Template talk:EFET Allowance Annex 8: Difference between revisions
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{{efetaprov|8}} '''{{efetaprov|Remedies for Failure to Transfer or Accept}}'''. | {{efetaprov|8}} '''{{efetaprov|Remedies for Failure to Transfer or Accept}}'''. § 8 of the {{efetprov|General Agreement}} is deleted and replaced with the following new § {{efetaprov|8}} (''{{efetaprov|Remedies for Failure to Transfer or Accept}}''):<br> | ||
§ {{efetaprov|8.2}} '''{{efetaprov|Failure to Accept}}''': | § {{efetaprov|8.2}} '''{{efetaprov|Failure to Accept}}''': | ||
:(a) '''{{efetaprov|Two Business Days Grace Period}}'''. When | :(a) '''{{efetaprov|Two Business Days Grace Period}}'''. When {{efetaprov|Buyer}} fails to accept {{efetaprov|Transfer}} of a {{efetaprov|Contract Quantity}} in whole or in part on a {{efetaprov|Delivery Date}} as required in accordance with the terms of an {{efetaprov|Allowance Transaction}}, and such failure is not excused by an event of Force Majeure, {{efetaprov|Suspension Event}} or {{efetaprov|Seller}}’s non-performance, {{efetaprov|Seller}} shall afford {{efetaprov|Buyer}} an opportunity to remedy its failure by again attempting to Schedule and {{efetaprov|Transfer}} such {{efetaprov|Contract Quantity}} (or undelivered portion thereof) to {{efetaprov|Buyer}} on the second {{efetaprov|Delivery Business Day}} following the {{efetaprov|Delivery Date}}, provided that such day is not on or after the {{efetaprov|Reconciliation Deadline}} applicable to the undelivered Allowance(s), and further subject to the additional obligation of {{efetaprov|Buyer}} to pay {{efetaprov|Seller}}, as compensation for its failure to accept {{efetaprov|Transfer}} of the {{efetaprov|Allowance}}s, interest calculated: (i) as follows for the two {{efetaprov|Delivery Business Day}} grace period; and (ii) as set forth in the applicable subpart of this § {{efetaprov|8.2}} for any longer period {{efetaprov|Buyer}} fails to accept the {{efetaprov|Allowance}}s thereafter. | ||
:Interest for the two {{efetaprov|Delivery Business Day}} grace period shall accrue at the Interest Rate specified in § {{efetaprov|13.5}} (''{{efetaprov|Default Interest}}'') for the period from (and including) the {{efetaprov|Delivery Date}} to (but excluding) the second {{efetaprov|Delivery Business Day}} following the {{efetaprov|Delivery Date}} on the {{efetaprov|Total Contract Price}} of the {{efetaprov|Allowance}}s not accepted by | :Interest for the two {{efetaprov|Delivery Business Day}} grace period shall accrue at the Interest Rate specified in § {{efetaprov|13.5}} (''{{efetaprov|Default Interest}}'') for the period from (and including) the {{efetaprov|Delivery Date}} to (but excluding) the second {{efetaprov|Delivery Business Day}} following the {{efetaprov|Delivery Date}} on the {{efetaprov|Total Contract Price}} of the {{efetaprov|Allowance}}s not accepted by {{efetaprov|Buyer}}, such {{efetaprov|Total Contract Price}} calculated as follows: the number of {{efetaprov|Allowance}}s not accepted by {{efetaprov|Buyer}} multiplied by a fraction determined by dividing the {{efetaprov|Total Contract Price}} by the {{efetaprov|Contract Quantity}}. | ||
:(b) '''{{efetaprov|Seller’s Cover Costs}}'''. | :(b) '''{{efetaprov|Seller’s Cover Costs}}'''. If {{efetaprov|Buyer}} fails to accept {{efetaprov|Transfer}} of all or any portion of a {{efetaprov|Contract Quantity}} as required by § 8.2(a) ({{efetaprov|Two Business Days Grace Period}}) in accordance with the terms of an {{efetaprov|Allowance Transaction}} and {{efetaprov|Seller}} has not agreed to a Deferred Acceptance Date as provided for in § 8.2(c) (''{{efetaprov|Seller’s Right to Waive Its Cover Costs}}''), {{efetaprov|Buyer}} shall incur the obligation to pay {{efetaprov|Seller}}, as compensation for its failure to accept {{efetaprov|Transfer}} of the {{efetaprov|Allowance}}s, an amount (hereinafter “'''{{efetaprov|Seller’s Cover Costs}}'''”) equal to the sum of: | ||
::(i) the price, if any, less than the portion of the {{efetaprov|Total Contract Price}} applicable to the {{efetaprov|Allowance}}s not accepted by | ::(i) the price, if any, less than the portion of the {{efetaprov|Total Contract Price}} applicable to the {{efetaprov|Allowance}}s not accepted by {{efetaprov|Buyer}}, which {{efetaprov|Seller}}, acting in a commercially reasonable manner either did, or would have been able to, receive, in an arm’s length transaction with a third party or parties, from the resale of the {{efetaprov|Allowance}}s not accepted by {{efetaprov|Buyer}}; | ||
