R. C. Jain, J.
1. This appeal under Section 37(2)(a) of the Arbitration and Conciliation Act 1996 (hereinafter referred to as the Act) read with Section 151 CPC is directed against the Partial Award dated 31st July, 2002 made by the International Chamber of Commerce, Arbitration Tribunal. Facts and circumstances giving rise to the appeal may be noted as under.
2. On 6th December 1989 the parties entered into a contract for setting up of 817 MW Gas Based Combined Cycle Power Project at Dadri in U.P. at a price of DEM 324,405,000/- equivalent to Rs. 2,190,000,000/-(Rupees Two Thousand One Hundred Ninety Million). At the request of respondent-SAG, three separate contracts were entered into with cross-fall breach clause. One contract was with respondent-SAG, known as the "First Contract" and the other with its associates, namely, Bharat Heavy Electricals Limited (BHEL), New Delhi and the third with Siemens Limited, Bombay. Considerable delay occurred in execution of the contract which was mostly attributable to the appellant-NTPC, due to delay in opening of LCs in favor of the respondent-SAG and in obtaining Import licenses for various equipments from Statutory Authorities. Respondent raised several claims against the appellant-NTPC for losses resulting from delay. On the other hand, the appellant was also facing acute difficulty in getting the critical components and spare parts and tools from the respondent. In order to sort out the said disputes, a high-powered meeting of the parties was held on 6th /7th April, 2000 in which several decisions were taken. One of the decisions taken in the meeting was that the respondent was to supply the critical components and spare parts etc. to the appellant-NTPC on its part and on the other hand appellant-NTPC had agreed to look into the claims raised by the respondent-SAG with more positive approach in view of the fact that there were delays in arranging import licenses and opening of LC by NTPC. It would appear that pursuant to the said decisions, the respondent-SAG supplied critical components etc. but appellant-NTPC did not favorably consider the claims of the respondent-SAG for damages on account of the aforesaid delay.
3. Subsequently, the respondent-SAG made a reference to ICC Court of Arbitration, Paris for settlement of their disputes/claim to compensation on account of delays. In terms of Clause 27 of the Contract, the ICC International Court of Arbitration registered the reference as Case No. 11728/ACS and on 5th May, 2002 issued Terms of Reference. The Terms of Reference of the ICC International Court of Arbitration contained summary of parties' respective claims and counter-claims. The ICC International Court of Arbitration was comprised of three Arbitrators, namely, Mr. Arthur Marriott QC, Chairman and Mr. Justice R.S. Pathak and Mr. Justice A.M. Ahmadi, two former Chief Judges of the Supreme Court of India. It is pertinent to note that while the claim of respondent-SAG related largely to compensation on account of delay on the part of the NTPC in procuring the import licenses and belated opening of the LC in favor of the respondent, the NTPC besides filing their defense to the said claims also filed several counter claims on various counts amounting to hundreds of crores of rupees against the respondent-SAG. The respondent-SAG resisted the said counter claims of the NTPC, inter alia, on the grounds that counter claims were not arbitrable because the claims had been waived and/or abandoned and/or discharged and/or satisfied or compromised and the respondent had failed to fulfilll the conditions precedent to arbitration specified in Clauses 26 and 27 of the General Conditions of Contract. The Terms of Reference dated 5th May, 2002 contain the following issues:-
"The list of issues formulated below is not definitive, and may require expansion or reformulation as the arbitration progresses subject to article 19 of the Rules.
A. Jurisdiction and Formulation of Claims
5.1 Has the Arbitral Tribunal jurisdiction under the Contract (i) to decide the disputes referred to it by the Claimant; (ii) for non- compliance with the procedure envisaged under the Contract as a condition precedent for invoking arbitration?
5.2 Whether the claims / disputes are not bonafide and as such not referable to arbitration?
5.3 Whether the Claimant is estopped in equity and law from raising the claims / disputes against the Respondent?
5.4 Whether the claims now preferred stood abandoned by conduct and latches on the part of the Claimant and are not referable to the arbitrators?
5.5 Are the claims of the Claimant time-barred?
5.6 Has the Arbitral Tribunal jurisdiction under the Contract to hear the counterclaims raised by the Respondent?
5.7 Does the record of Minutes of Meeting dated 6 and 7 April 2000 preclude the Respondent from raising counterclaims and whether the said minutes constitute a binding an enforceable agreement between the parties?
5.8 Are the counterclaims of the Respondent time-barred?
5.9 Do the claims of the Claimant arise under the First Contract?
5.10. Whether the delays alleged by the Claimant constitute a breach of Contract on the part of the Respondent?
5.11 Has the Respondent committed a breach of Contract in relation to the opening of the Letters of Credit and/or the availability of the Import license for the Structural Steel plates?
5.12 (i) Was there delay in opening the Letters of Credit and in the availability of the Import license or to ship Structural Steel plates, on the dates alleged by the Claimant?
(ii) Did the Respondent give an extension of time for nine (9) months?
(iii) If so, did the Respondent accept the implications as stated in paragraphs 13 and 14 of the Statement of Claims?
5.13 Whether the alleged delay in opening Letters of Credit/obtaining or Import license etc. by the Respondent is excusable and justified in terms of the relevant provisions of the Contract and in the facts and circumstances of the case?
5.14 Does responsibility for the delays in the Project rest with the Claimant or Respondent?
5.15 Has the Claimant committed any breaches of Contract as stated by the Respondent in its counter claims and in response to the claims of the Claimant?
5.16 If the Respondent has committed any breaches of Contract is the Claimant entitled to receive damages?
5.17 Is the Claimant entitled to receive compensation under but not limited to Clause 22.2 of the General Conditions of Contract?
5.18 Whether the Respondent is entitled to receive the amount claimed in its counter claims?
5.19 Whether the costs of arbitration are to be apportioned between the parties and if so, to what extent and in what manner?
5.20 Are the parties entitled in law to claim interest, as claimed in their Statement of Claims and in the counter claims, and if so, at what rate and for what period?
4. The Arbitral Tribunal considered the parties' submissions and answered the same by means of a dispensation dated 31st July, 2002 which has been titled as "Partial Award". In the ultimate analysis, the Arbitral Tribunal ruled that the SAG's claim was maintainable and was not barred by limitation while the counter claims of the NTPC were not admissible because the same were caught by the agreement contained in the minutes of meeting (MoM) dated 6th /7th April, 2000. Aggrieved by the said "Partial Award" so far as it had unsuited the NTPC in respect of their counter claims, the NTPC has filed the present appeal.
5. It is pertinent to note here that before this appeal was set down for hearing, it had landed into a controversy at the threshold on the question whether the appeal should be heard by an appellate Bench as FAO or by a Bench exercising Ordinary Original Civil Jurisdiction. Even this question was argued at length and vide an order dated 18th November, 2003, S.K. Mahajan, J.(as his Lordship then was) answered the same thereby holding that the FAO 712/2002(as initially filed) was not maintainable and that an appeal filed under Section 37(2) of the Act against the order of the Arbitral Tribunal was to be heard only by the Bench on the original side of the Court and should be disposed of as such. Accordingly this appeal came up before this Bench.
6. I have heard Mr. Ashwani Kumar, Senior Advocate representing the appellant-NTPC and Mr. Deepankar Gupta, Senior Advocate representing the respondent-SAG at great length and have given my thoughtful consideration to their rival submissions.
7. This appeal raises an important question of law about its maintainability under the provisions of Section 37 of the Act. The question of maintainability of the present appeal under the provisions of Section 37(2)(a) of the Act would in turn depend on the answer to the question whether the impugned dispensation (Partial Final Award) rendered by the Arbitral Tribunal can be said to be an order passed by the Tribunal under Section 16(2) or 16(3) of the Act. Sections 16(1), 16(2) and 16(3) and Section 37 of the Act read as under:
"16. Competence of arbitral tribunal to rule on its jurisdiction.__
(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,__
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised note later than the submission of the statement of defense; hover, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings".
