The amount due is calculated, normally, through clause 50.2. This clause allows for payment of the Price for Work Done to Date less amounts owed plus sums due to the contractor. The PWDD for Option C is defined at clause 11.2(29) as the total Defined Cost. Next you need the definition of Defined Cost, which, for Option C, can be found at 11.2(23) as, in summary, amounts due less Disallowed Costs. Disallowed cost is then defined at 11.2(25).
So, after a very long string of defined terms the answer is that yes, the payment on termination can and indeed should include Disallowed Costs.