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12. On 14.10.2019, SPML intimated its willingness to resolve the disputes in an amicable manner through a meeting however, informed NTPC that the Arbitration Clause will be invoked in case the disputes are not resolved amicably and the Bank Guarantees are not released within thirty days.

13. A meeting was held between the parties on 08.11.2019 wherein NTPC proposed to consult with its higher management for expeditious release of the Bank Guarantees only if SPML withdraws the arbitration notice. In the meeting, SPML informed NTPC that they would revert back on the said proposal by 15.11.2019, to accordingly finalize on the future course of action.

14. On 13.11.2019, SPML issued a letter to NTPC indicating its willingness to withdraw its arbitration notice subject to NTPC releasing the Bank Guarantees before 30.11.2019. NTCP responded to the said letter on 18.11.2019 and demanded a complete and unconditional acceptance from SPML to proceed further. On 25.11.2019 SPML informed NTPC about the losses it had suffered on account of non-

Reasons and Conclusion

25. The principal controversy that requires to be addressed by this Court relates to the scope of examination under Section 11 of the A&C Act at a pre-referral stage. According to NTPC, the Settlement Agreement entered into by the parties novated the Contract Agreement. With the said novation, the Arbitration Clause contained in the Contract Agreement perished and since the Settlement Agreement does not include an Arbitration Clause, the parties cannot be referred to arbitration. According to NTPC, the Arbitration Agreement as embodied in the Arbitration Clause under the Contract Agreement has ceased to exist. The said contention is disputed by SPML. According to SPML, the Settlement Agreement is invalid as it has been induced by economic coercion and undue influence. It is contended on behalf of SPML that there is no dispute that the parties had entered into a Contract Agreement and therefore, an Agreement to refer the disputes arising in relation thereto exists between the parties. The dispute whether the Contract Agreement stands discharged by the Settlement Agreement is required to be adjudicated by the Arbitral Tribunal constituted in terms of the Arbitration Clause as contained in the Contract Agreement.

59. The communication dated 08.11.2019 refers to the Minutes of the Meeting held on that date between the representatives of SPML and NTPC. The Minutes of the Meeting indicates that NTPC had withheld the Bank Guarantees pending recoveries in respect of works executed by SPML on NTPC Bongaigon. NTPC had proposed that, if SPML withdraws the notice for arbitration, NTPC Simhadri will propose to the higher management to expedite release of the bank guarantees. SPML on the other hand had requested NTPC to make an additional payment of ₹1,37,24,411/- on account of (a) revocation of the liquidated damages of ₹86,19,871/-; (b) payment of additional works amounting to ₹35,92,200/-; and (c) payment for alleging wrongful deduction amounting to ₹15,12,340/-. It was NTPC's stand that the contract closure process had been concluded and the only pending issue was release of the Bank Guarantees, and therefore, no further payments could be made. This was not agreeable to SPML.