SEPC-Furlong JV Faces ₹521 Cr Contract Termination in Uttar Pradesh

The joint venture has referred the dispute to arbitration after receiving a termination notice for a major highway project.

CHENNAI — SEPC Limited has informed stock exchanges that its unincorporated joint operation, SEPC-Furlong JV, has received a termination notice from Shalimar Corp Limited (SCL) regarding an Engineering, Procurement, and Construction (EPC) subcontract. The notice, dated July 2, 2026, concerns the cancellation of both the subcontract and the Letter of Acceptance (LOA) for a significant infrastructure project in Uttar Pradesh.

The project, valued at ₹521.46 crore, involved the widening and upgradation of the Shahjahanpur–Bisalpur section into a four-lane configuration. The sudden cancellation of the lump-sum turnkey contract marks a material development for the company’s ongoing infrastructure operations.

Arbitration Proceedings Initiated

In response to the notice, which was received by the company via email on July 11, 2026, SEPC Limited has formally referred the dispute to arbitration. While the company is awaiting the original copy of the termination notice, it has confirmed that the matter is now subject to legal proceedings to resolve the conflict with Shalimar Corp Limited.

This development follows the initial awarding of the contract to the SEPC-Furlong JV just two months prior, on May 14, 2026. The abrupt termination has introduced uncertainty regarding the project’s execution and potential financial implications for the joint venture.

Impact on Operations and Order Book

The loss of the ₹521.46 crore project represents a notable setback for the SEPC-Furlong JV’s order book. For investors and market analysts, the event raises questions regarding the impact on revenue projections for the current fiscal year. While SEPC Limited has not yet quantified the financial impact of the termination, it has committed to complying with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to keep shareholders informed of any further material developments.

This cancellation follows a series of recent shifts in the company's project portfolio. In May 2026, SEPC also disclosed the cancellation of a ₹230 crore work order by MOIL Limited, highlighting a period of heightened project volatility for the infrastructure firm.

Official Sources

According to the official exchange filings submitted by SEPC Limited, the termination notice, referenced as SCL/SZP/SEPC-Furlong/2026-26/01, was issued by Shalimar Corp Limited on July 2, 2026. T. Sriraman, Company Secretary and Compliance Officer, confirmed the company's move to initiate arbitration in a disclosure submitted to the National Stock Exchange and BSE Limited.

Why It Matters

For stakeholders, this arbitration process is critical as it will determine the extent of potential losses, including any costs incurred by the joint venture before the notice was issued. The resolution of this dispute will influence the company's financial recovery and its ability to secure replacement contracts in the competitive infrastructure sector.

Key Facts at a Glance

• Contract Value: ₹521.46 crore.

• Project Details: Widening and upgradation of the Shahjahanpur–Bisalpur four-lane highway section in Uttar Pradesh.

• Parties Involved: SEPC-Furlong JV (Contractor) and Shalimar Corp Limited (Authority).

• Status: Termination notice received on July 11, 2026; matter referred to arbitration.

FAQ

What is the reason for the contract termination?

The company filing does not specify the underlying reason for Shalimar Corp Limited’s decision to terminate the contract.

How will this affect SEPC Limited’s finances?

The company has not yet quantified the financial impact, but the loss of a ₹521.46 crore contract is considered a material event that may affect future revenue.

What are the next steps for SEPC-Furlong JV?

The joint venture has referred the matter to arbitration to seek a resolution and will provide further updates as the legal proceedings unfold.

Source: BSE Limited (SEPC Filing), National Stock Exchange, Tijori Alerts, ScanX Trade News