"37. Appealable orders.__
(1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:-
(a) granting or refusing to grant any measure under section 9;
(b) setting aside or refusing to set aside an arbitral award under section 34.
(2) An appeal shall also lie to the Court from an order of the arbitral tribunal__
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section
(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court".
8. A strong plea has been raised on behalf of the respondent/SAG about non-maintainability of the appeal under Section 37(2)(a) of the Act on the premises that by the impugned dispensation the Arbitral Tribunal has not decided the issue of jurisdiction as envisaged by Section 16 of the Act and not the least in the negative but has, in fact, assumed and exercised the jurisdiction and adjudicated upon the counter-claims of the NTPC finally on merits. Mr. Deepankar Gupta, learned senior counsel representing the respondent/SAG has argued that the pleas which can be taken under Sections 16(2) and 16(3) of the Act are pleas regarding the Arbitral Tribunal's jurisdiction and they do not concern the merits of the controversy between the parties. There appears to be no quarrel with this proposition because Section 16(2) of the Act stipulates that such a plea shall be taken not later than the submission of the statement of defense (i.e., before the Arbitral Tribunal considers the merits of a dispute. Section 16(3) stipulates that a plea that the Arbitral Tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the Arbitral proceedings. In other words, such a plea should be confined to the Arbitral Tribunal's capacity or competence to decide what is placed before it and not the merits of the claims or counter-claims, if there are any. It would, in turn, mean that if the Arbitral Tribunal decides any other plea or a plea on merits, the same cannot be said to be a plea either under Section 16(2) or Section 16(3) of the Act.
9. It is further urged that if a dispute is raised before the Arbitral Tribunal whether a claim or counter-claim stands settled, the party raising such a plea will be deemed to have admitted the jurisdiction of the Arbitral Tribunal to settle the said dispute and it will be deemed to be a dispute which the Arbitral Tribunal has jurisdiction to and indeed a duty to decide. Therefore, in the case in hand it is to be seen if the plea raised by the Siemens AG in regard to the counter-claims of NTPC was a plea pertaining to lack of jurisdiction of the Arbitral Tribunal or arbitrability of the said dispute within the meaning of Section 16 or Section 16 of the Act or it was the plea in regard to the merits of the counter-claim and its existence/subsistence on the ground that the counter-claims raised by the NTPC stood settled and did not subsist any longer more particularly in view of the decisions taken by the parties as reflected in the MoM dated 6th and 7th April, 2000.
10. Mr. Ashwani Kumar, learned senior counsel representing the appellant/NTPC with all the vehemence at his command has controverter the above objection of the respondent and submitted that this plea / objection in regard to the non maintainability of the appeal is contrary to the respondent's own pleadings, the Terms of Reference of the Arbitration, the Partial Award in question and the legislative intent incorporated under Sections 16 and Section 37 of the Act. His first and foremost submission in this regard is that parties through their pleadings made it explicit that the objections and pleas raised by the respondents in regard to the maintainability of the counter claims were in the nature of preliminary objections in regard to the jurisdiction of the Arbitral Tribunal to entertain the said counter-claims of the NTPC and about the competence of the Tribunal to arbitrate thereon and that reference of the MoM dated 6th/7th April, 2000 was incidental to the said plea. In this connection the learned counsel for the appellant has extensively referred to the pleadings of the parties filed before the Arbitral Tribunal.
11. NTPC had raised the following Ten claims/counter claims against the SAG.
Claim DESCRIPTION CLAIM AMOUNT No. EURO DEM RS. US $
1.0 Long Term Supply of spares
0 0 0 0
2.0 Non supply of Critical components under Operational Guarantee 0 51,338,159 0 0
3.0 Non supply of Special Tools & Plants by BHEL and Non Critical spares by the Claimants
0 2,218 3,602,560 0
4.0 Loss suffered due to Delay in Trial Operations 0 0 2,518,700,000 0
5.0 Cost of Generator Rotor repair
210,307 1,320,564 41,486,020 0
6.0 Failure of Gas Turbine # 2
0 10,173,159 6,050,000 0
7.0 Excess consumpt- tion of Tile Holders
0 0 0 0
8.0 Cost of Overhaulings
0 570,021 32,637,170 196
9.0 Liability towards TAC rebate
0 0 49,910,000 0
10.0 Excess consumption of Air Filters
0 0 19,653.920 0
Total 210,307 63,404,121 2,672,039,670 196 ,626
12. The SAG in its reply to the above counter claims raised the following preliminary objections in regard to the maintainability/ arbitrability of the said counter claims:-
"Before giving seriatim reply to the counter claims of NATIONAL THEREMAL POWER CORPORATION LIMITED (hereinafter referred to as "NTPC") SIEMENS ATIENGESELLSCHAFT (hereinafter referred to as "SAG") makes the following preliminary submissions/objections:
a) NTPC did not raise any claim(s) on SAG prior to SAG invoking the present arbitration and filing its Statement of Claim. NTPC has for the first time in its pleadings raised claims on SAG in the form of `counter claims'. NTPC not having demanded the amounts prior to filing its counter claims and there being no repudiation of that demand by SAG prior to NTPC filing its present pleadings (counter claims) no dispute whatsoever came into existence with respect to the said alleged claims of NTPC so as to attract the arbitration clause and confer jurisdiction upon the Arbitral Tribunal to entertain and adjudicate upon the claims of NTPC. The purported claims of NTPC are not arbitrable. Further the purported claims of NTPC are also beyond the scope of reference of the present arbitration.
b) Regarding the subject "Special Tools and Plants" of the alleged counter claim No. 3, NTPC accepted resolution towards outstanding supplies as proposed by Bharat Heavy Electricals Limited ("BHEL") by signing Annexures to BHEL's letter dated 20th March, 2000(refer to Vol.5, pages 1 to 7) and BHEL's comments dated 23rd March, 2000(Refer to Vol. 5, page 8). Regarding the alleged counter claim No. 9, a meeting was held with NTPC on 7th May, 1999 (Refer to Vol.5, pages 9 to 15) regarding resolution of pending issues, the Minutes of which clearly state that the respective issue stands deleted. Further, a meeting was held between the representatives of SAG and NTPC on 6/7 April, 2000(Refer to Vol. 5, pagers 16 to 21) and letter dated 23rd March, 2000 referred to in the said Meeting (Refer to Vol. 5, pages 22 to 30) to resolve all issues between the parties. The Minutes of the said Meeting record the confirmation of NTPC and SAG that apart from the issues listed therein, there were no other issues to be resolved in respect of the First and the Third Contracts. The alleged counter claims nos. 2, 6 and 7 were dealt with and resolved at the said Meeting. The other alleged counter claims of NTPC viz. counter claims nos. 1, 3 (subject "Supplies of Non-Critical Spares"), 4,5,8 and 10 which were not the subject matter of the said Minutes, if at all they arise (which is denied) are deemed to have been waived and/or abandoned and/or discharged and/or satisfied in view of the following confirmation of the parties recorded in paragraph 15 of the said Minutes of the Meeting:
"15.0 NTPC and SAG confirm that there are no other issues to be resolved in 1st and 3rd Contracts".
Consequently, NTPC is now debarred and/or estopped from raising any alleged counter claims against SAG. The alleged counter claims of NTPC are non-existent, untenable, barred and not arbitrable. The Arbitral Tribunal has no jurisdiction to entertain or adjudicate upon the alleged counter claims of NTPC.
c) The alleged counter claims of NTPC cannot from the subject matter of the present arbitration in as much as before filing these claims, NTPC has not followed the mandatory procedure laid down in the First Contract for dispute resolution through arbitration. Consequently, the Arbitral Tribunal has no jurisdiction to entertain or adjudicate upon the alleged counter claims of NTPC.
d) The cause of action in respect of the alleged counter claims of NTPC, if at all, arose more than three years before the filing of the alleged counter claims by NTPC. The alleged counter claims of NTPC are barred by limitation under the Indian Limitation Act.
