{"id":10619,"date":"2025-10-24T05:31:07","date_gmt":"2025-10-24T05:31:07","guid":{"rendered":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/?p=10619"},"modified":"2025-10-30T01:54:07","modified_gmt":"2025-10-30T01:54:07","slug":"case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025","status":"publish","type":"post","link":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/","title":{"rendered":"Case Comment on Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025)"},"content":{"rendered":"<h1><span class=\"ez-toc-section\" id=\"Case_Comment_on_Gayatri_Balasamy_v_ISG_Novasoft_Technologies_Ltd_2025\"><\/span><strong>Case Comment on Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h1><span class=\"ez-toc-section\" id=\"Introduction\"><\/span><strong>Introduction<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>The Supreme Court\u2019s Constitution Bench decision in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025 INSC 605, decided 30 Apr. 2025) represents a significant turning point in Indian arbitration law. At issue was the long-standing question of whether courts under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (\u201cA&amp;C Act\u201d) possess the power not merely to set aside an arbitral award but also to modify it.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #0c0c0c;color:#0c0c0c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #0c0c0c;color:#0c0c0c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Case_Comment_on_Gayatri_Balasamy_v_ISG_Novasoft_Technologies_Ltd_2025\" >Case Comment on Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Introduction\" >Introduction<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Facts\" >Facts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Disposition\" >Disposition<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Background\" >Background<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Earlier_Precedents\" >Earlier Precedents<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#McDermott_International_Inc_v_Burn_Standard_Co_Ltd_2006_11_SCC_181\" >McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#ONGC_v_Saw_Pipes_Ltd_2003_5_SCC_705\" >ONGC v. Saw Pipes Ltd., (2003) 5 SCC 705.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Project_Director_NHAI_v_M_Hakeem_2021_9_SCC_1\" >Project Director, NHAI v. M. Hakeem, (2021) 9 SCC 1.<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Analysis\" >Analysis<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#i_Was_the_Courts_decision_appropriate\" >(i) Was the Court\u2019s decision appropriate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#ii_Does_the_decision_conform_with_existing_law\" >(ii) Does the decision conform with existing law<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#iii_Did_the_Court_adequately_justify_its_reasoning\" >(iii) Did the Court adequately justify its reasoning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#iv_What_are_the_policy_implications\" >(iv) What are the policy implications<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/case-comment-on-gayatri-balasamy-v-isg-novasoft-technologies-ltd-2025\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>This question carried wide consequences for India\u2019s ambition to be a global arbitration hub. While the text of the A&amp;C Act\u2014modeled on the UNCITRAL Model Law\u2014appeared to limit judicial recourse to setting aside awards, inconsistent High Court precedents had permitted limited modifications, generating doctrinal uncertainty. The Constitution Bench was convened to resolve this conflict.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Facts\"><\/span><strong>Facts<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The case arose from an employment dispute between Ms. Gayatri Balasamy, a senior executive, and ISG Novasoft Technologies Ltd. Allegations of sexual harassment and wrongful termination led to arbitral proceedings, where the tribunal awarded Ms. Balasamy \u20b92 crore in damages. The Madras High Court modified this award twice\u2014first increasing it substantially, then reducing it to a nominal \u20b950,000. The core question before the Supreme Court was whether such judicial modification was consistent with the statutory framework of the A&amp;C Act.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Disposition\"><\/span><strong>Disposition<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>By a 4:1 majority, the Constitution Bench held that courts do indeed possess a <em>limited<\/em> power of modification, exercisable in narrowly circumscribed scenarios: (i) where the award contains severable findings, (ii) clerical or computational errors, (iii) correction of post-award interest, and (iv) in exercise of the Supreme Court\u2019s plenary power under Article 142 of the Constitution. Justice Viswanathan\u2019s dissent, however, warned that such a reading impermissibly expands judicial power at the expense of arbitral finality and legislative intent.