Finality of Arbitral Awards through the lens of Justice KV Viswanathan’s Dissent in Gayatri Balasamy v ISG Novasoft

Dissenting judgments are windows into the future of law. They create space for reform, reflection, and debate. By challenging the majority, they push stakeholders to think differently. Justice KV Viswanathan’s dissent in Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025 INSC 605) is one such moment. It may well become one of the most powerful dissents in the history of arbitration law in India..India’s Arbitration and Conciliation Act, 1996, embodies a legislative commitment to arbitral autonomy and finality. Section 5 restricts judicial intervention to what the Act expressly permits, while Section 34 confines challenges to narrow grounds like fraud, bias, or public policy violations. Unlike the Arbitration Act, 1940, which allowed courts to modify awards, the 1996 Act — aligned with the UNCITRAL Model Law — omits this power, prioritizing finality. The Supreme Court reinforced this in McDermott International Inc. v. Burn Standard Co. Ltd., holding that courts cannot correct awards beyond statutory limits. Section 37 narrows appeals from Section 34 orders, reinforcing a streamlined process..Yet, judicial interpretations have diverged. In Project Director, NHAI v. M. Hakeem, the Court upheld the Act’s restrictive framework, rejecting modification under Section 34. Conversely, Vedanta Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd permitted pragmatic adjustments, exposing a tension between finality and flexibility. This inconsistency framed the Supreme Court’s 2025 decision in Gayatri Balasamy v. ISG Novasoft Technologies Ltd., where the scope of judicial power under Section 34 sparked profound debate..The 1996 Act marked a shift from the 1940 Act, adopting global standards. Its alignment with the UNCITRAL Model Law prioritized efficiency and autonomy, eschewing the 1940 Act’s modification powers. The 2015 amendments refined this framework, narrowing the “public policy” ground under Section 34 to curb judicial overreach, as recommended by the Law Commission’s 246th Report. These changes aimed to bolster finality, yet cases like Vedanta suggest a lingering judicial inclination toward flexibility. Justice Viswanathan’s dissent in Gayatri Balasamy draws on this legislative history, arguing that the Act’s evolution demands strict adherence to its pro-finality ethos..The four-justice majority in Gayatri Balasamy held that courts can modify awards through severance under Section 34(2)(a)(iv), which allows setting aside portions exceeding the tribunal’s jurisdiction. They reasoned: “The power to sever an invalid portion implies a limited power to vary the award."This introduced a limited power of modification into Sections 34 and 37, allowing courts to sever invalid portions, correct clerical errors, and adjust post-award interest. The aim, they argued, was to reduce procedural delays and avoid unnecessary re-arbitration, preserving valid elements while addressing errors.This shift, however, raises serious concerns. While it may offer practical relief, it risks diluting finality and certainty in arbitration, potentially encouraging more challenges. Critics, including myself, agree with Justice Viswanathan that it conflates severance—a procedural fix—with modification, a substantive revision. The undefined scope of “limited” modification could lead to inconsistent rulings, undermining arbitration’s predictability and appeal..Justice Viswanathan’s dissent, spanning pages 62–190, is a masterful defense of the 1996 Act’s intent. He asserts that Section 5’s mandate—“no judicial authority shall intervene except where so provided”—precludes modification. The 1940 Act’s modification powers were omitted, a choice he views as a clear endorsement of finality. He distinguishes severance, which excises non-arbitrable elements, from modification, which reshapes the award’s substance, noting: “The power to modify is not a lesser power than that of setting aside; they operate in separate spheres.".I fully endorse this view. Expanding court powers under the guise of pragmatism risks undermining arbitral autonomy and blurs the boundary between review and appeal. The 1996 Act was designed to prevent such judicial creep, and this decision unsettles its core architecture. Once courts begin “modifying” under the pretext of limited correction, the line between correction and substantive interference becomes dangerously thin—a slippery slope the UNCITRAL Model Law never envisaged. His position aligns with Redfern and Hunter on International Arbitration: “Finality is the cornerstone of arbitration’s appeal”. He critiques Kinnari Mullick v. Ghanshyam Das Damani for limiting Section 34(4)’s remand powers, insisting tribunals—not courts—should correct flaws..Justice Viswanathan frames party autonomy as a constitutional principle, where parties choose arbitration expecting minimal oversight. He rejects Article 142’s use to bypass the Act, citing State of Punjab v. Rafiq Masih to warn against judicial overreach. This upholds India’s separation of powers. Globally, he cautions that modified awards may falter under the New York Convention, as foreign courts could deem them non-arbitral, threatening India’s arbitration hub ambitions—a point Gary Born underscores [Gary B. Born, International Commercial Arbitration]. Unlike the UK’s Arbitration Act 1996, India’s framework lacks safeguards, amplifying the dissent’s urgency..Gayatri Balasamy reflects India’s evolving arbitration jurisprudence. Early cases like ONGC v. Saw Pipes Ltd. broadened the “public policy” ground, inviting overreach. The 2015 amendments curtailed this, signaling a pro-finality intent. Yet, Vedanta and Gayatri Balasamy suggest a flexible countertrend. Justice Viswanathan’s dissent resists this shift, aligning with McDermott and Hakeem to anchor courts to statutory limits, potentially guiding future benches..Dissenting opinions enrich jurisprudence. Justice Rohinton Nariman’s Voice of Dissent traces India’s “Great Dissenters,” like Justice HR Khanna in ADM Jabalpur. In Sabarimala, Justice Indu Malhotra’s dissent shaped progress. Justice Viswanathan’s dissent joins this lineage, seeding future discourse with its clarity and global grounding..The majority’s ruling risks inconsistent rulings, undermining arbitration’s predictability. The Law Commission’s 246th Report urged minimal interference, a principle Justice Viswanathan echoes. Legislative clarification, as the TK Viswanathan Committee suggested, may follow. With developments like this, I am skeptical about India becoming an International Arbitration Hub. Justice Viswanathan’s dissent offers a blueprint for reform, advocating restraint. Its influence could grow if courts or Parliament act..Justice Viswanathan’s dissent in Gayatri Balasamy is a principled stand for arbitral finality, grounded in the 1996 Act’s text, constitutional values, and global norms. The majority’s allowance of modification risks undermining arbitration’s autonomy. I fully endorse Justice Viswanathan’s dissent—it makes a compelling case for restraint. Arbitration must remain a swift, binding alternative to litigation..About the author: Rishabh Gandhi is an Arbitration lawyer and former trial court Judge. Gandhi is also the founder of Rishabh Gandhi and Advocates..Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench..If you would like your Deals, Columns, Press Releases to be published on Bar & Bench, please fill in the form available here.