13. The appellant-NTPC disputed the above pleas and contentions of the respondent-SAG by way of rejoinder, inter alia, pleading as under:
"A. "SAG has sought to invoke and rely upon the Minutes of Meeting dated 6/7.4.2000 as a conclusive defense to the Counter Claims preferred by NTPC. It is submitted that the minutes of meeting of 6/7.4.2000 do not conclude or resolve the disputes between the parties arising out of breach of provisions of the relevant contracts between NTPC and SAG in as much as the contents of the said minutes of meeting are sought to be construed at variance with and contrary to the specific provisions of the contract, the discipline of which cannot be abrogated through the defense of the alleged minutes of meeting or by any understanding contrary to the spirit and substance of the contracts in question. In any case, the contents of the minutes of meeting dated 6/7.4.2002 and without prejudice to other contentions of NTPC in this regard, clearly point to the urgency of the need to obtain critical components from SAG and to ensure the performance of SAG's obligations under the contract. Further, the said minutes cannot be construed in law and in fact as a waiver/abandonment / amendment of NTPC's contractual rights including its right to proceed against SAG for breach of contract, in terms of the relevant provisions of a binding contract between the parties, particularly, when the minutes of 6/7.4.2000 do not constitute a modification or amendment of the principal contract. Also, to the extent that any of the provisions of alleged agreement in the minutes of meeting dated 6/7.4.2000 are contrary to or, in conflict with the accrued contractual obligations of the parties, the same would be unenforceable as being contrary to contract, law and public policy and against the contentions of NTPC.
1(a) It is denied that NTPC did not raise any claim(s) on SAG prior to invoking the present arbitration and filing its statement of claim. It is denied that the Counter Claims have been raised by NTPC for the first time in its pleadings. It is specifically controverter that no dispute arose with respect to the Counter Claims and that the same are, therefore, not arbitrable. It is further denied that the arbitration clause does not cover or that the Counter Claim of NTPC do not attract the arbitration clause. It is denied that the Arbitration Tribunal does not have the jurisdiction to arbitrate upon the Counter Claims preferred by NTPC.
(b) With regard to the "Special Tools and Plants" covered by Counter Claim No. 3, it is denied that NTPC has accepted the resolution of the matter as proposed by BHEL by signing Annexure to BHEL's letter dated 20.3.2000 and its comments dated 23.3.2000. It is further stated that the interpretation placed by SAG on the minutes of the meeting dated 7.5.1999 held with NTPC and concerning Counter Claims No. 9 is not correct and is disputed in the overall facts and circumstances leading to present proceedings. It cannot be said that outstanding disputes pertaining to Counter Claim No. 9 stand resolved vide minutes of meeting dt.7.5.1999. It is further denied that minutes of meeting between SAG and NTPC held a meeting on 6/7.4.2000 and/or letter dt.23.3.2000 have been concluded the disputes/issues between parties. It is specifically denied that the Counter Claims of NTPC, particularly, Counter Claim Nos. 1, 3, 4, 5, 8 and 10 which admittedly were not the subject matter of the minutes of meeting dt.6/7.4.2000 were either waived/abandoned or discharged and/or satisfied in terms of para 15.0 of the aforesaid minutes of meeting held on 6/7.4.2000. It is categorically controverter and specifically repudiated that NTPC is debarred and/or estopped from raising its counter claims preferred by NTPC are non-existent, untenable, barred and or not arbitrable. It is denied that this Hon'ble Tribunal has no jurisdiction to entertain or adjudicate upon the Counter Claims of NTPC.
(c) It is denied that Counter Claims of NTPC cannot form the subject matter of the present arbitration for not following the mandatory procedure laid down in the first contract for disputes resolution through arbitration. It is submitted that in the over all facts and circumstances of the case, NTPC cannot be said to be in breach of any provision of the contract and in so far as the invoking of arbitration is concerned. This Hon'ble Tribunal has the jurisdiction to entertain and adjudicate upon the Counter Claims preferred by NTPC.
(d) In reply to para (d), it is specifically denied that the Counter Claims of the NTPC are barred by limitation, as alleged, or otherwise.
14. On the strength of the above pleas and more particularly the use of certain phrases like "the Arbitral Tribunal has no jurisdiction to entertain and adjudicate upon the counter claims of the NTPC", "the purported claims of NTPC are not arbitral" and "the purported claims of the NTPC are also beyond the scope of reference of the present arbitration", appearing in the reply of SAG, Mr. Ashwani Kumar has strongly urged that use of these clauses would clearly show that the respondent/SAG had, in fact, raised pleas of jurisdiction and non-arbitrability of the counter-claims of the appellant/NTPC. He submitted that the parties are bound by their own pleadings which are to be read as a whole and at a later stage of the proceedings, the parties cannot be allowed to travel beyond what was pleaded by them. In support of his submission, he has sought support from a number of decisions of the Apex Court in the case of Udhav Singh v. Madhav Rao Scindia, (1997) 1 SCC 511; Ram Sarup Gupta v. Bishun Narain Inter College and Ors., (1987) 2 SCC 555 and the Constitution Bench judgment in the case of Bhagwati Prasad v. Chandramaul laying down a general principle of law that no party should be permitted to travel beyond its pleadings and that all necessary and material facts should be pleaded by the party in support of the case set up by it and that the object and the purpose of pleading is to enable the adversary party to know the case it has to meet. It has been further held that pleadings has to be construed as it stands without addition or subtraction of words/or change of its apparent grammatical senses. The intention of the party concerned is to be gathered, primarily, from the tenor and terms of his pleadings taken as a whole.
15. There cannot be any quarrel with the above proposition of law but still the question would be if the pleas of the respondent in their reply are construed as a whole, is it possible to hold that the said pleas were only aimed at raising objection about the competence of the Arbitral Tribunal to entertain the counter-claims or were also meant to raise the objection about the maintainability of the counter-claims of the NTPC on the premises that NTPC had no subsisting claims against the SAG after the meeting of the representative of the parties held between 6th and 7th April, 2000 and decision taken therein. An isolated reading of some of the phrases used in the reply of the SAG do give an impression that the SAG wanted to raise the plea of jurisdiction and/or arbitrability of the counter claims of the NTPC but if the pleadings are considered as a whole, it would be manifest that the pleas and objections in regard to the non-maintainability of the counter claim was, in fact, a plea on the maintainability of the counter claims on merits that all the disputes between the parties except the dispute in relation to the damages payable to the SAG on account of nine months delay stood settled in terms of the decisions contained in the MoM dated 6th and 7th April, 2000. It is pertinent to note here that the Arbitral Tribunal also considered and answered the said objections and pleas of the respondent-SAG taking them as if these were the pleas on merits.
16. Mr. Ashwini Kumar, learned senior counsel has then invited the attention of the Court to the terms of reference of the arbitration in particular to para 4.2 of para-iv of the Terms of Reference dated 2.5.2002 issued by the ICC International Court of Arbitration pursuant to Article 18 of the ICC Rules wherein reference has been made to the respondent's claims and its reply to the counter claims of the petitioner, more particularly to para 4.1 and 4.2, which are as under:
"4.1 The purpose of the following summary is to satisfy the requirements of Article 18 of the ICC Rules, without prejudice to any other or further allegations, arguments or contentions contained in the pleadings or submissions already filed and in such submissions as will be made in the course of this arbitration subject to Article 19 of the Rules.
4.2 Contentions and claims of the Claimant, including contentions in response to the Respondent's counter claims.
(i) The dispute is arbitrable pursuant to Clause 27 of the General of Contract which forms part of the Contract No. CC-6210-100 dated 6 December 1989 between the Claimant and Respondent the Contract").
(ii). The respondent's counterclaims are not arbitrable because:
(1) The claims have been waived and/or abandoned and/or discharged and/or satisfied or compromised.
(2) The respondent has failed to fulfilll the conditions precedent to arbitration specified in clause 26 and 27 of the General Conditions of Contract".
