Holding

The partial award did not involve a jurisdictional question under Section 16, so an appeal under Section 37(2)(a) is not maintainable; the appropriate remedy is under Section 34.

Summary

The parties entered into a power plant contract, after which the respondent (Siemens) claimed compensation for delays and the appellant (NTPC) filed a counter‑claim. The arbitral tribunal, relying on a Minutes of Meeting that settled many issues, dismissed most of the counter‑claims as settled or barred by limitation, issuing a partial award. NTPC appealed the partial award under Section 37(2)(a) of the Arbitration and Conciliation Act, alleging that the tribunal had declined to exercise jurisdiction by refusing to consider the merits of its counter‑claim. The Supreme Court held that the tribunal’s findings were determinations on the merits, not a refusal to exercise jurisdiction under Section 16(2) or (3), and therefore the appeal under Section 37(2)(a) was not maintainable. The Court clarified that only orders where the tribunal accepts a plea of lack of jurisdiction or exceeds its jurisdiction are appealable under Section 37(2)(a); otherwise, the remedy is a challenge under Section 34. Consequently, the appeal was dismissed.

Issues considered

Whether a partial award that rejects a counter‑claim on the basis of settlement or limitation constitutes a refusal to exercise jurisdiction under Section 16 of the Arbitration and Conciliation Act, 1996.
Whether an appeal under Section 37(2)(a) of the Act is maintainable against such a partial award.

Legislation cited

Arbitration and Conciliation Act, 1996s. 16(2), s. 16(3), s. 17, s. 34, s. 37(2)(a), s. 9

Subjects

ArbitrationPartial awardSection 37Section 16JurisdictionAppealCounter‑claimLimitationSettlement agreementMinutes of Meeting

Judgment

- ,- l
NATIONAL THERMAL POWER CORPORATION LTD.
v.
A

SIEMENS ATKEINGESELLSCHAFT

FEBRUARY 28, 2007
B
[A.K. MA THUR AND P.K. BALASUBRAMANYAN, JJ.]

Arbitration and Conciliation Act, I 996;

Section 37(2)-appeal under- maintainable-Held ,only against orders c
declining to exercise jurisdiction or declining to pass an award and dismissal
of the arbitral proceedings or where the plea of absence of jurisdiction or
a claim being in excess of jurisdiction is accepted by the Arbitral Tribunal
and it refuses to go into the merits of the claim by declining jurisdiction.

The respondent made a claim before the Arbitral Tribunal for D
compensation for the delay on the part of the appellant for whom a works
contract was executed. The appellant not only resisted the claim but also made
a counter claim. The counter claim was sought to be resisted by the
'!'
respondent by contending that all outstanding claims between the parties other
than the one it had put forward in the claim before the Arbitral Tribunal had
E
been settled between the parties as evidenced by a Memorandum of
Understanding arrived at between them described in the proceedings as
Minutes of the Meeting (M.O.M.). The respondent, therefore, contended that
the claims made by the appellant before the Arbitral Tribunal by way of counter
claim was not maintainable or did not survive the M.O.M. Therefore, what
survived for decision before the Arbitral Tribunal was the effect of the M.O.M. F
on the claims of the appellant in the counter claim filed by it. The Arbitral
- ... Tribunal held that other than claims I and 7 in the counter-claim, the other
claims had already been settled as evidenced by the M.O.M. and the said claims
did not survive for adjudication by the Arbitral Tribunal. It held that claim
No. 7 was not really a claim since what the appellant had done was to reserve
G
its right to make a claim on that score. As regards claim No. 1, the Tribunal
held that it was barred by limitation. Thus, in what was called a partial award,
the claim of the respondent was found to be in time and the counter claim
made by the appellant was found to be unsustainable. Appeal against the partial

399 H
I
400 SUPREME COURT REPORTS (2007] 3 S.C.R.

A award of the Arbitral Tribunal by resort to Section 37(2)(a) of the Arbitration ....
and Conciliation Act, 1996 (for short, 'the Act') by the appellant was answered
in the negative by the High Court.

It was contended on behalf of the appellant that that when the arbitrators
refus1:d to go into the merits of its counter claim, they were really declining
B jurisdiction in terms of sub-section (2) of Section 16 of the Act and in such
a situation, an appeal was clearly maintainable under Section 37(2)(a) of the
Act

On the other hand , it was contended by the respondent that it was not
C a cas1: of declining of jurisdiction by the Arbitral Tribunal to entertain the
counter claim made by N.T.P.C., but it was really a case of the counter claim
being found unsustainable for the reasons stated in the award. The partial
award thus made by the Arbitral Tribunal was an award on the counter claim
of the appellant and it was not a case which fell within either sub-section (2)
or sub-section (3) of Section 16 of the Act attracting Section 37(2)(a) of the
D Act
Dismissing the appeal, the Court

HELD : Per Mathur, J.

