (¶84).
The Reasoning of the Dissent (Justice Viswanathan)
- On Severability
Section 34 does recognize the idea of severability but only to set aside claims that are invalid requests to set aside invalid standalone claims, as opposed to modifying awards (¶143–155).
Modification and severability are distinct concepts from each other (¶8).
- On Modification Power
Modification does not exist as a “lesser included power” within setting aside (¶84–93).
Parliament intentionally omitted a modification power function from the 1996 Act (¶95).
Courts cannot rewrite awards, nor can they modify awards without running afoul of the inherent exercise of minimal intervention (¶59, ¶70, ¶76).
Re-arbitration after an award has been set aside is envisioned by Section 43(4) (¶77–81).
- Regarding Remand and Errors
Section 33 permits arbitrators to correct clerical errors. Section 34(4) allows courts to remit matters to fix defects but not to add findings (¶134).
Courts can correct evident errors based on actus curiae neminem gravabit, but cannot alter the substantive terms (¶137, ¶141).
- Regarding International Enforcement
Changing New York Convention awards in India would add layers for foreign enforcement (¶121–123).
Such recognition would require a legislative amendment.
- Regarding Interest
Courts do not modify interest; they would need to remit (¶135-136, ¶156).
- Regarding Article 142
Article 142 is not amenable to amendment of arbitral awards in excess of statutory limitations (¶108–115).
Judgement Description:
The main idea
Justice Viswanathan accepts that Section 34 allows severance – that is, the courts can determine that certain parts of an award contain claims that exceed the limits of the arbitral tribunal’s jurisdiction, and the court can sever those parts – however, he draws a clear line and refuses to accept that severance allows the court a general power of modification. For Viswanathan J., severance is different than modification – severance is simply a case of striking out independent parts that are offending, and the ability to modify the terms of the award is not a lesser-included power of setting aside an award. (¶ 8, ¶143-155).
Severance and modification
The dissent draws a conceptual and practical distinction. Severing means for the court to remove an illegal portion of the award that is entirely self-contained and allow the remainder to stand. For his part, predominantly, Justice Viswanathan has accepted limited severance in cases where the offending portion is standalone and will not affect other findings in the award (¶146, ¶149-¶155).
There is a different category of severance, however, that occurs when there are multiple findings (exceeding claims or damages) contained in an award that are woven together—meaning the court, faced with a challenge to one or more interwoven findings, cannot sever that finding from those that are interwoven. In such cases, the Court is left to either set aside the entire award or reject the challenge—the court cannot simply cut and rewrite those violations of the jurisdiction of the tribunal or of natural justice (¶155).
Interpretation of statutes and legislative intent
A central tenet of the dissent is textualism and respect for Parliament’s intention. The 1996 Act intentionally diverges from the 1940 Act in the absence of any statutory express judicial “modification” power. The dissent says the omission cannot be resolved through judicial construction; the cultivation of a modification power would amount to improper judicial overreach and is inconsistent with the ethos of minimal intervention underpinning the Act (¶59, ¶70, ¶76, ¶90–¶95). The dissent asserts that the legal maxim omne majus continet in se minus is not relevant here because the qualitative character of the limited review granted by Section 34 is fundamentally different from ordinary appellate powers (¶84–¶93).
Remand, correction, and curative
Viswanathan J. acknowledges that existing procedural avenues exist: Section 33 allows tribunals to amend clerical/computational errors and adjudicate claims not previously decided; and Section 34(4) allows for a remand to cure defects. The dissent confines judicial action to these limited contours and a limited handful of recognized common-law exceptions (e.g., actus curiae neminem gravabit) for obvious computational/typographical errors (¶128–129, ¶134, ¶137, ¶140–141). Providing missing findings or reassessing the merits goes beyond judicial jurisdiction.
Overall, Justice Viswanathan’s dissent is grounded in separation-of-powers, textual fidelity to the 1996 Act, a narrow reading of judicial remedies (severance/remand/correction only), and concern for arbitration’s finality and international enforceability.
Holding:
Majority (4:1): Courts have limited powers to modify arbitral awards as per Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996, including modifying interest post-award.
Dissent (Viswanathan, J.): Courts cannot modify arbitral awards; their function is only to set aside or sever invalid clauses.
Conclusion:
The ruling embodies the Indian judiciary’s cautious posture toward arbitration – preferring finality and minimal judicial intervention relative to judicial ingenuity. By calling into question the jurisdiction of courts to revise the arbitral award, the majority confirmed India’s restraint, consistency, and established conformity to best international practice to minimize state intervention, promote predictability, and enhance confidence in its arbitral structure.
However, the dissent is an important counterpoint and a cautionary reminder to policymakers of the possibility of injustice stemming from a rigid approach to arbitral awards. The ruling, when taken as a whole, suggests that unless Parliament expressly amends the Arbitration and Conciliation Act to permit courts to modify an award, Indian courts will continue to have the choice of confirming or overturning the award without amendment. The ruling may affirm the principle of arbitral independence, but it may suggest the possibility of legislative review for the sake of promoting substantive justice.