17. Referring to "A - Jurisdiction", Mr. Kumar submitted that it relates to the jurisdiction of the Arbitral Tribunal to adjudicate upon the disputes between the parties which, inter alia, refers to the non-arbitrability of the counter-claims and the bar of limitation. He also made a reference to "the list of issues to be decided" appearing in para-5 of the Terms of Reference. The issues being in two categories, i.e. 'A - Jurisdiction and formulation of claims' and 'B' merits. Issue nos. 5.6 and 5.7 were to the following effect:
"5.6 Has the Arbitral Tribunal jurisdiction under the Contract to hear the counterclaims raised by the Respondent?
5.7 Does the record of Minutes of Meeting dated 6 and 7 April 2000 preclude the Respondent from raising counterclaims and whether the said minutes constitute a binding an enforceable agreement between the parties?
18. Mr. Kumar submitted that the above issues were framed upon the pleadings of the parties and the pleas/case set out by them. According to him, the Arbitral Tribunal treated the question of jurisdiction and limitation (para 5.8 of the Terms of Reference to the preliminary issues as raised by the parties) and the preliminary hearing of the same was held on 3rd to 5th May, 2002 as per the direction of the Arbitral Tribunal contained in the letter dated 22.3.2002, which is otherwise also apparent from para 2.9 of the partial award.
19. Two sets of written submissions (1) titled 'Memoranda/Written Submissions on the preliminary issues of limitation and jurisdiction on behalf of the respondents-NTPC', dated 18.4.2002 and (2) titled as "Written Submissions of the NTPC" dated 16.5.2002, pursuant to the leave granted by the Tribunal at the close of hearing, were filed on behalf of the NTPC before the Arbitral Tribunal. Submissions of the appellant-NTPC dated 18.4.2002 were to the following effect:
Contentions of the Claimants
The Claimants have contended that the counter claims of the respondents are beyond the scope of reference of the present arbitration and not arbitrable as the same have been raised by the respondent for the first time after invoking of Arbitration by the claimants, and that no dispute existed with respect to the said claims before the invocation of arbitration by the claimants. It has also been contended by the claimants that respondents never demanded the alleged amount of counter claims and that there was no repudiation of that demand by the claimants at any stage and counter claims nos. 2, 6 & 7 were resolved at the meetings held on 6/7th April 2000. Regarding the other claims, claimants have contended that in view of paragraph 15 of the aforesaid minutes, the same cannot be agitated by the respondent since the respondent is deemed to have waived/abandoned/ discharged the said claims. Therefore, respondents are barred from raising the counter claims and the same are untenable and barred by limitation and beyond the jurisdiction of the Hon'ble Arbitral Tribunal. Claimants have also raised an objection that before raising the counter claims, respondents have not followed the mandatory procedure laid down in the first contract for dispute resolution through arbitration. The counter claims are therefore beyond the scope of arbitration on this ground also.
Contention of the Respondents:
In response to the claimants aforesaid objections to the counter claims, it is submitted that the counter claims of the respondents arise out of the same contract and had arisen prior to the reference. In any case the occasion for making counter claims arose pursuant to the reference in question and are squarely covered by the arbitration clause.
Minutes of meeting dated 6/7th April 2000 do not finally conclude/resolve the disputes between parties nor do these preclude the respondents from raising counter claims. In any case and without prejudice to the above and in the alternate, it is submitted that a number of counter claims are even otherwise not covered/could not be concluded by the aforesaid minutes. The jurisdiction objection qua the counter claims of the respondents is ex-facie untenable and misconceived.
These counter claims arise out of the breach of provisions of contractual provisions between the parties and that the contents of the said minutes of meeting are being construed at variance with the contrary to specific provisions of the contract.
Contents of minutes of meeting dated 6/7th April 200 clearly reveal that the said minutes were recorded inter alia in view of urgent need to obtain critical components from the claimants which were being unreasonably withheld by them.
Minutes of meeting dated 6/7th April 2000 cannot be construed in law and in fact as a waiver or abandonment of the claims of the respondents for breach of contract and that the said minutes cannot be construed contrary to or by way of a modification or an amendment of the principle contract.
In any case, the pleadings of the parties with respect to the jurisdiction of the Hon'ble Tribunal raise questions of facts and law, which will require to be decided by the Tribunal; the Tribunal having been invested with the power to decide the question of its own jurisdiction on a complete appraisal of the objections as to jurisdiction. (Refer Section 16 of the Arbitration and Conciliation Act, 1996).
The respondents would crave leave of the Hon'ble Tribunal to refer to relevant judicial precedents in support of its submissions on the issues of limitation and jurisdiction."
20. "Written Submissions on behalf of the NTPC in answer to the claims of the SAG dated 16.5.2002" contain submission in regard to the claim of the claimants (SAG) being barred by limitation by the Indian Limitation Act, 1963; the maintainability of the claims by the SAG without following the required procedure as contemplated by clause 27.2 in regard to prior reference to the engineer before raising the dispute for arbitration, jurisdiction and in regard to counter claims by the NTPC. It would be useful to reproduce the submissions made by the NTPC in regard to the objection of the SAG about the maintainability of the counter-claims, which are to the following effect:
"Counter claims by NTPC
SAG has raised preliminary legal objections as to the maintainability of the counter claims of respondent-NTPC and the jurisdiction of this Hon'ble Tribunal to adjudicate the same. These objections have been originally taken in paras 1(A) to (D) of the claimant's rely to the counter claims of NTPC. During the course of the hearing between 3rd to 5th May, the claimants have, however, given up their aforesaid objections except the one founded on the interpretation and implications of the MOM dated 6/7.4.2000.
It is contended by the SAG that counter claim Nos. 2, 6 and 7 no longer survive as these claims stood specifically resolved vide the aforesaid minutes, while claims 1, 3, 4, 5, 8 and 10 are foreclosed and cannot be raised in these proceedings in view of para 15.0 of the Minute. In brief, SAG contends that the MOM dt.6/7.4.2000 constitutes a binding and an irrevocable agreement agreement between the parties covering all counter claims and, therefore, there is no subsisting dispute between the parties as to the counter claims and hence this Hon'ble Arbitral Tribunal has no jurisdiction to deal with the same.
NTPC refutes the said contention in the following premises:
A. Upon a reading the MOM of 6/7.4.2000 as a whole and in its entirety, it is clear that the 'understanding' reflected in the said Minutes was by way of a package deal the fundamental consideration whereof was to amicably settle the principal issues between the parties as were present to their minds at the relevant time without recourse to arbitration. This fundamental consideration has been defeated by SAG rushing to arbitration in clear derogation of the underlying intent and the basic consideration permeating the minutes. Reference is invited inter alia to paras 4.5 and 10 of the said minutes. It is pertinent to emphasize that the present claim of SAG has been dealt with in para 10 of the minutes which at best required NTPC to consider the cost compensation claim of SG on account of alleged delays "with a more positive approach". The underlying import of the understanding in para 10 of the minutes was that SAG would agree to abide by the decision of NTPC after it had considered its claims with a 'positive approach'. Assuming that silence of NTPC on the question of cost compensation claim of SAG amounts to a rejection of the claim, SAG was bound to accept the said decision of NTPC, particularly, when the minutes are read as evidencing a package deal and there is no warrant in the wording of para 10 to suggest that NTPC had at any time agreed to allow SAG's claim on account of alleged delays.
B. Having deliberately and consciously violated the said fundamental understanding permeating the spirit and substance of the arrangement evidenced in the said minutes, SAG cannot now invoke the same against NTPC.
C. Assuming without admitting that the contents of the said MOM constitute a binding and an enforceable agreement, given the special circumstances of this case the obligation of NTPC to perform any of its promises under the said Agreement was dependant upon the performance of its obligations by SAG under the said MOM. SAG having violated the spirit, the conditions and the integrality of the package understanding cannot be heard to bind NTPC to the rigour of the said MOM. It is a well established principle of interpretation of contracts that failure of performance by a party of its obligations under an Agreement would entitle the other party to the contract to treat the contract as discharged. This is particularly so where observance of mutual covenants is fundamental to the agreement in question. Thus, where one party failed to perform a promise which went to whole of the consideration, (as in the present case), the other party was released from performance as the former had not performed that which was a condition precedent to the latter's liability. [Smith v. Wilson (1807) 8 East 437] Reference is invited to Chitty on contracts 1983 Vol. I, Paras 16-169 pg.1618.