E 1.1. In view of the settlement of the issues in the minutes of the meeting
the finding of the tribunal that it was unnecessary to consider any additional
defence to the counterclaim and as such not admissible and not capable of
being included in the reference to arbitration, no question of jurisdiction was
involved in the matter so as to enable the appellant to file a direct appeal under
section 37 of the Act. (Para 7) (409-A-HJ
F
1.2. The plea of jurisdiction was not taken by the appellant rather it
was the respondent who raised it in order to meet their counterclaim, however,
it was not in the context that the tribunal has no jurisdiction. (Para 8) "" -
(410-D)

G 1.3. In an arbitration, partial award can be given which can be challenged
under section 34 of the Act but no direct appeal under section 37 is
maintainable unless the jurisdictional issues are involved. (Para 10(
(411-D-E)
2.1. An appeal under section 37(2) only lies if there is an order passed
H under section 16(2) & 16(3) of the Act. (Para 8) [410-CI
40 j

-
NATIONAL TIIERMAL POWER CORPN. LTD v. SIEMENS ATKEINGESELLSCHAFT

Per Balasubramanyan, J (Supplementing) A
I.I. In a case where the Arbitral Tribunal proceeds to pass an award
after overruling the objection relating to jurisdiction, the parties have to
resort to Section 34 of the Act to get rid of that award, if possible. But, if the
Tribunal declines jurisdiction or declines to pass an award and dismisses the
arbitral proceedings, the party aggrieved has remedy under Section 37(2). B
Where the plea of absence of jurisdiction or a claim being in excess of
jurisdiction is accepted by the Arbitral Tribunal and it refuses to go into the
merits of the claim by declining jurisdiction, a direct appeal is provided. Only
an acceptance of a plea of absence of jurisdiction, or of excessive exercise of
jurisdiction and the refusal to proceed further either wholly or partly is made C
directly appealable by Section 37(2)(a) of the Act. [Para 6) [414-C-F)

SBP & Co. v. Patel Engineering Ltd. & Anr., [2005) 8 S.C.C. 618, relied
upon.

Pandurang Dhoni Chougule v. Maruti Hari Jadhav, [1966[ 1SCR102, D
· referred to.

1.2. In a case where a counter claim is referred to and dealt with and a
r plea that the counter claim does not survive in view of the settlement of disputes
between the parties earlier arrived at is accepted, it could not be held to be a
case of refusal to exercise jurisdiction by the Arbitral Tribunal or when an E
Arbitral Tribunal finds that a claim was dead and was not available to be made
at the relevant time or that the claim was not maintainable for other valid
reasons or that the claim was barred by limitation , are all adjudications by
the Tribunal on the merits of the claim and in such a case the aggrieved party
can have recourse only to Section 34 of the Act and will have to succeed on
establishing any of the grounds available under that provision. It would not be F
open to that party to take up the position that by refusing to go into the merits
of his claim, the Arbitral Tribunal had upheld a plea that it does not have
jurisdiction to entertain the claim and hence the award or order made by it,
comes within the purview of Section 16(2) of the Act and consequently is
appealable under Section 37(2)(a) of the Act. [Para 7) [414-8-G[ G
2.1. The finding of the tribunal that in view of the Minutes of the meeting
various claims of either parties were thrashed out and settled, the appellant
cannot pursue most of the claims set out in the counter claim is a finding on
the merits of the claim and not a decision by the arbitral tribunal either under
H
402 SUPREME COURT REPORTS [2007] 3 S.C.R.

A section 16(2) or 16(3) and as such appeal under section 37(2) is not
maintainable. !Para 811415-CI ••
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1953 of2006.

From the Judgment and final Order dated 24.5.2005 of the Delhi High
B Court in OMP No. 462 of 2003.

Ruchi Gaur Narula, Karan Karlik Yambem and Subramonium Prasad for
the Appellant.

C Dipanakar Gupta, Ami Bhatnagar, Anil Sharma, Amit Dhingra, Tamema
Malik, Manu Sharma and Rahul Prasanna Dave for the Respondent.

The Judgment of the Court was delivered by

A.K. MATHUR, J. I. This appeal is directed against the order passed
D by the Delhi High Court dated 24-5-2005 challenging the partial award given
by the International Chamber of Commerce, Arbitration Tribunal on 31-7-2002.