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"Background\"><\/span><strong>Background<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>The debate over modification powers traces back to the <strong>legislative history of arbitration law in India<\/strong>. Under the Arbitration Act, 1940, courts were explicitly empowered to \u201cremit\u201d or \u201cmodify\u201d awards. However, the A&amp;C Act, 1996, enacted to harmonize Indian law with the UNCITRAL Model Law, deliberately omitted modification as a judicial remedy. Instead, Section 34 confined judicial recourse to <em>setting aside<\/em> awards, with Section 37 providing for appeals against such orders.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Earlier_Precedents\"><\/span><strong>Earlier Precedents<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"McDermott_International_Inc_v_Burn_Standard_Co_Ltd_2006_11_SCC_181\"><\/span><strong>McDermott International Inc. v. Burn Standard Co. Ltd.<\/strong>, (2006) 11 SCC 181.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Court held that courts could not correct or modify an award, but only set it aside and remit the matter to the tribunal.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"ONGC_v_Saw_Pipes_Ltd_2003_5_SCC_705\"><\/span><strong><a href=\"https:\/\/www.legalservicesindia.com\/article\/584\/ONGC-v-Saw-Pipes.html\" target=\"_blank\" rel=\"noopener\">ONGC v. Saw Pipes Ltd<\/a>.<\/strong>, (2003) 5 SCC 705.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>While expanding the scope of \u201cpublic policy\u201d as a ground for setting aside awards, the Court did not authorize modification.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Project_Director_NHAI_v_M_Hakeem_2021_9_SCC_1\"><\/span><strong>Project Director, NHAI v. M. Hakeem<\/strong>, (2021) 9 SCC 1.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Court emphatically reiterated that Sections 34 and 37 do not permit modification of arbitral awards.<\/p>\n<p>Against these binding authorities, some High Courts carved exceptions. In <em>Vedanta Ltd. v. Shenzen Shandong Nuclear Power Construction Co.<\/em> (Delhi HC 2018) and <em>Tata Hydro-Electric v. Union of India<\/em> (Bombay HC 2006), courts modified awards in limited scenarios, citing judicial efficiency. This divergence created doctrinal uncertainty, prompting the reference to a Constitution Bench.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"Analysis\"><\/span><strong>Analysis<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>This section evaluates the Court\u2019s decision against four questions: (i) appropriateness of the decision, (ii) conformity with existing law, (iii) adequacy of reasoning, and (iv) policy implications.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"i_Was_the_Courts_decision_appropriate\"><\/span><strong>(i) Was the Court\u2019s decision appropriate<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The majority\u2019s pragmatic approach acknowledged the inefficiency of forcing parties back to arbitration for minor corrections. Permitting limited modifications reduces costs, expedites justice, and prevents arbitral proceedings from becoming unnecessarily repetitive. For example, where an award grants interest at an unintended rate (say, 18% instead of 8%), requiring parties to recommence arbitration would be absurd. In such circumstances, judicial modification advances the cause of efficiency.<\/p>\n<p>Yet, while desirable in practice, the appropriateness of such a decision must also be tested against statutory fidelity. Courts cannot rewrite statutes simply to promote efficiency\u2014especially in arbitration, where minimal intervention is a foundational principle.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"ii_Does_the_decision_conform_with_existing_law\"><\/span><strong>(ii) Does the decision conform with existing law<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here lies the difficulty. The textualist reading of Section 34(1)\u2014\u201crecourse to a Court against an arbitral award may be made only by an application for setting aside such award\u201d\u2014suggests exclusivity. By contrast, the majority invoked <strong>implied ancillary powers<\/strong> and the maxim <em>omne majus continet in se minus<\/em> (\u201cthe greater power includes the lesser\u201d) to argue that the power to set aside necessarily includes the lesser power to modify.<\/p>\n<p>This reasoning conflicts with earlier binding precedent (<em>M. Hakeem<\/em>), where the Court held that no such ancillary power exists. The dissent rightly underscores that omission of \u201cmodification\u201d from the 1996 Act was deliberate, reflecting India\u2019s alignment with UNCITRAL standards. In that sense, the majority\u2019s ruling does not fully conform with existing law but instead charts a new course through judicial innovation.