Template:Nutshell 2016 CSA 4

4 Dispute Resolution
4(a) Disputed Calculations or Valuations. If a Disputing Party disputes any collateral call (the Value of either the Exposure or the Credit Support being transferred):

• it must give notice by close of business on the date the transfer is due (if a Delivery Amount (VM) or Return Amount (VM)) or, the Local Business Day following the date of transfer (if a transfer of Eligible Credit Support (VM) or Equivalent Credit Support (VM));
• it must transfer any undisputed amount by close of business on the date the transfer is due;
• the parties will try resolve the dispute. If by the Resolution Time they haven’t:
  • Disputes as to Exposure: the Valuation Agent will recalculate the disputed portion of the Exposure as of the Recalculation Date by:
    • averaging mid-market quotations for the Market Quotation from four Reference Market-makers (if a 1992 ISDA-style close out mechanism); or from four third parties for the Close-out Amount (for a 2002 ISDA-style close out mechanism), in either case from those parties who will provide one (and if none will, the Valuation Agent’s original calculations will stand); and
    • calculating the outstanding Credit Support Balance as per Paragraph 11(f)(ii);
  • Disputes as to Credit Support Value: recalculating the Value as of the date of transfer.
    

The Valuation Agent will notify each party by the Notification Time on the Local Business Day following the Resolution Time. Then the appropriate transfer has to be made.
4(b) No Event of Default. A Party’s failure to meet a collateral call which it is disputing under Paragraph 4(a) will not be an Event of Default while the dispute resolution procedures are in train. Once completed, of course, a failure to transfer by the due date will again be a Failure to Pay or Deliver.