2. Brief facts which are necessary for disposal of this appeal are that
on 6-12-1999 the parties entered into a contract for setting up of 817 MW Gas
i
Based Combined Cycle Power Project at Dadri, U.P. at a price of DEM
E 324,405,000 equivalent to Rs.2, 190,000,000/- (Rupees two thousand one hundred
ninety million). At the request of the respondent- Siemens Atkeingesellschaft
(hereinafter to be referred to as "SAG") three separate contracts were entered
into with cross-fall breach clause. One contract was with respondent -SAG
known as "First Contract" and the other with its associates, namely Bharat
p 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- National Thermal Power
Corporation (hereinafter to be referred to as "NTPC"), due to delay in opening
of Letters of Credit in favour of the respondent-SAG and in obtaining import
licences for various equipments from Statutory Authorities. Respondent raised
G 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, 2002 in which several decisions were taken. One of the
H decisions taken in the meeting was that the respondent was to supply the
NATIONAL TI!ERMAL POWER CORPN. LTD"· SIEMENS ATKEINGESELLSCHAFT [AK. MATHUR J) 403

critical components and spare parts etc. to the appellant-NTPC on its part and A
.. .- t on the other hand the appellant-NTPC agreed to look into the claim raised by
the respondent-SAG with more positive approach in view of the fact that

.. there was delay in arranging import licences and opening of Letter of Credit
by the appellant-NTPC. In pursuance to the decision, the respondent-SAG
supplied the critical components etc. but the appellant-NTPC did not favourably
consider the claim of the respondent-SAG for damages on account of the
B
aforesaid delay. Subsequently, the respondent-SAG made a reference to ICC
Court of Arbitration, Paris for settlement of their disputes/claim to
compensation on account of delay 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 ICC c
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 Justices of the Supreme Court oflndia. While
the claim of the respondent-SAG related largely to compensation on account
of delay on the part of the appellant-NTPC in procuring the import licences
D
and belated opening of the Letter of Credit in favour of the respondent, the
appellant-NTPC besides filing their defence to the said claims also filed
several counter claims on various counts amounting to hundreds of crores
y of rupees against the respondent-SAG. The respondent-SAG resisted the said
counter claims of the appellant-NTPC inter alia on the grounds that the
counter claims were not arbitrable because the claims had been waived and/ E
or abandoned and/or discharged and/or satisfied or compromised and the
appellant had failed to fulfil the condition precedent to arbitration specified
in Clauses 26 & 27 of the General Conditions of Contract. Number of issues
were framed and the Tribunal after considering the submissions of the parties,
gave a partial award on 31-7-2002 and held that the claim of the respondent-
F
SAG was maintainable and was not barred by limitation while the counter
-, claims of the appellant-NTPC was not admissible because the same were
caught by the agreement contained in the minutes of meeting (MoM) dated
6th/7th April, 2000. Aggrieved against this partial award so far as it non-
suited the appellant-NTPC in respect of their counter claims, the appellant-
NTPC directly approached the High Court by filing an appeal. G

3. The preliminary objection which was raised before the High Court
was whether the appeal filed against the partial award of the ICC International
Court of Arbitration was maintainable or not. Learned Single Judge of the
High Court after elaborate discussions on the subject, took the view that the H
404 SUPREME COURT REPORTS [2007] 3 S.C.R.

A appeal under Section 37(2)(a) of the Arbitration & Conciliation Act, 1996
(hereinafter to be referred to as "the Act") was not maintainable. It was ~ .•
observed by the learned Single Judge as follows:

"This Court on a thorough examination of the material obtaining
on record, more particularly on a conjoint reading of the pleadings of
B 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
c 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(2) or Section 16(3)
of the Act and in any case deciding the question of jurisdiction in the
D negative which will fall within the ambit of appelable orders within the
meaning of Section 37(2)(a) of the Act. In the opinion of this Court,
the impugned partial Award is nothing but an Award of 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
E such a Partial Award under the provisions of Section 37(2)(a) of the
Act is misconceived and is not maintainable.