D. NTPC submits that assuming without admitting that it had any obligation to perform under the said minutes, the performance thereof was qualified by and dependant upon SAG fulfillling its obligations under MOM in their entirety. In the facts of this case and construing the MOM as a whole, the conclusion is inescapable that the minutes evidenced an intention of the parties to create reciprocal dependent obligations (Ref. Lewison on Interpretation of Contracts, IInd Edn. Para 14.14 Pg 414 at 415.)
E. SAG having repudiated its obligations evidenced in the MON, more particularly in paras 4, 5 and 10 and also with respect to their obligations to supply the critical components, the securing of which was a fundamental consideration of NTPC, SAG cannot now rely on the said minutes either by way of estoppel against NTPC or to plead a foreclosure of the right of NTPC to raise the counter claims in question. It is relevant to mention that till date SAG has not supplied all the required spares and critical components which was also a fundamental consideration of signing of the minutes.
F. NTPC disputes the interpretation placed by SAG on para 15.0 of the minute. The parties could not be ad idem on issues which were not the principal issues and were not present to the minds of the parties as on the date of the signing of the minutes or the negotiations preceding the signing of the minutes.
G. In the respectful submission of NTPC, the general statement in para 15.0 can at best be limited to and made applicable to issues arising out of or connected with those specifically discussed in the MOM since these were critical issues on which parties were negotiating at the relevant time counter claims 1,3,4,5,8,10 were not so discussed and hence not covered by para 15. In any case, NTPC has shown vide its pleadings and the additional compilation of documents filed before this Hon'ble Tribunal on 2.5.2001 that there were various claims and issues raised by NTPC which were evidently not discussed during negotiations leading up to the signing of the Minutes dt.6/7.4.2000 and therefore, could not be the subject matter of any agreement or understanding between the parties.
H. Both in equity and in law such a general statement as contained in para 15.0 of the minutes is unenforceable against NTPC in the facts of this case. Claim No. 5, in any case arose much after the signing of the minutes and could not even otherwise be foreclosed by the minutes of 6/7th April, 2000."
21. Mr. Kumar then extensively referred to several observations made by the Arbitral Tribunal in the impugned partial award in support of his plea that the respondent had, in fact, raised the issue of jurisdiction of the Tribunal to adjudicate upon counter claims and the Tribunal has also decided the same as an issue of jurisdiction. In particular he referred to para 2.10, 4.55 and 4.58 of the impugned partial award, which are to the following effect:
"2.10 After the hearing, the parties made written submissions on 20th May 2002, and further written submissions by way of reply, on 27th May 2002. In summary, the issues which this Final Partial Award decides are firstly, of jurisdiction and secondly, of limitation.
4.55 We turn now to the question of arbitrability of the counterclaims.
4.58 Admissibility of Counterclaims
In the Tribunal's view none of these alleged Counterclaims is admissible. The key question which the Claimant has raised is whether the Settlement Agreement reached between the parties in April and May 2000 operates to bar the majority of these Counterclaims on the ground that they are subject to that settlement and therefore there is no dispute. This argument is advanced by the Claimant in respect of the second, third, fourth, fifth, sixth, eighth, ninth and tenth Counterclaims."
22. It is pertinent to note that the Arbitral Tribunal has made the impugned dispensation under the title "Partial Award" having been issued pursuant to the Rules of Arbitration of International Chamber of Commerce. Therefore, it is to be understood and given the same meaning as would be given to a Partial Award under those Rules. ICC Rules of Arbitration do not contain any specific provision for either a preliminary hearing or for making a Partial Award. The rules speak only of making of an award by the Arbitral Tribunal after the hearing. The Arbitration and Conciliation Act, 1996 also contains no provision for making a Partial Award, but it empowers the Arbitral Tribunal to make an interim award or final award. The definition of the term 'Arbitral Award' appearing in Section 2 of the 1996 Act encompasses in its ambit an 'interim award'. It is important to note that though the impugned dispensation is prefaced as Partial Award, but in para 2.10, the Tribunal itself termed the dispensation as 'Final Partial Award'. In order to gather the intention of the Arbitral Tribunal in regard to the real nature of the said dispensation, it is necessary to refer to para 2.9 and 2.10 of the impugned Partial Award which reads as under:-
"The Preliminary Hearing
2.9 By facsimile from the Chairman to the parties dated 22 March 2002, the Tribunal directed that a preliminary hearing on the issues of limitation and jurisdiction take place in New Delhi, India. By facsimile of the Chairman dated 17th April, 2002, the Tribunal directed that the hearing take place on 3rd and 4th May 2002. In the event, the hearing took place on 3rd, 4th and 5th May 2002 in New Delhi.
2.10 After the hearing, the parties made written submissions on 20th May 2002, and further written submissions by way of reply, on 27th May 2002. In summary, the issues which this Final Partial Award decides are firstly, of jurisdiction, and secondly, of limitation."
23. A reading of the above observations would no doubt bring out the mind of the Arbitral Tribunal that the exercise undertaken by the Tribunal at that stage of the proceedings was to deal with the issues of jurisdiction and limitation because immediately below para 2.10 starts the heading "III-Summary Of The Parties Submissions As To Jurisdiction" - Under this heading the Tribunal has largely taken note of the NTPC's objection in regard to the claim of the SAG being time barred and the SAG's objection in regard to the counter-claims of NTPC being non-existent having been settled / concluded in April/May, 2000 besides the same being barred by limitation and being not arbitrable. The Tribunal recorded yet another objection of the SAG in regard to the provisions of the contract having not been complied with before raising the said counter-claims, which limb of the objection, was later on given up by the SAG.
24. The Arbitral Tribunal then takes stock of the material on record in regard to the question of limitation whether the claim of the SAG for damages was barred by time. The question of admissibility of counter-claims has been discussed towards the end of the Partial Award from para 4.58 onwards and has been answered in the following terms:
4.58 In the Tribunal's view none of these alleged Counterclaims is admissible. The key question which the Claimant has raised is whether the Settlement Agreement reached between the parties in April and May 2000 operates to bar the majority of these Counterclaims on the ground that they are subject to that settlement and therefore there is no dispute. This argument is advanced by the Claimant in respect of the second, third, forth, fifth, sixth, eighth, ninth and tenth Counterclaims.
4.60 As will be seen, the majority of the Counterclaims is said to be caught by the Settlement Agreement of the 6th /7th April, 2000 which was the subject of the exchange of correspondence on the 5th May 2000 and the 10th May 2000 to which reference has already been made above. On the face of it the MOM taken in conjunction with the subsequent correspondence clearly show a binding agreement for good consideration whereby a number of claims were compromised. Thus, paragraphs 2,3 and 4 reflect a discussion about critical components and operational guarantee. Those matters were settled as appears from paragraph 5:
" so as to avoid any arbitration on either side in order to ensure supply of critical components of SAG for the forthcoming overhauls. Accordingly, various issue (sic) were discussed and agreements were reached as per the following paragraphs, as a package deal."
4.61 What then follows is a series of specific agreements clearly recorded as such and thereby settling the disputes which then existed. And by paragraph 15 there was express confirmation by both parties.
" that there were no other issues to be resolved in first and third contracts."
4.62 Paragraph 16 made the agreements subject to approval by the NTPC management and as already noted that approval was given by the Respondent's letter of 5th May 2000 and confirmed by the Claimant by its letter of 10th May 2000.
