A pressure balanced shaft seal assembly that allows a seal to dynamically respond to angular or radial misalignment of a shaft is disclosed. The pressure balanced shaft seal assembly includes a fixed stator (2), a floating stator (4), and a labyrinth seal (3). In one embodiment, the floating stator (4) and labyrinth seal (3) are mounted within an annular groove formed in the fixed stator (2) such that the floating stator and labyrinth seal may move a predetermined amount in the radial direction with respect to the fixed stator. A spherical interface (11) between the labyrinth seal and floating stator may allow the labyrinth seal to pivot with respect to the floating stator during angular misalignment of a shaft around which the pressure balanced shaft seal assembly is mounted. A pressure balancing annular channel (46) formed in the floating stator allows pressurized seal fluid to balance the axial pressure exerted on the floating stator by the process fluid.
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