Aggrieved against this orcier, the present appeal has been filed by the appellant-
NTPC.

p 4. We have heard learned counsel for the parties and perused the
records. The question before us in the present appeal is whether the view
taken by learned Single Judge of the High Court that the appeal under Section
37 of the Act is maintainable against the interim award or not. Learned ,.._ -
counsel for the appellant took us through all the details of the pleadings and
tried to persuade us that the question of jurisdiction and limitation is involved,
G therefore, the appeal is maintainable under Section 37 of the Act. The first and
foremost question before us is to examine the provisions of Section 37 read
with Section 16 of the Act. Section 37 of the Act reads as under:

"37. Appelable orders.- (I) An appeal shall lie from the following
orders (and from no others) to the Court authorized by law to hear
H
NATIONAL TIIERMAL POWER CORPN. LTD"· SIEMENS ATKEINGESELLSCHAFT [AK. Mi.THUR. J.] 405

appeals from original decrees of the Court passing the order, namely:- A
~· 1
... (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 a Court from an order granting of
B
the arbitral tribunal-

(a) accepting the plea referred in sub-section (2) or sub-section (3)
of section 16; or

(b) granting or refusing to grant an interim measure under section c
17.

(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."
D
So fi.r as Section 37(l)(a) of the Act is concerned, it contemplates that no
appeal shall lie from any orders except, namely granting or refusing to grant
)" measure under Section 9. Section 9 deals with interim orders and Section
37(J)(b) relates to order passed under Section 34 i.e. setting aside or refusing
to set aside an arbitral award under section 34. Sub-section (2)(a) of Section E
37 provides that appeal shall also lie to the Court from an order of the arbitral
tribunal accepting the plea under sub-section (2) or sub-section (3) of Section
16 and sub-section (2)(b) contemplates appeal against the order granting or
refusing to grant an interim measure under section 17 i.e. at the time of
pendency of the arbitration proceedings by the Tribunal. Sub-section (3) says F
that no second appeal shall lie from the orders passed in appeal under this
section. Now we shall examine the scope of Section 16, which reads as under:
-·--..i
"16. Competence of arbitral tribunal to rule on its jurisdiction.-
(I) The arbitral tribunal may rule on its own jurisdiction, including
ruling on any objections with respect to the existence or validity of G
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
H
406 SUPREME COURT REPORTS [2007) 3 S.C.R.

A (b) a decision by the arbitral tribunal that the contract is null and
void shall not entail ipso jure the invalidity of the arbitration cause. k ~

'f-
(2) A plea that the arbitral tribunal does not have jurisdiction shall
be raised not later than the submission of the statement of defence;
however, a party shall not be precluded from raising such a plea
B 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.
>-
c
(4) The arbitral tribunal may, in either of the cases referred to in
sub-section (2) or sub-section (3), admit a later plea if it considers the
delay justified.

(5) The arbitral tribunal shall decide on a plea referred to in sub-
D section (2) or sub-section (3) and, where the arbitral tribunal takes a
decision rejecting the plea, continue with the arbitral proceedings and
make an arbitral award.

(6) A party aggrieved by such an arbitral award may make an
E application for setting aside such an arbitral award in accordance with
section 34."

Sub-sections (2) & (3) of Section 16 deal with jurisdiction. Sub-section (2) of
Section 16 says that a plea of lack of jurisdiction of the tribunal should be
raised at the earliest i.e. not later than submission of statement of defence and
F it further says that a party shall not be precluded from raising such a plea
merely because he has appointed, or participated in the appointment of an
arbitrator. Sub-section (3) says that the plea that the arbitral tribunal is
exceeding the scope of its authority shall be raised during the arbitral
proceedings. A reading of sub-sections (2) & (3) of Section 16 makes it clear
G that it deals with jurisdiction i.e. that the arbitral tribunal has no jurisdiction
or that the arbitral tribunal has exceeded its jurisdiction. In either of the two
situations, a direct appeal is maintainable under sub-section (2) of Section 37.
Therefore, in the light of this legal position we shall examine whether the
tribunal while awarding an interim award has exceeded its jurisdiction or it had
H no jurisdiction whatsoever.
NATIONAL THERMAL POWER CORPN. LTD•·. SIEMENS ATKEINGESELLSCHAFT [AK MA THUR lJ 407

5. So far as sub-section (2) of Section 16 is concerned, we may A
• • straightaway dispose of the question of lack of jurisdiction on the part of the
tribunal since that is not involved in the present case. But the emphasis in
the present case was that the tribunal had exceeded its jurisdiction in passing
a partial award. The facts have already been mentioned above. It may be
relevant to mention here the relevant clause of the agreement which Jeals
with arbitration. Clauses 26 & 27 of the General Conditions of Contract reads
B
as under:

"26.0. SETTLEMENT OF DISPUTE

26.1. Any dispute(s) or difference(s) arising out of or in connection
with the Contract shall to the extent possible be settled amicably c
between the parties.