4.63 A number of objections to the binding nature of the Agreement of 6th /7th April, 2000 were taken by the Respondent. None of them have nay merit at all. There are no particulars pleaded in support of the contention that the agreement was procured by deception or by duress. It is plain from the terms of the Respondent's letter of 5th May 2000 that the Respondent fully intended that the Agreement, which it o doubt considered to be to its benefit, would be contractually binding. The letter is only explicable on that basis. It is simply not open to the Respondent to argue otherwise.
4.64 In those circumstances it is clear that the Claimant's argument is right that the second, third, fourth, fifth, sixth, eighth, ninth and tenth Counterclaims are caught by the Settlement Agreement. There are therefore no disputes capable of reference to arbitration.
4.65 As regards the seventh Counterclaim, this is as the Respondent rightly alleges, a mere reservation of rights. There is no admissible dispute. That leaves the first Counterclaim to be considered and as to that it is in the Tribunal's opinion plain, that the Claimant's argument is correct. The correspondence makes it clear in relation to the original pleading that five purchase orders were confirmed and supplied and are therefore being complied with, so no dispute can arise.
4.67 In the light of the Tribunal's findings on the nature and effect of the Settlement Agreement of 6th /7th April 2000, it is unnecessary for the Tribunal to consider any additional defenses to the Counterclaims. They are not admissible and no capable of being included in this reference to arbitration."
The Tribunal has summarized its findings under the heading "IV-Determination" - and concluded as under in para 5.7:-
"5.7 Accordingly, the Tribunal rules that Claimant's claim is admissible, there being no limitation bar. The first Counterclaim is not admissible, both in its original form and as amended. The second, third, fourth, fifth, sixth, eighth and ninth Counterclaims which have been the subject of a prior binding settlement are not admissible and the seventh Counterclaim is not admissible there being no dispute."
25. A careful perusal of the written submissions and above observations, discussion and conclusions in the Partial Award would show that although to begin with the Arbitral Tribunal took the objections of the SAG against the counter-claim of NTPC as the jurisdictional issues which it had intended to answer as the issues of jurisdiction and limitation, but as it would be apparent from the written submissions filed on behalf of the parties before the Arbitral Tribunal and taken note in the Partial Award, it would appear that the Arbitral Tribunal did not limit its consideration of the question of entertainability, maintainability and arbitrability of the counter-claims only on the grounds that there were no disputes or they did not fall within the term "disputes/differences" and, therefore, not capable of the arbitration or that they were beyond the terms of arbitral reference or barred by limitation, but also the admissibility of the said counter-claims on merits on the premises that all claims of the NTPC including the counter-claims stood already settled in terms of the MoM dated 6th and 7th April, 2000 and no dispute remained pending between the parties in terms of Clause 15.0 of the said MoM, except in regard to the claim of the SAG for damages on account of delay.
26. Mr. Ashwani Kumar, learned senior counsel representing the appellant/NTPC has urged that in the impugned order the Arbitral Tribunal specifically held that the issues which should have been decided by the order are of jurisdiction and of limitation and, therefore, the decision is confined to the arbitrability of the counter-claims only. Relying on the Supreme Court decision in the case of T.N. Electricity Board v. M/s Bridge Tunnel Constructions and Ors. AIR 1997 SC 1376, Mr. Ashwini Kumar has strongly urged that arbitrability of the claims/counter claims is a jurisdictional issue. In this connection he has referred to para 26 of the said judgment which reads as under:
"....The Arbitrator cannot cloth himself conclusively with the jurisdiction to decide or omit to decide the arbitrability of a particular item or the claim made by the parties. When specific reference has been made to the Arbitrator and the parties raised the dispute of arbitrability, with the leave of the Court/by a direction of the Court in a proceeding under Section 33, he is to decide the arbitrability of the dispute and make a decision while giving reasons in support thereof. The decision of the Arbitrator in granting a particular sum by a non-speaking award, therefore, hinges upon the arbitrability of a dispute arising under the contract or upon a particular item claimed there under. The question of decision by implication does not arise since his decision to decide the dispute on merits hinges upon his jurisdiction to decide the arbitrability of the dispute..."
Reliance is also placed on another decision of the Apex Court in the case of Premier Fabricators, Allahabad v. Heavy Engineering Corporation, Ranchi (1997) 4 SCC 319, para-5 of which reads as under:
"...The Umpire is enjoined to consider a preliminary question of his jurisdiction as to the arbitrability of claims and items 2 to 5 of annexures/A. It being a jurisdictional issue, though the Umpire cannot conclusively clothe himself with his conclusion of arbitrability of Items 2 to 5 which decision is to be taken by a Civil Court as a condition to exercise his power to decide the claims on merits, he is required to decide arbitrability of claims in Items 1 to 5 as a preliminary issue and them proceed to decide the claims on merits..."
27. Mr. Kumar submitted that the finding of the Arbitral Tribunal on the twin issue of jurisdiction and limitation negates the contentions of the respondent/SAG that the Arbitral Tribunal exercised jurisdiction and adjudicated upon the merits of the counter-claim. According to him, the order cannot be construed to decide more than what it purports to decide in express words of the Tribunal. Mr. Kumar then submitted that the legislative intent in incorporating specific provisions relating to the jurisdiction of the Arbitral Tribunal in Section 16 of the Act and providing for appeal under Section 37 of the Act is in consonance with the established principles of public policy that 'no injury is to be without a remedy'. According to him, the incorporation of the said provisions is a departure from the Indian Arbitration Act, 1940 by which the Arbitral Tribunal has been empowered to rule on its own jurisdiction which was being exercised by courts under the 1940 Act. He submitted that Section 16 of the Act in clear and unambiguous terms confers jurisdiction upon the Arbitral Tribunal to rule on its own jurisdiction without any words of limitation as to the nature of jurisdictional objections which can be the subject of an appeal under Section 37 of the Act and that keeping in view the cardinal principle of interpretation that words of a statute must be understood in its natural, ordinary and popular sense without any omission or addition.
28. The issue of maintainability of the appeal under Section 37 of the Act was raised before a Division Bench of the Gujarat High Court in the case of NIRMA LTD. v. LURGI ENERGIE UND ENTSORGUNG GMBH, GERMANY AND ORS. 2003(2) Arb.L.R.241. In the said case the issues of jurisdiction were framed which was treated as preliminary issues by the Arbitral Tribunal conducted under the aegis of ICC Rules . The Court dwelt on the scheme of the Act and brought forth the legislative intent in incorporating Section 16 and 37 of the Act by observing as under:
"13.1 The scheme of Section 16 and 37 is such that the Arbitral Tribunal is empowered to rule on its own jurisdiction. A plea that the Arbitral Tribunal does not have jurisdiction or a plea that the Arbitral Tribunal is exceeding the scope of its authority, has to be decided by the Arbitral Tribunal and, if it takes a decision rejecting that plea, it is duty-bound to continue with the arbitral proceedings and make an arbitral award. And, the party aggrieved by such an arbitral award is permitted to make an application for setting aside the arbitral award in accordance with Section 34. Therefore, obviously, recourse is provided for challenging 'such an award' which is made after the decision rejecting the plea regarding lack of jurisdiction or about Arbitrators exceeding the scope of authority. The decision rejecting any of those pleas and the award made thereafter are clearly distinguishable and by no stretch can be considered to be synonymous for the purpose of Section 16. If the plea regarding jurisdiction or exceeding the scope of authority were accepted, an appeal from such a decision is expressly provided in sub-section (2) of Section 37 where it is called 'an order of the arbitral tribunal'. Thus, the legislature has consciously and clearly considered the decision on jurisdictional aspect to be not an 'award' but an 'order' or a 'decision'..."
