Abstract

The Supreme Court case of Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025 INSC 605) addresses the critical question of the scope of judicial intervention in arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996. Arising from a dispute involving allegations of sexual harassment, defamation, and termination of employment, the case saw an arbitral award of ₹2 crore modified by a single judge of the Madras High Court to ₹3.6 crore, which was later reduced by a division bench to ₹2.05 crore, citing computational errors. The Court clarified that Section 34 does not confer power to modify an arbitral award on merits; the jurisdiction is limited to setting aside the award, either wholly or partially, where the award is severable and issues are distinct. Partial setting aside is permissible only when invalid portions can be separated without affecting the valid parts. However, limited corrective powers exist under Section 37 to rectify clerical, computational, or typographical errors, and courts may intervene in post-award interest to ensure fairness. The judgment rejects broader modification powers, including arguments based on the maxim omne majus continet in se minus, emphasizing the preservation of arbitral finality and party autonomy. While Article 142 powers must be exercised with restraint, the ruling balances minimal judicial oversight with the efficiency of arbitration, preventing unnecessary remittal for fresh proceedings in cases of minor defects.

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