26.2. Except as otherwise specifically provided in clause 27.0 herein
under all unsettled dispute(s) or difference(s) arising out of or in
connection with the Contract shall in the first instance be decided by
an engineer whose decision shall be final and binding on the parties. D
27.0 ARBITRATION
)'
27. I. If any dispute or difference of any kind whatsoever shall
arise between the Owner and the Contractor, arising out of the Contract
for the performance of the Works whether during the progress of the E
Works or after its completion or whether before or after the termination,
abandonment or breach of the Contract, it shall, in the first place, be
referred to and settled by the Engineer, who, within a period of thirty
(30) days after being requested by either party to do so shall give
written notice of his decision to the Owner and the Contractor.
F
27 .2. Save as hereinafter provided, such decision in respect of
- _,, every matter so referred shall be final and binding upon the parties
until the completion of the works and shall forthwith be given effect
to by the Contractor who shall proceed with the Works with all due
diligence whether he or the Owner requires arbitration as hereinafter
provided or not.
G

27.3. If after the Engineer has given written notice of his decision
to the parties no claim to arbitration has been communicated to him
by either party within thirty (30) days from the receipt of such notice,
the said decision shall become final and binding on the parties.
H
408 SUPREME COURT REPORTS [2007] 3 S.C.R.

A 27.4. In the event of the Engineer failing to notify his decision as
aforesaid within thirty (30) days after being requested as aforesaid, or
in the event of either the Owner or the Contractor being dissatisfied
with any such decision, or within thirty (30) days, as the case may be,
either party may require that the matters in dispute be referred to
arbitration as hereinafter provided.
B
27.5. All disputes or differences in respect of which the decision
if any of the Engineer has not become final or binding as aforesaid,
shall be settled by arbitration in the manner hereinafter provided.

27 .6. In the event of foreign Contractor, the arbitration shall be
c conducted by three arbitrators, one each to be nominated by the
Owner and the Contractor and the third to be named by the President
of the International Chamber of Commerce, Paris, save as above all
Rules of Conciliation and Arbitration of the International Chamber of
Commerce shall apply to such arbitrations. The arbitration shall be
D conducted at such places as the arbitrators may determine.

27.7. The decision of the majority of the arbitrators shall be final
and binding upon the parties. The expense of the arbitration shall be
paid as may be determined by the arbitrators. The arbitrators may from
time to time, with the consent of all the parties enlarge the time for
E making the award. In the event of any of the aforesaid arbitrators
dying, neglecting, resigning or being unable to act for any reason it
will be lawful for the party concerned to nominate another arbitrator
in place of the outgoing arbitrator."

p 6. In the present case, when the matter was approached by the
respondent herein before the Engineer, he declined and therefore, the matter
was referred to arbitration and the Arbitrators initiated the proceedings. In
that a counter-claim was made. The counter-claim pertained to the issues
which have already been settled in the minutes of meeting of 6th/7th April,
2000. Therefore, the stand taken by the respondent against the counter-claim
G was that it is without jurisdiction and it is not arbitrable because the counter-
claim Nos. 1 to 7 have already been settled by the minutes of the meeting
dated 6th/7th April, 2000. The Arbitrators after considering the counter-claim
came to the finding that as per the minutes of meeting dated 6th/7th April, -
2000 the counter-claims have already been settled. Each of the counter-claim
H was examined by the arbitrators. The Arbitrators in their award observed in
NATIONAL THERMAL POWERCORPN. LTD'· SIEMENS ATKEINGESELLSCHAFT [AK MATHUR, J.] 409

" Para 4.58 that in the Tribunal's view none of these alleged Counterclaims was A
>
f admissible and majority of these claims stood settled. It was also observed
while discussing each of the counter claim that counter-claim Nos. 2,3,4,5,6,7,8,9
& 10 were already covered by the minutes of meeting dated 6th/7th April,
2000 and finally in paragraphs 4.60 & 4.61 it was observed as under:

"4.60 As will be seen, the majority of the Counterclaims is said to B
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 fact of it the MOM taken in conjunction with the
subsequent correspondence clearly show a binding agreement for c
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 D
supply of critical components by 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
E
recorded as such and thereby selling 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."
F
7. The Tribunal also held that certain objections were taken with regard
to the agreement not being binding which was disposed of by the Tribunal
as it had no merits because the agreement was voluntarily made between the
-· .., parties and it was not under duress or by deception. In paragraph 4.64 of the
Award it was concluded that so far as counter claim Nos.2,3,4,5,6,8,9 & 10
were concerned, they were caught by settlement. So far as counterclaim No. 7 G
was concerned, it was mere reservation of right and so far as counterclaim
No. 1 was concerned, it was the opinion of the Tribunal that five purchase
orders were confirmed and supplied and therefore, no dispute could arise.
I Accordingly, the Tribunal held that in view of settlement of issues in the
minutes of meeting dated 6th/7th April, 2000 it was unnecessary for the H
410 SUPREME COURT REPORTS [2007] 3 S.C.R.

