The Supreme Court’s ruling in Gayatri Balasamy v. ISG Novasoft Technologies Ltd by a 4:1 majority, held that the Court under Section 34 of the Arbitration & Conciliation Act, 1996 has limited power to make certain modifications to arbitral awards.

The judgment isolated the limited power to modify an award to three scenarios – first, where the invalid portions of an award can be severed from the valid portions; second, correcting clerical, computational or typographical errors; and third, modifying post-award interest, in limited circumstances.

A significant sub-theme in the Court’s ruling is its analysis of the power to remit under Section 34(4), which arguably reopens the remand window that had previously been reduced to a pinhole via successive rulings in Dyna Technologies v. Crompton Greaves (2019) and three years later, in I-Pay Clearing Services v. ICICI Bank (2022). Incidentally, it is in the analysis of the reviewing court’s power to remand the matter to the tribunal that the majority and dissent find common ground.

Section 34(4) allows the court reviewing an award to adjourn the proceedings and have the award sent back to the arbitral tribunal and allow the tribunal the “opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the tribunal will eliminate the grounds for setting aside the arbitral award.”

The policy rationale behind Section 34(4) of the Act traces itself back to Article 34(4) of the UNCITRAL Model Law on International Commercial Arbitration, 1985. The Model Law allows a court, when asked to set aside an arbitral award, to pause the process and give the arbitral tribunal a chance to remove defects complained of, so that the award can be saved.

In AKN v ALC, the Court of Appeal in Singapore, while favouring a restrictive reading of the power under Article 34(4) nevertheless described its mechanics as one where “the court must be satisfied that it is appropriate to suspend the setting aside proceedings in order to give the tribunal an opportunity to take such steps as may be required to eliminate the grounds for setting aside. This is plainly a curative provision which enables the court, faced with the fact there has been some defect which could result in the award being set aside, to take a course that might forestall that consequence.”

The curative approach is in line with the Model Law’s larger goal of minimising curial interference and encouraging finality in arbitration, a statutory goal codified in Section 5 of the Act, as well. In its original form, the Model Law offered courts no power to alter the substance of an arbitral award; only to send it back, on a party’s request, “to eliminate the grounds for setting aside the award.” As Justice KV Viswanathan notes in dissent, UNCITRAL expressly declined to grant courts any power to modify awards and the only remedy is to set it aside or remit the award to the tribunal for curative action.

The scope of the remand power under Section 34(4) of the Act was previously examined by the Supreme Court in Dyna Technologies and I-Pay.

In Dyna Technologies, a three-judge Bench clarified Section 34(4)’s curative remit. The Court held that “the power…to cure defects can be utilised in cases where the arbitral award does not provide any reasoning or […] has some gap in the reasoning […] and that can be cured so as to avoid a challenge based on the aforesaid curable defects under Section 34.” Even though the courts cannot modify awards under Section 34, Section 34(4) allows the court to send the award back to the tribunal to cure “minor issues”. The Court held that the absence of proper, intelligible and adequate reasoning could be considered a curable defect under Section 34(4). The purpose of Section 34(4), according to the Court, is to preserve the award by giving the arbitral tribunal a chance to supply missing reasons or explanations. This case clarified that curable deficiencies in reasoning should be distinguished from patent illegality or perversity, which warrant setting aside the award under Sections 34(2) or 34(2A). The case took a restrictive approach, allowing interference of the court only when reasoning was absent or perverse. Essentially, Dyna Technologies demarcated a restrictive boundary around the remand option and circumscribed circumstances in which it could be called to service.

I-Pay picked up from where Dyna left off and narrowed the 34(4) route even further. In I-Pay, a two-judge Bench ruled that when there was no finding at all on a specific issue, remission under Section 34(4) is not permissible. The Court explained that "'finding’ is a decision on an issue; ‘reasons’ are the links between the materials … and the conclusions.” It concluded that Section 34(4) can only be used to fill gaps in reasoning for existing findings, not to supply findings where none were recorded.

The court opined that if the tribunal did not decide on a specific claim at all, sending it back would not be permissible since Section 34(4) cannot be used to create new findings. The realm of the remand was strictly for curing existing but incomplete reasoning. The implication of the I-Pay ruling was that where the cause for a challenge to the award arose out of factors that were unconnected to gaps in reasoning, the remand option under Section 34(4) would be unavailable.

