By S&S Co. Advocates & Solicitors · Published 30 September 2026 · Informational content, not legal advice: see our disclaimer
Strict Construction Is the Default
EPC contracts, power purchase agreements and concession agreements in the infrastructure and power sectors invariably include detailed force majeure provisions, but Indian courts and tribunals, including the Appellate Tribunal for Electricity, construe these clauses strictly against the party seeking to invoke them. A foreseeable event, or one the invoking party could reasonably have planned around, generally does not qualify, however disruptive it turns out to be in practice.
Force Majeure Versus the Statutory Doctrine of Frustration
A contractual force majeure clause is a distinct mechanism from the general doctrine of frustration under Section 56 of the Indian Contract Act, 1872, which applies even where a contract has no force majeure clause at all, but only where the contracted performance becomes genuinely impossible or unlawful. In practice, large infrastructure and power contracts are drafted with their own force majeure clause precisely so the parties are not left to rely on the much narrower statutory doctrine, which Indian courts have consistently applied as a route of last resort rather than a general escape from a difficult bargain.
What Tribunals Have Accepted, and Rejected
In power and EPC disputes, tribunals have generally required a party invoking force majeure to show that the specific event was genuinely unforeseeable and beyond its control, and that it actually prevented performance rather than merely making performance more expensive, slower or less convenient. Ordinary regulatory changes or routine tax adjustments typically do not, on their own, qualify as force majeure unless the clause specifically lists them, because such contracts usually address regulatory and tax risk through a separate, specifically defined "change in law" mechanism rather than folding it into force majeure.
The Separate 'Change in Law' Mechanism
Most PPAs and EPC contracts treat "change in law" as its own relief category, distinct from force majeure, with its own definition, notice process and compensation mechanism. This distinction matters in practice: a party facing an adverse regulatory or tax development should first check whether its contract's change-in-law clause, rather than its force majeure clause, is the applicable route for relief, since conflating the two can lead to pursuing the wrong contractual remedy entirely.
Notice and Mitigation Are Not Optional
Nearly all infrastructure and power force majeure clauses require the party affected to give prompt written notice of the claimed event, together with evidence of steps taken to mitigate its impact. Tribunals treat compliance with these requirements as integral to the claim itself, not a mere formality, so a party that delays notice or cannot show genuine mitigation efforts risks losing an otherwise sound force majeure claim on that basis alone.
Drafting for the Specific Risk Profile
Given how narrowly these clauses are read, the most effective protection for a generator, concessionaire or EPC contractor is a force majeure clause that expressly addresses the specific risk categories relevant to the project, defines a clear cap on relief (whether time extension, cost compensation, or both), and sets a realistic but firm notice and mitigation timeline, rather than relying on generic boilerplate carried over from an unrelated transaction.
Frequently Asked Questions
Is an ordinary regulatory or tax change treated as force majeure in a power contract?
Generally not, unless the contract's force majeure definition specifically lists it. Power purchase and EPC agreements typically treat regulatory and tax changes under a separate, specifically defined 'change in law' mechanism rather than as a subset of force majeure.
What must a party show to successfully invoke force majeure in an infrastructure contract?
The party must show the event falls within the clause's actual wording, that it was genuinely unforeseeable and beyond its control, and that it actually prevented performance rather than merely making it more expensive or less convenient.
Are there notice requirements for invoking force majeure?
Most infrastructure and power contracts require prompt written notice of the force majeure event along with evidence of mitigation efforts, and failing to give timely notice can itself defeat an otherwise valid claim.
What relief does a force majeure clause typically provide?
Relief is usually either an extension of time for performance or, in some clauses, cost compensation, with the specific relief and any cap on it defined by the clause itself rather than implied by law.
References & Further Reading
This article references the following statutory provisions. Readers should always verify current rules, fees and timelines against the applicable statute and rules as amended, since these are revised from time to time.
- The Indian Contract Act, 1872, Section 56 (Agreement to do impossible act), as applicable in the absence of or alongside a contractual force majeure clause.
- The Electricity Act, 2003, as relevant to tribunal rulings distinguishing force majeure from a PPA's separate change-in-law mechanism in power sector disputes.