Supreme Court could reshape arbitration. Businesses are watching.
Subscribe to enjoy similar stories. A Supreme Court ruling expected in the coming weeks could reshape India's arbitration landscape, determining whether courts can modify arbitral awards instead of merely upholding or setting them aside. For businesses, the decision could bring much-needed efficiency—or complicate arbitration in a country where courts are saddled with 46 million pending cases.
The case, Gayatri Balasamy vs ISG Novasoft Technologies Ltd, is poised to set a major precedent on the extent of judicial intervention in arbitration, a system companies rely on for faster, cost-effective dispute resolution. Read this | Law ministry to discuss SC rulings for Arbitration Act amendment as costs issue persists The case dates back to 2006, when Gayatri Balasamy, then vice president at IT firm ISG Novasoft Technologies, resigned, citing sexual harassment by chief executive Krishna Srinivasan. Her resignation did not take effect, and she later received three termination letters.
She filed criminal complaints against company executives, while ISG countered with defamation and extortion charges. The dispute was referred to arbitration, which awarded Balasamy ₹2 crore. Unhappy with the decision, she approached the Madras high court, arguing that key aspects of her claims had been overlooked.
In 2014, a single-judge bench modified the award, increasing it by ₹1.6 crore. However, in 2019, a division bench slashed the total award to just ₹50,000, calling the earlier increase excessive. Balasamy then moved the Supreme Court, challenging the reduction.
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