ourt clarified that courts can do so in rare instances, such as correcting calculation errors, adjusting interest, or making other simple changes, without nullifying the entire award. In exceptional cases, Article 142 of the Constitution can also be invoked, but only in a limited manner.
Justice K.V. Viswanathan dissented. He expressed concerns about the court’s authority to modify post-award interest and use Article 142 for such modifications, suggesting that any necessary changes should be handled by remitting the matter back to the arbitral tribunal.
The majority ruling can reshape India’s arbitration landscape, as it eliminates the need for businesses to re-arbitrate disputes from scratch, reducing costs and delays.
The case diary
Gayatri Balasamy, a senior executive at ISG Novasoft Technologies, resigned in 2005, alleging sexual harassment by chief executive Krishna Srinivasan. The company did not accept her resignation and instead issued three termination letters. Balasamy filed criminal complaints, while ISG countered with defamation and extortion charges.
The dispute went to arbitration, where the tribunal awarded Balasamy ₹2 crore in compensation. She challenged the award in the Madras high court, claiming it ignored key parts of her case. In 2014, a single judge increased the award by ₹1.6 crore. However, in 2019, a division bench reduced the award drastically to ₹50,000, calling the increase excessive.
Balasamy appealed to the Supreme Court, which in 2024 referred the issue of judicial power to modify arbitral awards to the five-judge Constitution Bench.
The top court ruling comes as the Union law ministry considers amendments to the Arbitration and Conciliation Act. Public consultations on a draft bill closed last November.
Experts believe that granting courts greater power over arbitration outcomes may push businesses to adjust their dispute resolution strategies, potentially favouring arbitration hubs such as Singapore, London, or Dubai over India to minimise legal uncertainty.
Countries like the UK, US, and Singapore already allow courts to adjust domestic arbitration awards, but India’s legal framework does not distinguish between domestic and international arbitration, treating both types of cases the same.