29. The question also received the attention of this Court in the case of UOI v. M/s East Coast Boat Builders & Engineers Ltd. 76 (1998) DLT 958 holding that an order under Section 16 of the Act is to be treated as an 'order' and not an 'award' and that the provisions of Section 37 has been consciously enacted to provide relief to the aggrieved party at that stage of the arbitration proceedings where the Arbitral Tribunal decides the question of jurisdiction against it. Mr. Kumar has then submitted that jurisdictional objections could be raised on various counts, but the nature of the objections does not change with the reason invoked in support of the plea of lack of jurisdiction. He submitted that in the case in hand the issues framed and the order passed by the Arbitral Tribunal is specifically in the context of there being subsisting disputes which were arbitrable as a result of the alleged settlement reached through MoM dated 6th/7th April, 2000. In the alternative, he submitted that there could be no final adjudication of the appellant's counter claim without affording an opportunity to the appellant to lead its evidence and without a full trial. He submitted that a final adjudication on merits is entirely inconsistent with the language of the impugned order and also the procedure adopted by the Tribunal and since no evidence was led by the parties, the inevitable conclusion is that the Arbitral Tribunal has decided the preliminary issues of jurisdiction and limitation only in the impugned order and not the merits of the counter-claims as has been urged by the respondent/SAG. According to him, the Arbitral Tribunal having accepted the plea of lack of jurisdiction, raised by the respondent, the impugned order is nothing but an order passed under Section 16 of the Act against which an appeal is maintainable under the provisions of Section 37 of the Act.
30. The core question, which will, therefore, decide the fate of the present appeal is whether the impugned dispensation dated 31st July, 2002 rendered by the Arbitral Tribunal can be said to be an order passed by the Arbitral Tribunal accepting the plea within the meaning of sub-section (2) or (3) of Section 16 of the Act. Mr. Deepankar Gupta, Senior Counsel representing the SAG has argued, and rightly so, that the pleas, which can be taken under sub-section (2) or (3) of Section 16 of the Act are pleas regarding the Arbitral Tribunal's jurisdiction and they do not concern the merits of the controversy between the parties. A bare reading of sub-sections (2) and (3) of Section 16 of the Act would make it manifest that these provisions are to be invoked when a plea is taken by a party that the Arbitral Tribunal does not have jurisdiction or is exceeding the scope of its authority. Such pleas are required to be considered and answered by the Arbitral Tribunal provided the same have been raised not later than the submissions or the statements of the defense. In other words, such a plea has necessarily to be confined to the Arbitral Tribunal's competence to decide what is placed before it and not the merits of the claim or counter-claims filed by the parties. Conversely it would mean that if a plea other than the pleas of the above nature is taken by a party, the same will not be considered to be a plea envisaged either by Section 16 or Section 16 of the Act. Consequently, an order deciding a claim or counter-claim on merits cannot be termed as an order passed by the Arbitral Tribunal accepting or rejecting the plea referred to in sub-section (2) or sub-section (3) of Section 16. A bare reading of Section 37 of the Act would clearly show that an appeal would lie only against an order of the Arbitral Tribunal accepting the plea referred to in sub-section (2) or (3) of Section 16, e.g holding that the Arbitral Tribunal does not have the jurisdiction or accepting the plea that the Tribunal was exceeding the scope of its authority.
31. The provisions of Section 37 take generally the form of Section 39 of the 1940 Act, but they are materially different from the said provision and it must be with a view to minimise the supervisory role of the Courts in arbitral process which is inconsonance with the spirit of the Act as contained in Section 5. Sub-section 1(a) and (b) of Section 37 provide for appeals against the order of Courts granting or refusing to grant interim measures under Section 9 and setting aside or refusing to set aside an award under Section 34. Sub-section 1 emphasise that appeal shall not lie against any other orders. This is a major departure from the 1940 Act whereas Sub-section (1) provides for an appeal from Court orders specified therein. Sub-section (2) provides for an appeal to the Court from an order of an Arbitral Tribunal, (a) accepting the plea referred to in Sub-section (2) of Sub-section (3) of Section 16; and (b)granting and refusing to grant interim measure under Section 17. The words "and from no other orders" appearing in Sub-section 1 of Section 37 are analogous to the provisions of Section 39 of the Arbitration Act, 1940 and came to be interpreted by a Full Bench of this Court in the case of Union of India v. A.S. Dhupar, AIR 1972 Delhi 108 FB, and Hon'ble Supreme Court in the case of Mahindra Supply Company v. ABC, AIR 1962 SC 256, and the Supreme Court held that these words qualify the expression, "an appeal shall lie from the following orders", would qualify Section 39 as well, therefore, by the same analogy the expression "and from no other orders" used in Section 37 of the Act would equally qualify Sections 37 and 37 of the Act. A conjoint reading of Section 5 and Section 37 makes it abundantly clear that the only orders against which appeals would lie are the orders specifically mentioned in Section 37 in case of original decrees passed by a Court and Section 37(2) in respect of orders passed by an Arbitral Tribunal. The contention of the learned counsel for the appellant that the qualifying words used in Sub-section 1 being absent in Sub-section (2) of Section 37 and, therefore, an appeal can also lie from an order of the Arbitral Tribunal even if the said order is strictly not one falling under Clause (a) or (b) has no merits and is liable to rejection because it goes against the very spirit and object of the Act. This Court is of the clear opinion that a Court will be competent to entertain the appeals from an order of the Arbitral Tribunal falling under Clause (a) or Clause (b) of Sub-section 2 of Section 37 of the Act and from no other orders and least against an award interim, partial or final.
32. There is no comprehensive definition of 'award' in the Act, except that contained in Section 2 despite consequences of great importance resulting from an arbitral award. In principle an award is a final determination of a particular issue or claim in the arbitration. An award may be contrasted with orders and directions which address the procedural mechanisms to be adopted in the reference. Occasionally, the Arbitral Tribunal is called upon to give a partial award, particularly where certain item of claim is admitted by the opposite party. Such claim may be in the nature of interim relief or partial satisfaction of the claim. In some jurisdiction and certain sets of arbitration rules, these awards are referred to as partial awards. The 1996 Act uses the expression 'interim awards in contradistinction to 'provisional awards' used in Section 39 and again 'awards on different issues' used in Section 47 of the English Arbitration Act, 1996. There is a sort of distinction between the 'interim award' and the 'partial award'. In that an 'interim award' is the determination of preliminary issues, such as jurisdiction of the Arbitral Tribunal or liability of a party, while 'partial award' has an immediate monetary impact. In practice, by and large, the terms 'interim' and 'partial' are used interchangeable. The ICC Rules provide that the Tribunal may make awards 'whether partial or definitive'. In this sense the word 'partial' has been used for the word 'interim'. Mustill and Boyd, however, suggest that 'the practice has, however, grown up in the international field of avoiding the potentially confusing term "interim" in favor of "partial"'. The effect of interim award is that it can be enforced even if it decides only some of the issues while others remain outstanding before the Arbitral Tribunal. An 'interim award/partial award' is 'final' with respect to the issues which it has decided. It is binding on the parties and persons claiming under them and is proprio vigore, enforceable, as if it were a decree of the court. It is, however, not final with respect to other issues because such issues in the reference remain outstanding before the Arbitral Tribunal. The question as to whether interim award is final to the extent it goes, has been considered by the Supreme Court in the case of Satwant Singh Sodhi v. State of Punjab (1999) 3 SCC 487. The Court observed as under:
"The question whether interim award is final to the extent it goes or has effect till the final award is delivered will depend upon the form of the award. If the interim award is intended to have effect only so long as the final award is not delivered, it will have the force of the interim award and it will cease to have effect after the final award is made. If, on the other hand, the interim award is intended to finally determine the rights of the parties, it will have the force of a complete award and will have effect even after the final award is delivered."
33. It would, therefore, follow that whether the award is labelled as interim or partial but if it finally determines the issues or claims covered by it, such award is presumed to be regular and conclusive and final on the merits of the controversy until impeached upon sufficient grounds in appropriate proceedings. Besides it is possible that the Tribunal may make the first award on some disputes and subsequently make a second award with respect to the rest of the disputes. The impugned awards taken together will make a complete and final award. The Tribunal is functus officio with respect to the disputes finally decided by it in one award. However, its mandate with respect to the rest continues because the submission is not exhausted by reasons of the mere fact that one award, final and complete in relying has been made by it.
