By S&S Co. Advocates & Solicitors · Published 3 March 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.
Under the hybrid annuity model (HAM) used for national highway projects, the authority pays part of the project cost during construction and the balance as fixed annuity instalments over the concession period, with the concessionaire not bearing traffic or toll revenue risk. Each annuity instalment has a due date set out in the concession agreement.
Where an authority pays late, disputes usually concern the interest payable and the date from which it runs. Where the agreement fixes a due date for each instalment, an arbitral tribunal can reasonably hold that the obligation to pay, and the liability for interest on delay, arises on that date and does not depend on a separate demand from the concessionaire, unless the agreement says otherwise.
An award that adopts a plausible reading of the contract is difficult to set aside in a challenge under Section 34 of the Arbitration and Conciliation Act, 1996, because courts do not re-examine the merits of the tribunal's interpretation. Because annuity payments are not linked to traffic, a shortfall in traffic or toll revenue does not usually justify withholding them.