By S&S Co. Advocates & Solicitors · Published 14 January 2026 · Informational content, not legal advice
About this article: A general explainer prepared by S&S Co. Advocates & Solicitors on a recurring type of dispute. It does not report a specific judgment or order, names no parties and gives no case citation, so it should not be cited as authority. Law and practice change; please verify against the current statute and primary sources before relying on it.
Highway and other PPP concession agreements usually contain a termination payment schedule that varies with the reason for termination. A common structure provides a higher payment where the authority is in default, a lower one where the concessionaire is in default, and a different formula for termination for force majeure.
A recurring dispute is whether termination for concessionaire default wipes out the concessionaire's entitlement altogether. The general position is that the answer lies in the agreement. Where the contract itself provides for a reduced, but still payable, amount on a concessionaire-event termination, an authority that treats the default as extinguishing the entitlement is departing from its own contract, and the agreed formula is applied, usually after adjusting the authority's proven counterclaims and dues.
Where the agreement says nothing or is ambiguous, the result turns on its wording and on principles of contract law, including compensation and the bar on unjust enrichment. These disputes are usually decided in arbitration under the agreement, with courts involved at the interim stage under Section 9 and on challenge under Section 34 of the Arbitration and Conciliation Act, 1996.