A Tribunal to consider any additional defence to the counterclaim and it was
held that they were not admissible and not capable of being included in that
reference to arbitration. Accordingly, this partial award was passed by the
Tribunal. The Tribunal considered all these counterclaims and recoded the
aforesaid finding.
B 8. Now, the only question that remains to be decided in the present case
is whether against the order of partial award an appeal is maintainable directly
under Section 37 of the Act or not. We have considered the submissions of
learned counsel for the appellant and after going through the counterclaim
and the partial award, we are of opinion that no question of jurisdiction arises
C in the matter so as to enable the appellant to file a direct appeal under Section
37 of the Act before the High Court. As already mentioned above, an appeal
under sub-section (2) of Section 37 only lies if there is an order passed under
Section 16(2) & (3) of the Act. Section 16(2) & (3) deals with the exercise of
jurisdiction. The plea of jurisdiction was not taken by the appellant. It was
D taken by the respondent in order to meet their counterclaim. But it was not
in the context of the fact that the Tribunal had no jurisdiction, it was in the
context that this question of counterclaim was no more open to be decided
for the simple reason that all the issues which had been raised in counterclaim
Nos. I to I 0 had already been settled in the minutes of meeting dated 6th/
E 7th April, 2000 and it was recorded that no other issues to be resolved in Ist
and 3rd contracts. Therefore, we fail to understand how the question of
jurisdiction was involved in the matter. In fact it was in the context of the fact
that the entire counterclaims have already been satisfied and settled in the
meeting that it was concluded that no further issues remained to be settled.
In this context, the counterclaims filed by the appellant was opposed. If any
F grievance was there, that should have been by the respondent and not by
the appellant. It is only the finding of fact recorded by the Tribunal after
considering the counterclaim vis-a-vis the minutes of the meeting dated 6th/
7th April, 2000. Therefore, there was no question of jurisdiction involved in
the matter so as to enable the appellant to approach the High Court directly.
G The High Court has also examined this matter and clearly observed in its order
in paragraph 9 as follows:

"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 ·l
H of the said dispute within the meaning of Section I6(2) or Section
NATIONAL THERMAL POWER CORPN. LTD 1·. SIEMENS ATKEiNGESELLSCHAFT IBALASUBRAMANYAN. J.I 411

16(3) of the Act or it was the plea in regard to the merits of the A
~ i 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."

9. Therefore, the question of jurisdiction in the present controversy did B
not arise because the counter-claim was opposed by the respondent-SAG as
the same has since been stood settled. In view of the finding of fact recorded
by the Tribunal that all the counter-claims stood covered by the decisions of
-:4. the minutes of meeting though it was initially opposed by the respondent-
SAG that it was not arbitrable or the Tribunal could not go into counter-claim, C
despite that it examined on the merit of the matter and on the merits the
Tribunal disposed of the counter-claim by giving partial award. We fail to
understand how can the appellant-NTPC can raise the question of jurisdiction
and bring its case under Section 16(2) & (3).

10. Learned counsel for the appellant tried to refer to some of the D
decisions of this Court but we do not think those decisions need to be noted
in the present case as the whole question turned on the facts involved in the
present case and we are satisfied that the partial award can be given and
against this partial award the appellant has remedy under section 34 of the
Act and thereafter they could file appeal under Section 37 of the Act. But no E
direct appeal would lie before the High Court because no jurisdictional issue
was involved. The counter-claim was disposed of on the basic fact that the
counter-claims had been settled by the MoM dated 6th/7th April, 2000. In this
view of the matter, we need not refer to the decisions cited by learned counsel
and other written submissions made by the appellant. We are satisfied that F
the view taken by the High Court is correct, appeal was not maintainable
under Section 37(2) of the Act before the High Court and there is no ground
to interfere with the order passed by the High Court. Accordingly, the appeal
is dismissed with no order as to costs.

P.K. BALASUBRAMANY AN, J. I. I respectfully agree with the reasoning G
and conclusion of my learned brother. I am inclined to add a few words in
view of the significance of the question and the frequency with which it may
arise.

