The erosion of finality in Indian arbitration: A lost opportunity for doctrinal clarity in Gayatri Balasamy
The Supreme Court’s latest Constitution Bench decision ultimately fails to create a robust, non interventionist arbitration regime in India.
Ayush Gupta
Published on: 8 August 2025, 08:28 am
THE SUPREME COURT’S Court’s Gayatri Balasamy v. ISG Novasoft Technologies Ltd., (2025) decision was heralded as a watershed on the scope of Sections 34 and 37 of the Arbitration Act. A 4:1 majority held that courts have a limited power to modify arbitral awards in the interests of justice. On its face, this reading appears more pragmatic than earlier case law, aiming to avoid endless re-arbitration on technical grounds. But a closer look reveals that even this “progressive” stance fails to stem excessive judicial intervention.
In effect, the judgment reopens the door to judicial rewriting of awards, undermining party autonomy and delaying finality. The majority’s interpretation of Sections 34 and 37 still falls far short of the non-interventionist ideal embodied in the UNCITRAL Model Law and reflected in leading arbitration jurisdictions. In particular, the Court’s reasoning on modification, invoking broad principles like actus curiae neminem gravabit and even its plenary Article 142 powers, threatens to dilute the clear legislative scheme and invite further litigation. This was a missed opportunity: in Project Director, NHAI v. M. Hakeem (2021), a Supreme Court bench had emphatically rejected any general modification power, a rule that the 2025 majority in Balasamy could have reaffirmed but instead only partially preserved.
This piece argues that Gayatri Balasamy ultimately fails to create a robust, non-interventionist arbitration regime in India. It sketches the majority’s key holdings but shows how they perpetuate judicial overreach. I further emphasise that sanctioning even “limited” modifications (including correcting interest, severing parts of awards, or applying Article 142) undermines the very principles of party autonomy and finality that arbitration rests upon. The decision’s practical effect is to retain (and even expand) the lengthy Section 34/37 appellate labyrinth, rather than eliminating it. In contrast, common-law jurisdictions like England, Singapore and Australia hew closely to the Model Law’s command that “no court shall intervene” except by express provision.
By contrast, the Indian majority’s approach leaves parties and tribunals exposed to continuing judicial second-guessing. I conclude that the judgment, while attempting to balance efficiency and justice, risks entrenching judicial activism. The real solution lies in clear legislative reform, not incremental judicial expansion of authority.
