Template:Isda 6(e)(iii) summ: Difference between revisions
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Section {{{{{1}}}|6(e)(iii)}} is somewhat gnomic, but is designed to build in some flex to allow for the weird things that happen in the netherworld of corporate insolvency, especially where your {{{{{1}}}|Early Termination Date}} happened, thanks to its [[automatic early termination|automatic]] trigger, ''without anyone knowing about it''. | Section {{{{{1}}}|6(e)(iii)}} is somewhat gnomic, but is designed to build in some flex to allow for the weird things that happen in the netherworld of corporate insolvency, especially where your {{{{{1}}}|Early Termination Date}} happened, thanks to its [[automatic early termination|automatic]] trigger, ''without anyone knowing about it''. | ||
If an [[AET]] has been | If an [[AET]] has been “dark triggered” (this is an expression I made up to cover an event that has happened to the contract by operation of circumstance without the knowledge of either party), and therefore the parties (especially the {{{{{1}}}|Non-Defaulting Party}}) have blithely carried on with their business of making payments and deliveries unaware that the technical insolvency of one of them meant all payment and delivery obligations were suspended — Section {{{{{1}}}|2(a)(iii)}} and all that — then you will find you have the opposite of {{{{{1}}}|Unpaid Amounts}}: you will have ''overpaid'' Amounts. This provision half-heartedly allows you to adjust to take account of them, without saying how: can you credit their full amount back? Do you have to apply some recovery rate? | ||
We suspect most counterparties will credit the full amount and wait, with arguments pre-marshalled about [[Insolvency set-off|insolvency set-off]] and restitution for [[money had and received]], for use should the [[insolvency administrator]] comes at them. |