By S&S Co. Advocates & Solicitors · Published 16 October 2026 · Informational content, not legal advice: see our disclaimer
A concessionaire whose highway, power or infrastructure contract has just been terminated by a state authority faces an unusually sharp strategic choice. The concession agreement almost certainly contains an arbitration clause, and the conventional wisdom is that a commercial dispute between contracting parties belongs in arbitration, not before a writ court. But the counterparty here is not an ordinary private party. It is the state or a state instrumentality, and Article 14 of the Constitution requires it to act fairly even in its contractual dealings, which is the opening a concessionaire's lawyers look for when trying to get into a High Court quickly rather than waiting out a multi-year arbitration.
This is not a settled area, and anyone telling a client otherwise is overselling the certainty. The law genuinely pulls in two directions, and a decision in this exact space in 2026 shows just how unresolved it remains, right up to the point where the Supreme Court itself intervened to pause a High Court ruling that had gone the concessionaire's way.
The foundational principle: an arbitration clause does not automatically bar a writ
ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., decided by the Supreme Court on 18 December 2003, is still the starting point. The Court held that a state instrumentality is bound by Article 14 to act fairly even in its contractual dealings, and that a writ petition under Article 226 can still be entertained in a contractual dispute as long as the relevant facts can be established from the record and the state's conduct genuinely calls for judicial correction on fairness grounds. The case did not hold that every contractual dispute involving the state is writ-maintainable. It held that the mere existence of a contract, or of an arbitration clause within it, does not by itself oust the writ court's jurisdiction.
Union of India v. Tantia Construction reinforced the same basic point in the public works context, confirming that an arbitration clause is not an absolute bar to invoking writ jurisdiction under Articles 226 or 32. What both decisions share is a refusal to treat the arbitration clause as a jurisdictional wall. What neither decision does is promise a concessionaire an easy path into a High Court merely because the other side happens to be a government authority.
The counterweight: Joshi Technologies and the public-law character test
Joshi Technologies International Inc. v. Union of India supplies the restraining principle courts reach for just as often. It holds that where a dispute is essentially contractual and the relief sought depends on construing the terms of the contract, a writ court will generally decline jurisdiction, particularly where the facts are seriously disputed and would need oral evidence to resolve, or where the parties have themselves chosen arbitration as their dispute resolution mechanism. The decision carves out an exception for state action that carries a genuine public law character, meaning conduct that goes beyond an ordinary commercial disagreement and raises a question about how a public authority is exercising its public functions.
In practice, this means a concessionaire arguing for writ jurisdiction has to frame the dispute as being about the fairness and legality of the state authority's conduct as a public body, rather than as a dispute over whose interpretation of a termination clause or a cure-period notice is correct. The moment a court concludes the real question is simply which party is right under the contract, the case tends to get sent to arbitration, whatever Article 14 language the petition uses to dress it up.
MP Power Management v. Sky Power: the Supreme Court lets a writ against a PPA termination stand
M.P. Power Management Company Ltd. v. Sky Power Southeast Solar India Pvt. Ltd., 2022 INSC 1208, decided on 16 November 2022 by Justices K.M. Joseph and Hrishikesh Roy, is a useful data point on the concessionaire-friendly side of the ledger. The Madhya Pradesh High Court had allowed a writ petition and quashed the state power utility's termination of a power purchase agreement with a solar developer, and the Supreme Court, hearing the utility's challenge, upheld that outcome, dismissing the appeal.
What this shows is that a state utility's termination of a long-term power purchase agreement is not automatically insulated from writ review just because the PPA itself likely contained its own dispute resolution machinery. Courts have been willing to look past the contractual label when the underlying complaint is that a state entity acted unfairly or arbitrarily in exercising a power to terminate a long-term infrastructure contract, treating that conduct as something closer to the exercise of a public function than an ordinary commercial breach.
Tata Projects v. Union of India: a 2026 win for the concessionaire, immediately stayed
The most recent and most instructive episode is Tata Projects Ltd. v. Union of India & Ors., Writ-C No. 4559 of 2025, decided by the Allahabad High Court on 8 July 2026. NHAI had terminated a roughly nine hundred and forty crore rupee highway EPC contract, and the High Court found that NHAI's termination notice was effectively pre-determined, pointing to the fact that NHAI's December 2024 notice proposing termination and its subsequent termination notice were worded almost identically, which the Court treated as evidence that NHAI had not genuinely applied its mind to the contractor's explanations in between. The High Court held that NHAI, being 'State' under Article 12, could not arbitrarily terminate the contract and shift the consequences of its own failure to hand over encumbrance-free land onto the contractor, and it set aside the termination, the forfeiture of bank guarantees, and the fresh tender NHAI had already issued for the same project, relying on the principle that an arbitration clause does not foreclose writ relief against genuinely arbitrary state conduct.