34. It is also a settled proposition of law that the power of Arbitral Tribunal, to make an award, is different from its power to issue procedural orders and directions in the course of arbitration proceedings. Such orders and directions are plainly not awards and they are not open to challenge under Section 34 of the Act though they may provide basis for setting aside or remission of the award. The distinction between an award on the one hand, and orders and direction on the other, is relevant because an award is liable to be set aside under Section 34 and such order is appealable under Section 37 of the Act to the Court while an order or direction in itself cannot be challenged.
35. At this stage it would also be desirable to take note of the minutes of the meeting held between NTPC and SAG Limited on 6/7.4.2000 in NTPC, EOC Office with regard to the main plant package for Dadri Gas Project. The important clauses in this MoM are clauses 2.20, 4.0, 5.0, 6.0, 10.0 and 15.0, which are as under:
"2.0 At the outset NTPC expressed its serious concern on non-availability of the critical components required for 2nd Over Haul (OH) of various GTs. NTPC also stated that the delay in OH of GTs shall be to account of SAG and requested SAG to supply all critical components consumed during 1st OH of GTs. the list of which has already been finalised and forwarded to SAG.
4.0. NTPC stated that even though some of the Gts have been operated beyond the specified hours in the circumstances as explained above, there has been no problems with machines and SAG should therefore, not take such a stand. NTPC however, offered that any differential consumption of spares in the machines which were overrun would be taken as NTPC's liability. SAG however maintained that they shall discharge all their obligations in accordance with the provisions of the contracts i.e. The machines which have not been operated in line with O&M manuals should be taken out from the provisions of operational guarantee. SAG also insisted that all the outstanding issues should be settled with a view to close the contracts before they resume the supply of critical components as per above.
5.0 Detailed deliberation were held between NTPC and SAG in order to overcome the above situation and to reach amicable solution so as to ensure availability of critical components of GTs. The parties agreed that the outstanding issues should be settled in the manner of cooperation as has been done in the past so as to avoid any arbitration on either side in order to ensure supply of critical components by SAG for the forthcoming overhauls. Accordingly, various issue were discussed and agreements were reached as per the following paragraphs, as a package deal.
6.0 The critical components consumed in 1st OH(s) have been finalised and the list has been forwarded by NTPC vide its letter dt.23rd March, 2000, SAG shall furnish the schedule of dispatch of all the balance items within two weeks of confirmation of MOM as per para 16.0 below:
In addition, SAG shall supply the items of critical components consumed up to 8th Sept.'99 as per Annexure-2 of NTPC's letter dtd.23.3.2000 (column 'Total consumed'). Further, Title support rings (for 3 GTs) if required to be replaced on 2nd OH of GT4, shall also be supplied by SAG.
With above agreement on list of spares to be replenished by SAG, all obligations under operational guarantee provisions stand fulfillled. However, replenishment of spares as per above agreement shall be SAG's obligation.
10.0 SAG requested that NTPC should look into the claims raised by them with more positive approach in view of the fact that there were delays e.g. in arranging I/L and L/C by NTPC, in total amounting to 15 months approx. SAG sated that they have made above agreements on critical components with the understanding that the claims shall be settled by NTPC keeping in view. NTPC agreed to look into and revert back to SAG.
15.0 NTPC and SAG confirmed that there are no other issues to be resolved in 1st and 3rd Contracts."
36. Mr. Ashwini Kumar, learned senior counsel representing the appellant-NTPC has strongly contended that the MoM dated 6/7.4.2000 does not constitute a binding agreement/settlement between the parties and even assuming that the said MoM constitute a settlement between the parties, the said agreement was envisaged as a package deal casting obligations on both the parties to perform their reciprocal obligations and promises. Referring to clause 15.0 of the MoM dated 6/7.4.2000, Mr. Ashwani Kumar has urged that the same cannot in any way be construed so as to foreclose all rights of the appellant-NTPC in regard to its counter-claims. It is also submitted that the appellant cannot be deemed to have waived all its valuable rights merely because the said MoM records that all disputes stand resolved between the parties. It is also pointed out that to constitute a waiver of a right or claim, the same has to be conscious waiver. In this connection he has placed reliance upon a Supreme Court decision in the case of Sikkim Subba Associates v. State of Sikkim (2001) 5 SCC 629 which lays down as a general proposition of law that waiver involves a conscious, voluntary and intentional relinquishment or abandonment of a known, existing legal right, advantage, benefit, claim or privilege, which except for such a waiver, the party would have enjoyed. If the agreement between the parties is such that its fulfilllment depends upon the mutual performance of reciprocal promises and if the other party fails to perform his own reciprocal promise, he cannot be allowed to assert a claim for performance by the other party. This Court for obvious reasons would not like to examine and answer this question in these proceedings lest it results into prejudice to any of the parties.
37. Mr. Ashwani Kumar has then contended that if this Court holds that the present appeal is not maintainable against the impugned Partial Award, the appellant herein would be left with no remedy to challenge the same through any other proceedings. In this connection, he has referred to a basic principle of law, rooted in equity that law does not suffer an injury to be without a remedy. It is submitted that the appellant would perhaps may not be able to challenge the impugned order / Partial Award through any other arbitration proceedings or in the Civil Court in view of the bar of Section 8 of the Act which encompasses therein a statutory recognition of the well established principle of law that the Civil Courts will not entertain a dispute between the parties if the parties have provided in their contract an arbitrable mechanism for resolution of their disputes. He also submitted that principle of Order 2 Rule 2 CPC may perhaps be invoked against the appellant's remedy if the appellant is unsuited in the present proceedings. In the opinion of this Court, having regard to the scope of the present proceedings, this Court has only to dwell and decide the question as to whether the appeal, as filed, is maintainable or not and if maintainable to decide the same on its merits. This Court is not expected to advise the appellant or for that reason the parties on the question as to whether any remedy by way of what other proceedings was available or may still be available to the appellant in order to challenge the impugned Partial Award. It is for the appellant to have sought his remedy through appropriate legal proceedings and because the appellant has failed to do so, this Court will not be obliged to grant succor to the appellant through wholly misconceived proceedings. Those who approach the Court for grant of relief under a particular statutory provision, must come through appropriate legal proceedings.
38. This Court on a thorough examination of the material obtaining on record, more particularly on a conjoint reading of the pleadings of the parties filed before the Arbitral Tribunal, the Terms of Reference framed by the International Chamber of Commerce, the written submissions filed by the parties before the Arbitral Tribunal prior and after the closure of the hearing, the tenor of the reasoning and finding recorded by the Arbitral Tribunal in its dispensation titled as "Partial Final Award" and on a true construction and scope of the provisions of Section 16 and Section 37 of the Act, is clearly of the view that the impugned dispensation dated 31.7.2002 rendered by the Arbitral Tribunal cannot by any stretch be said to be an order passed by the Tribunal either under the provisions of Section 16 or Section 16 of the Act and in any case deciding the question of jurisdiction in the negative which will fall within the ambit of appealable orders within the meaning of Section 37 of the Act. In the opinion of this Court, the impugned Partial Award is nothing but an Award or interim Award deciding the counter claims of the NTPC finally on merits. This Court, therefore, must hold that the present appeal filed by the NTPC against such a Partial Award under the provisions of Section 37 of the Act is mis-conceived and is not maintainable.
39. Mr. Ashwani Kumar, learned senior advocate has raised a number of arguments to assail the finding of the Arbitral Tribunal as perverse or based on no material or one as against the legal position settled by the Apex Court and various High Courts. On the other hand, Mr. Deepankar Gupta, learned senior advocate has made every possible effort to support the finding of the Arbitral Tribunal in regard to the dismissal of the counter-claim of the NTPC on various legal propositions like accord and satisfaction, waiver of the claim and latches etc. However, once this Court has held that the present appeal under the provisions of Section 37 is not maintainable, it is neither necessary nor desirable for this Court to dwell on those pleas in greater details and to answer the same.
40. In the result, the appeal fails and is hereby dismissed as not maintainable.