This additional type of substitution could provide additional comfort to lenders. A similar structure could perhaps be integrated with other P3 projects, such as ports, airports, etc. A replacement contract occurs when two or more parties participate in a joint venture and find that the current agreement is no longer relevant or effective. In this case, the parties replace the original contract with a new contract. This requires the agreement of all parties involved. If the original contract has been written, the replacement contract must also be written. A replacement contract can also be considered an amendment to an agreement if the contract as a whole remains unchanged, but if changes are added to meet certain requirements. (v) in addition, the dealer`s promoters/shareholders must agree in advance that they compensate incoming shareholders for all of the dealer`s liabilities up to the date of the change in the dealer`s control, in accordance with the „substitution“ above, as well as with respect to the shareholding title; and the substitution agreements under various NHAI concession agreements provide the following general framework for the application of the substitution right, but Novation is essentially an agreement in which a third party replaces one of the original parties and frees the weakened party from any commitment it might have had under the agreement. The main driver of innovation is that the original treaty remains unchanged and remains in force. Novation is important when conducting transactions of any kind in South Africa, if existing contractors wish to transfer their contractual obligations to a third party. This is sometimes referred to as a „transfer contract.“ However, the substitution agreements do not specify how such a substitution is applied to other agreements concluded by the concessionaire, such as the state aid agreement and the NHAI fiduciary agreement. While the innovation agreement on the NHAI fiduciary agreement (at NHAI, the fiduciary intermediary (designated by the lenders) and the dealer are generally the parties) could be implemented at the same time as the implementation of the ca innovation agreement, the substitution agreements and certification bodies do not specify that NHAI will guarantee that the state aid agreement will also be renewed by the relevant state government at the same time as CA`s innovation.
In order to facilitate the dealer`s debt-taking for the development of the project and to ensure near-security, the project lenders are granted the possibility of „substitution“ by the concessionaire authority, usually by a tripartite agreement between the concessionaire, the dealer and the lenders or their representative, known as the substitute agreement. This alternative right allows lenders to replace the dealer in the event of a dealer default of the concession agreement or financing agreements by another agency designated by the lenders and subject to approval by the concession authority. The actual process of such substitution under the CAs, which are conducted with the National Highways Authority of India („NHAI“), is the subject of this article. Replacement contracts are not equivalent contracts, as innovation assumes that a third party who was not part of the original contract is involved. In innovation scenarios, the contract is issued without delay if the third party is accepted by the subject.