It's absolutely clear on the slo-mo. Terry jumps first, and he jumps straight up. His arms go up because it's physically impossible to jump high without using the arms to add 'spring'. The lowering of the arms at or around the top of the jump is also something physically impossible to avoid. The keeper jumps second and jumps towards Terry who is by now descending, resulting in his shoulder locking under Terry's armpit. If anyone was fouled it was Terry. The only people who can't see it are jealous Scotsmen and Irishmen, and referees who are under instruction from UEFA to make sure that the Host Nation goes through.

Physical contact in Soccer is not, despite what many believe, an automatic foul.