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"iii_Did_the_Court_adequately_justify_its_reasoning\"><\/span><strong>(iii) Did the Court adequately justify its reasoning<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The majority carefully carved out narrow categories for permissible modification\u2014clerical errors, severable findings, interest correction, and Article 142 intervention. This limitation is commendable. However, several reasoning flaws persist:<\/p>\n<ul>\n<li><strong>Party Autonomy:<\/strong> Arbitration rests on the principle that parties choose a private tribunal to decide their dispute, with courts having minimal interference. By enabling modification, courts risk displacing arbitral autonomy.<\/li>\n<li><strong>Legislative Intent:<\/strong> The deliberate omission of modification powers in 1996 suggests legislative choice. The Court\u2019s reading effectively re-introduces powers the legislature removed.<\/li>\n<li><strong>Comparative Jurisprudence:<\/strong> Under the UNCITRAL Model Law, courts are not empowered to modify awards. India\u2019s deviation may create uncertainty in enforcement abroad, particularly under the New York Convention.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"iv_What_are_the_policy_implications\"><\/span><strong>(iv) What are the policy implications<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>Positive:<\/strong><\/p>\n<ul>\n<li>Reduces delay and costs.<\/li>\n<li>Prevents multiplicity of proceedings.<\/li>\n<li>Provides finality in cases of minor errors.<\/li>\n<\/ul>\n<p><strong>Negative:<\/strong><\/p>\n<ul>\n<li>Risks diluting arbitral finality and party autonomy.<\/li>\n<li>May encourage losing parties to challenge awards seeking judicial \u201ccorrection,\u201d increasing litigation.<\/li>\n<li>Could undermine India\u2019s credibility as an arbitration-friendly jurisdiction, especially in cross-border disputes.<\/li>\n<\/ul>\n<p>A more appropriate policy response would have been to acknowledge the legislative gap and recommend statutory amendment rather than judicially creating modification powers.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>The <em>Gayatri Balasamy<\/em> decision reflects a pragmatic compromise: while the Court preserved arbitral integrity by restricting modification powers to narrow categories, it simultaneously departed from the text and intent of the A&amp;C Act. This raises questions about separation of powers and judicial overreach.<\/p>\n<p>The dissenting opinion, favoring legislative reform over judicial innovation, is arguably more faithful to India\u2019s statutory and international commitments. Yet, the majority\u2019s approach is not without merit\u2014it responds to genuine inefficiencies in the arbitral process and reflects judicial willingness to adapt law to practical realities.<\/p>\n<p>Ultimately, the decision leaves Indian arbitration at a crossroads. If followed cautiously, it could enhance efficiency without undermining autonomy. But if broadly applied, it risks eroding confidence in arbitral finality. The judgment underscores the urgent need for <strong>Parliamentary intervention<\/strong>\u2014perhaps through an amendment re-introducing a carefully circumscribed power of modification\u2014thereby aligning judicial practice with legislative clarity.<\/p>\n\n\n<p><strong>Also Read:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"\/legal\/article-21506-arbitral-awards-limited-judicial-power-to-modify-arbitral-awards-analysis-of-gayatri-balasamy-v-s-isg-novasoft-and-nhai-v-hakeem.html\" target=\"_blank\" rel=\"noreferrer noopener\">Arbitral Awards: Limited Judicial Power to Modify Arbitral Awards: Analysis of Gayatri Balasamy v\/s ISG Novasoft and NHAI v. Hakeem<\/a><\/li>\n\n\n\n<li><a href=\"\/legal\/article-15314-judicial-conundrum-analyzing-the-jurisprudence-of-court-s-power-to-modify-the-award-u-s-34-and-37.html\" target=\"_blank\" rel=\"noreferrer noopener\">Judicial Conundrum: Analyzing The Jurisprudence Of Court&#8217;s Power To Modify The Award U\/S 34 And 37<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Comment on Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025) Introduction The Supreme Court\u2019s Constitution Bench decision in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025 INSC 605, decided 30 Apr. 2025) represents a significant turning point in Indian arbitration law. At issue was the long-standing question of whether courts under Sections 34 and<\/p>\n","protected":false},"author":636,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"two_page_speed":[],"_jetpack_memberships_contains_paid_content":false,"_joinchat":[],"footnotes":""},"categories":[13],"tags":[],"class_list":{"0":"post-10619","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-arbitration-law"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/10619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/users\/636"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/comments?post=10619"}],"version-history":[{"count":0,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/10619\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/media?parent=10619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/categories?post=10619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/tags?post=10619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}