The Supreme Court then stayed that judgment in National Highways Authority of India v. Tata Projects Ltd., SLP (C) No. 29512 of 2026, decided on 31 August 2026, observing that given the public interest in the underlying highway project, the parties should attempt to resolve the dispute, and noting NHAI's argument that the High Court had not adequately dealt with a separate, independent ground for termination concerning the contractor's maintenance obligations. The stay does not finally decide the writ-maintainability question either way, but it is a sharp reminder that a favourable High Court ruling on this exact point can be short-lived, and that the Supreme Court is willing to intervene quickly where a quashed termination affects an active public infrastructure project.
What this means for how a concessionaire should actually proceed
Do not treat a writ petition as a confident substitute for arbitration. Treat it, if the facts genuinely support it, as a parallel or preliminary step aimed at a specific, narrow form of relief, typically an urgent stay of a termination's immediate consequences such as bank guarantee encashment or re-tendering, while being realistic that the underlying contractual dispute about entitlement to damages or termination payment will very likely still need to go to arbitration eventually. Build the writ petition around genuine public law hallmarks, patterns suggesting pre-determination, a demonstrable failure to apply the mind to the contractor's response, or conduct that looks procedurally unfair on the face of the record, rather than around a dispute over contract interpretation that a court is likely to say belongs before an arbitrator.
Expect the other side, especially a well-resourced central authority like NHAI, to escalate quickly if a High Court rules against it, and plan the litigation timeline and cash flow around that possibility rather than assuming a favourable High Court judgment is the end of the matter. The Tata Projects sequence, a High Court win followed within weeks by a Supreme Court stay, is exactly the pattern a concessionaire's commercial and legal teams should be bracing for before they commit to the writ route rather than heading straight to arbitration.
Frequently Asked Questions
Does having an arbitration clause in my concession agreement stop me from filing a writ petition against termination?
Not automatically. ABL International and Union of India v. Tantia Construction both hold that an arbitration clause does not by itself bar writ jurisdiction. But Joshi Technologies pulls the other way where the real dispute is just about contract interpretation, so the outcome depends heavily on how the dispute is framed and what the facts actually show.
What kind of facts make a writ petition against a state authority's termination more likely to succeed?
Evidence suggesting the authority's decision was pre-determined or taken without genuinely considering the contractor's response, as in the Tata Projects case, where near-identical notices before and after the contractor's explanation suggested no real application of mind. Framing the issue as a failure of fair process, rather than a disagreement over contract terms, matters a great deal.
If a High Court quashes a termination by writ, is that the end of the dispute?
Not necessarily, and a recent example shows why. The Allahabad High Court quashed NHAI's termination of a highway contract with Tata Projects in July 2026, and the Supreme Court stayed that judgment within weeks, in August 2026, while the parties work through the underlying issues. A favourable High Court ruling can be short-lived, particularly where a major public infrastructure project is involved.
Can a writ petition be filed against a state power utility's termination of a power purchase agreement?
It has succeeded before. In M.P. Power Management Company v. Sky Power Southeast Solar, the Supreme Court upheld a High Court decision that had quashed a state utility's termination of a solar PPA through writ proceedings, suggesting courts are willing to review a state utility's termination decision where it is challenged as unfair or arbitrary.
Should I file a writ petition instead of invoking arbitration, or alongside it?
Most practitioners treat the writ route as a way to get urgent, narrow relief, such as stopping bank guarantee encashment or a fresh tender, rather than as a full substitute for arbitration. The underlying contractual dispute over damages or termination payment will very likely still need to be arbitrated, so the two routes are usually better thought of as complementary rather than exclusive.
References & Further Reading
The provisions and rulings below were relied on for this guide. The position can change with amendments and later decisions, so check the current text and the latest case law before acting on any of it.
- Constitution of India, Articles 12, 14 and 226
- ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., Civil Appeal No. 5409 of 1998, decided 18 December 2003
- Union of India v. Tantia Construction Pvt. Ltd.
- Joshi Technologies International Inc. v. Union of India
- M.P. Power Management Company Ltd. v. Sky Power Southeast Solar India Pvt. Ltd., 2022 INSC 1208, decided 16 November 2022
- Tata Projects Ltd. v. Union of India & Ors., Writ-C No. 4559 of 2025 (Allahabad High Court, decided 8 July 2026); National Highways Authority of India v. Tata Projects Ltd., SLP (C) No. 29512 of 2026 (Supreme Court, stay granted 31 August 2026)