2. Before the Arbitral Tribunal, Seimens, the contractor, made a claim for
compensation for the delay on the part of the N.T.P.C. for whom a works H
412 SUPREME COURT REPORTS [2007] 3 S. C.R.

A contract was executed by Seimens. N.T.P.C. not only resisted the claim but
also made a counter claim. The counter claim was sought to be resisted by
Seimens by contending that all outstanding claims between the parties other
than the one it had put forward in the claim before the Arbitral Tribunal had
been settled between the parties as evidenced by a Memorandum of
B Understanding arrived at between them described in the proceedings as
Minutes of the Meeting (M.O.M.). Seimens, therefore, contended that the
claims made by N.T.P.C. before the Arbitral Tribunal by way of counter claim
was not maintainable or did not survive the M.O.M. They had also raised a
contention that N.T.P.C. not having acted in terms of the arbitration clause
by first raising the claim before the Engineer, it could not straightaway raise
C the claim before the Arbitral Tribunal. That part of the objection was given
up at the stage of arguments. Therefore, what survived for decision before
the Arbitral Tribunal was the effect of the M.O.M. on the claims ofN.T.P.C.
in the counter claim filed by it. The Arbitral Tribunal thought it appropriate
to dispose of certain preliminary questions including the question whether
D N.T.P.C. could pursue its counter claim in the light of the M.0.M. The Tribunal
held that other than claims 1 and 7 in the counter-claim, the other claims had
already been settled as evidenced by the M.O.M. and the said claims did not
survive for adjudication by the Arbitral Tribunal. It held that claim No. 7 was
not really a claim since what N.T.P.C. had done was to reserve its right to make '<(
a claim on that score. As regards claim No. I, the Tribunal held that it was
E barred by limitation. Thus, in what was called a partial award, the claim of
Seimens was found to be in time and the counter claim made by N.T.P.C. was
found to be unsustainable.

3. N.T.P.C. sought to file an appeal against the partial award of the
F Arbitral Tribunal by resort to Section 37(2)(a) of the Arbitration and Conciliation
Act, 1996 (for short, 'the Act'). It was the contention of N.T.P.C. that when
the arbitrators refused to go into the merits of its counter claim, they were
really declining jurisdiction in tenns of sub-section (2) of Section 16 of the
Act and in such a situation, an appeal was clearly maintainable under Section
37(2)(a) of the Act. This was sought to be met by Seimens by pointing out
G that it was not a case of declining of jurisdiction by the Arbitral Tribunal to
entertain the counter claim made by N.T.P.C., but it was really a case of the
counter claim being found unsustainable for the reasons stated in the award.
The partial award thus made by the Arbitral Tribunal was an award on the
counter claim ofN.T.P.C. and it was not a case which fell within either sub-
H section (2) or sub-section (3) of Section 16 of the Act attracting Section
NATIONAL THERMAL POWER CORPN LTD r SIEMENS ATKEINGESELLSCHAFT IBALASUBRAMANYAN_ J_j 413
·- 37(2)(a) of the Act. A
,. ~
'
" 4. What is sought to be argued on behalf of N.T.P.C., the appellant, is
that the Arbitral Tribunal had intended to deal with the question of jurisdiction
and limitation in the first instance and it was during the course of deciding
those questions that the counter claim had been rejected and this amounted
to a declining of jurisdiction by the Arbitral Tribunal in dealing with the B
counter claim ofN.T.P.C. The partial award was therefore a decision on a plea
under Section 16(2) of the Act and consequently appealable under Section
37(2)(a) of the Act.
-i
5. In the larger sense, any refusal to go into the merits of a claim may
be in the realm of jurisdiction. Even the dismissal of the claim as barred by
c
limitation may in a sense touch on the jurisdiction of the court or Tribunal.
When a claim is dismissed on the ground of it being barred by limitation, it
will be, in a sense, a case of the court or Tribunal refusing to exercise
jurisdiction to go into the merits of the claim. In Pandurang Dhoni Chougu/e
v. Maruti Hari Jadhav, [I966) I S.C.R. 102, this Court observed that: D

"It is well-settled that a plea of limitation or a plea of res judicata is
a plea of law which concerns the jurisdiction of the cou1t which tries
r
the proceedings. A finding on these pleas in favour of the party
raising them would oust the jurisdiction of the court, and so, an
E
erroneous decision on these pleas can be said to be concerned with
questions of jurisdiction which fall within the purview ofS. I 15 of the
Code."

