Template:M comp disc EFET Allowance Annex 7: Difference between revisions
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=== Definition of Force Majeure === | === Definition of Force Majeure === | ||
{{M comp disc EFET Allowance Annex 7.1}} | {{M comp disc EFET Allowance Annex 7.1}} | ||
Definition of Suspension Event | === Definition of Suspension Event === | ||
{{M comp disc EFET Allowance Annex 7.5}} | {{M comp disc EFET Allowance Annex 7.5}} | ||
Revision as of 14:55, 28 July 2023
You will recognise “Suspension Event” from the IETA Master Agreement and the ISDA EU Emissions Annex and Force Majeure from the IETA Master Agreement, and indirectly un the ISDA EU Emissions Annex, where it goes by the name of “Settlement Disruption Event”.
Definition of Force Majeure
The same broad concept is dealt with as follows:
- ISDA: Settlement Disruption Event
- EFET: Force Majeure
- IETA: Force Majeure
Functionally, the definitions of “Force Majeure” under Clause 7.1 the EFET Annex and Clause 13 of the IETA, and the definition of “Settlement Disruption Event” under (d)(i)(4) of the ISDA Emissions Annex are the same — here is a comparison between IETA and EFET, and here is a comparison between EFET and ISDA — so you do wonder whose idea it was to call it something different.
Let us speculate: the IETA was written first, is independent of the ISDA universe, and for reasons best known to IETA’s crack drafting squad™, they decided to call this a “Force Majeure”. Being an event beyond the reasonable control of the affected party there is some logic to this.
ISDA’s crack drafting squad™ was, as usual, late to the “novel asset class” party and, as it couldn’t find a spot, decided to park its tanks on IETA’s lawn, borrowing much of the technology wholesale but unable to call this event a Force Majeure because the ISDA Master Agreement already has a Force Majeure Event, this is quite different — for whatever reason, the timings are a lot longer — and that would confuse people even beyond ISDA’s tolerance for confusing people.[1]
So ISDA’s crack drafting squad™ went with its product specific “stuff happens” label, “Settlement Disruption Event”. In any case, to make your lives easier, “Force Majeure - Emissions Annex Provision” redirects to Settlement Disruption Event. The JC’s nice like that.
The differences are to account for the architecture and nomenclature of the different master agreements, though the IETA has a conflict clause favouring Suspension Event over Force Majeure/Settlement Disruption Event, which the EFET does not.
Definition of Suspension Event
The definition of Suspension Event is more or less the same in all three emissions trading documentation regimes. Compare:
ISDA: Suspension Event
IETA: Suspension Event
EFET: Suspension Event
As an extra treat, here are some deltaviews:
IETA vs EFET: comparison
ISDA vs IETA: comparison
- ↑ Seeing as the IETA Master Agreement borrows technology from the 1992 ISDA is is conceivable that IETA’s crack drafting squad™ didn’t realise there was a Force Majeure Event in the 2002 ISDA, as there was not one in the 1992 ISDA. I am guessing.