Agri Business

Farmers’ agitation an indirect political force majeure event, says NHAI

P Manoj Mumbai | Updated on July 02, 2021

File pic of protesting farmers

Allows highway toll operators to seek relief as per model concession agreement or project specific concession agreements

The impact of the on-going farmers’ agitation in certain parts of the country has been “considered as indirect political force majeure event” by the National Highways Authority of India (NHAI), allowing build-operate and transfer (BOT) toll operators of highways to claim relief as stipulated in the model concession agreement (MCA) for projects followed from 2009.

For projects where clauses related to force majeure differ from the model concession agreement, respective clauses of project specific concession agreements shall prevail, the NHAI said in a July 2 policy circular on forceful stoppage of toll collection at toll plazas on national highways due to the farmers stir.

The model concession agreement defines indirect political event as “any civil commotion, boycott or political agitation which prevents collection of fee by the concessionaire for an aggregate period exceeding 7 (seven) days in an accounting year".

A force majeure clause absolves firms from meeting their contractual commitments for reasons beyond their control.

The relief available to concessionaires for indirect political force majeure event include extension of concession period, calculating cost of force majeure such as interest payment on debt, and payment of operation and maintenance expenses.

Published on July 02, 2021

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