In a particular sense, therefore, any declining to go into the merits of a claim
could be said to be a case of refusal to exercise jurisdiction. F
6. The expression 'jurisdiction' is a word of many hues. Its colour is to
~-~
be discerned from the setting in which it is used. When we look at Section
16 of the Act, w_e find that the said provision is one, which deals with the
competence of th~ Arbitral Tribunal to rule on its own jurisdiction. SBP & Co.
v. Patel Engineering ltd & Anr., [2005) 8 S.C.C. 618 in a sense confined the G
operation of Section 16 to cases where the Arbitral Tribunal was constituted
at the instance of the parties to the contract, without reference to the Chief
!- Justice under Section I 1(6) of the Act. In a case where the parties had thus
constituted the Arbitral Tribunal without recourse to Section 11 (6) of the Act,
they still have the right to question the jurisdiction of the Arbitral Tribunal H
414 SUPREME COURT REPORTS (2007) 3 S.C.R.

A including the right to invite a ruling on any objection with respect to the -.
existence or validity of the arbitration agreement. It could therefore rule that
there existed no arbitration agreement, that the arbitration agreement was not
• .
'
valid, or that the arbitration agreement did not confer jurisdiction on the
Tribunal to adjudicate upon the particular claim that is put forward before it.
Under sub-section (5), it has the obligation tc. decide the plea and where it
B rejects the plea, it could continue with the arbitral proceedings and make the
award. Under sub-section(6), a party aggrieved by such an arbitral award may
make an application for setting aside such arbitral award in accordance with
Section 34. In other words, in the challenge to the award, the party aggrieved
could raise the contention that the Tribunal had no jurisdiction to pass it or >-
c that it had exceeded its authority, in passing it. This happens when the
Tribunal proceeds to pass an award. It is in the context of the various sub-
sections of Section 16 that one has to understand the content of the expression
'jurisdiction' and the scope of the appeal provision. In a case where the
Arbitral Tribunal proceeds to pass an award after overruling the objection
D relating to jurisdiction, it is clear from sub-section (6) of Section 16 that the
parties have to resort to Section 34 of the Act to get rid of that award, if
possible. But, ifthe Tribunal declines jurisdiction or declines to pass an award
~nd dismisses the arbitral proceedings, the party aggrieved is not without a
remedy. Section 37 (2) deals with such a situation. Where the plea of absence '{
of jurisdiction or a claim being in excess of jurisdiction is accepted by the
E Arbitral Tribunal and it refuses to go into the merits of the claim by declining
jurisdiction, a direct appeal is provided. In the context of Section 16 and the
specific wording of Section 37(2)(a) of the Act, it would be appropriate to hold
that what is made directly appealable by Section 37(2)(a) of the Act is only
an acceptance of a plea of absence of jurisdiction, or of excessive exercise
F of jurisdiction and the refusal to proceed further either wholly or partly.
7. In a case where a counter claim is referred to and dealt with and a
plea that the counter claim does not.survive in view of the settlement of
disputes between the parties earlier arrived at is accepted, it could not be held
)-.. -
to be a case of refusal to exercise jurisdiction by the Arbitral Tribunal. Same
G is the position when an Arbitral Tribunal finds that a claim was dead and was
not available to be made at the relevant time or that the claim was not
maintainable for other valid reasons or that the claim was barred by limitation.
They are all adjudications by the Tribunal on the merits of the claim and in
such a case the aggrieved party can have recourse only to Section 34 of the
H Act and will have to succeed on establishing any of the grounds available
NATIONAL THERMAL POWER CORPN. LTDr. SIEMENS ATKEINGESELLSCHAFT IBALASUBRAMANYAN. J.] 415

under that provision. It would not be open to that party to take up the A
position that by refusing to go into the merits of his claim, the Arbitral
Tribunal had upheld a plea that it does not have jurisdiction to entertain the
claim and hence the award or order made by it, comes within the purview of
Section i6(2) of the Act and consequently is appealable under Section 37(2)(a)
of the Act.
B
8. In the case on hand, what the Tribunal has found is that in view of
the M.O.M. wherein the various claims of either party were thrashed out and
settled, N.T.P.C. could not pursue most of the claims set out in the counter
claim. This is a finding on the merits of the claim ofN.T.P.C. It is not a decision
by the Arbitral Tribunal either under Section 16(2) or Section 16(3) of the Act. C
Consequently, the High Court was right in holding that the appeal filed by
N.T.P.C. under Section 37(2)(a) was not maintainable.

B.K. Appeai dismissed.