The narrow remit to which the remand power under Section 34(4) was restricted found reiteration, if not a further narrowing, in judgments of High Courts as well. In DMRC v. J Kumar, the Delhi High Court followed I-Pay, to rule that Section 34(4) powers cannot be invoked to allow the tribunal to review its findings after appreciation of evidence. It has been argued here that the Delhi High Court’s ruling in NHAI v. Trichy Thanjavur Expressway Limited constricted the sway of Section 34(4) by ruling that the discretion of the court is limited to “curable defects only” though there is no statutory basis to limit Section 34(4) to ‘curable defects’ or to conflate its scope with correction and interpretation of awards under Section 33. It has also been suggested here that the ‘curable defects’ standard for remission is bound to cause overlaps between the two categories of curable and non-curable defects, with no crystallised test to decide what is curable and what is not.

The Constitution Bench’s analysis of the scope of Section 34(4) in Gayatri Balasamy signals a welcome clawing back from the restrictive position that Dyna Technologies and I-Pay had cemented. Interestingly, the majority presents the remand option as the answer to why the Section 34 court cannot exercise powers of wholescale modification. In a given case, to save the award from being set aside, the tribunal may be permitted to modify the award on remand by the Section 34 court, which itself does not venture into the modification arena. The majority specifically rules,

“Once an order of remand is granted, the arbitral tribunal has the authority to vary, correct, review, add to, or modify the award. Notably, under Section 34(4), the tribunal's powers, though confined, remain nonetheless substantial. This stands in contrast to the court's narrow role under the rest of Section 34.”

The Court thus expands the basis for the Section 34 court’s grounds to remand, as also the tribunal’s post-remand powers, authorising not just technical corrections but also substantive revisions of the award.

Incidentally, it is on this reopening of the 34(4) door that the majority and dissent concur. Justice Viswanathan, in his minority opinion, observed,

“Section 34(4) is the safety valve provided in the A&C Act by the legislature to prevent awards being set aside and to offer a chance to the arbitral Tribunal to adopt a course correction.”

Here, Justice Viswanathan underscores the expansive intent of the legislature which intentionally conceptualised Section 34(4) as a broad remand power - not as a formality but as a substantive opportunity for the tribunal to “course correct” awards that would otherwise be annulled. While demarcating the limited sway of the 34 court’s power to modify an award, the majority cautions that where there exists any “fog of uncertainty”, the court must not alter the award itself but must instead remit it to the tribunal for correction.

In this context, it is relevant that the majority and the dissent in Gayatri Balasamy have referred to the judgments in Dyna and I-Pay with approval and have not expressed any disagreement with either. In fact, Gayatri Balasamy retains the ‘curable defect’ standard while leaving it to the Section 34 court to opine, based on facts, whether the defect complained of in the award is capable of being cured on remand. Nevertheless, the analysis in both opinions allow for a relatively expansive reading of the remand route, which is a restrained and limited departure from the ratio of Dyna and I-Pay. The majority opinion reads in important guardrails to guide an informed use of the remand power:

First, the power of remand permits the court only to send the award to the tribunal for reconsideration of limited aspects, identified in the order under Section 34(4). It is not open-ended.

Second, the power to remand under Section 34(4) is discretionary in nature – once grounds to set aside an award are found, the court may postpone setting aside the award and allow the tribunal an opportunity to “rectify the defect”.

Third, the tribunal ought not to rewrite the award, the primary objective should be to cure the identified defect. A key consideration is the proportionality between the harm caused by the defect and the means available to remedy it.

Fourth, if there is lack of confidence in the tribunal’s ability to come to a fair and balanced decision upon remission, the award must be set aside and not remanded to the tribunal.

Fifth, an order of remand should not be passed when such an order would place the arbitral tribunal in an invidious or embarrassing position; and

Sixth, remand to the tribunal may be inappropriate when it does not serve the interests of the parties, particularly in time-sensitive matters or where it would lead to undue costs and inefficiencies.

The Supreme Court’s treatment of Section 34(4) in Gayatri Balasamy marks a restoration of India’s curative-remand regime. Building onwards from Dyna Technologies and I-Pay, the majority clarified that Section 34(4) remains the exclusive avenue for correcting awards even suggesting that tribunals may “vary, correct, review, add to, or modify” awards once remanded. By rejecting rigid timelines, endorsing oral remand requests, and empowering appellate courts under Section 37 to invoke Section 34(4), the judgment broadens the procedural reach of remission.

Justice Viswanathan’s dissent underscores the legislature’s intent: Section 34(4) is a genuine “safety valve” allowing tribunals to cure substantive and procedural defects, including on the court’s own motion. Together, majority and dissent breathe new life into Section 34(4), freeing it from being reduced to a narrow stop-gap into a flexible tool for preserving awards wherever possible, most importantly, at the hands of the tribunal. This transformation balances arbitration’s finality with equitable correction, ensuring that curable flaws no longer consign entire awards to annulment.

Aditya Chatterjee is a Partner at Keystone Partners, Bangalore.