::(ii) such reasonable additional incidental costs as | ::(ii) such reasonable additional incidental costs as {{efetaprov|Seller}} incurred in attempting to make or making such resale of the {{efetaprov|Allowance}}s; and | ||
::(iii) interest accrued during the two {{efetaprov|Delivery Business Day}} grace period as provided in § 8.2(a); plus interest, at the {{efetaprov|Interest Rate}} specified in § {{efetaprov|13.5}} (''{{efetaprov|Default Interest}}''), accrued from (and including) the first Delivery Business Date following the {{efetaprov|Delivery Date}}, to (but excluding) the date of receipt by | ::(iii) interest accrued during the two {{efetaprov|Delivery Business Day}} grace period as provided in § 8.2(a); plus interest, at the {{efetaprov|Interest Rate}} specified in § {{efetaprov|13.5}} (''{{efetaprov|Default Interest}}''), accrued from (and including) the first Delivery Business Date following the {{efetaprov|Delivery Date}}, to (but excluding) the date of receipt by {{efetaprov|Seller}} of damages for {{efetaprov|Buyer}}’s failure to accept, such amount calculated as follows: | ||
::''Amount on which interest accrues = ANA x CP'' | ::''Amount on which interest accrues = ANA x CP'' | ||
::Where: | ::Where: | ||
:::'''ANA''' means {{efetaprov|Allowance}}s not accepted, the total number of {{efetaprov|Allowance}}s | :::'''ANA''' means {{efetaprov|Allowance}}s not accepted, the total number of {{efetaprov|Allowance}}s {{efetaprov|Buyer}} failed to accept; and | ||
:::'''CP''' means the aggregate {{efetaprov|Contract Price}} that | :::'''CP''' means the aggregate {{efetaprov|Contract Price}} that {{efetaprov|Buyer}} would have to pay to {{efetaprov|Seller}} for all {{efetaprov|Allowance}}s not accepted by it. | ||
:(c) '''{{efetaprov|Seller’s Right to Waive Its Cover Costs}}'''. The {{efetaprov|Seller}} | :(c) '''{{efetaprov|Seller’s Right to Waive Its Cover Costs}}'''. The {{efetaprov|Seller}} may invoice {{efetaprov|Buyer}} for damages payable pursuant to § {{efetaprov|8.2}}(b) (''{{efetaprov|Seller’s Cover Costs}}'') in accordance with the requirements of Payment Cycle B as defined in § {{efetaprov|13.2}} (''Payment''). However, {{efetaprov|Seller}} may alternatively, but shall be under no obligation to, defer the due date on the payment of such damages for a reasonable period of time (but in no event beyond the applicable {{efetaprov|Reconciliation Deadline}}) if {{efetaprov|Buyer}} has indicated to {{efetaprov|Seller}} its intent to attempt to cure its acceptance default within a period of time acceptable to {{efetaprov|Seller}}. | ||
::(i) At any time prior to the due date applicable to the payment of damages due to | ::(i) At any time prior to the due date applicable to the payment of damages due to {{efetaprov|Seller}} under §8.2(b), {{efetaprov|Buyer}} may offer to accept {{efetaprov|Transfer}} from {{efetaprov|Seller}} on a new {{efetaprov|Delivery Date}} (the “'''{{efetaprov|Deferred Acceptance Date}}'''”) of the {{efetaprov|Allowance}}s it failed to accept {{efetaprov|Transfer}} of on the original {{efetaprov|Delivery Date}}. The {{efetaprov|Seller}} may, but is not required to, agree to attempt to again {{efetaprov|Transfer}} such replacement {{efetaprov|Allowance}}s to {{efetaprov|Buyer}} on the Deferred Acceptance Date. If it so agrees, {{efetaprov|Seller}}, in lieu of the damages it is entitled to recover under § {{efetaprov|8.2}}(b), may both {{efetaprov|Transfer}} and receive payment of the {{efetaprov|Contract Price}} for the {{efetaprov|Allowance}}s on the Deferred Acceptance Date and to further invoice {{efetaprov|Buyer}} for interest for the intervening period calculated as the sum of the interest accrued during the two {{efetaprov|Delivery Business Day}} grace period as provided in § {{efetaprov|8.2}}(a) plus interest at the Interest Rate specified in § {{efetaprov|13.5}} (''{{efetaprov|Default Interest}}''), from (and including) the second {{efetaprov|Delivery Business Day}} following the {{efetaprov|Delivery Date}} to (but excluding) the date of actual acceptance of {{efetaprov|Transfer}} of the Allowance(s) previously not accepted, accrued on the amount calculated in accordance with the formula set forth in § {{efetaprov|8.2}}(b)(iii). | ||
::(ii) If | ::(ii) If {{efetaprov|Seller}} agrees to {{efetaprov|Buyer}}’s offer to accept {{efetaprov|Transfer}} of the {{efetaprov|Allowance}}s on a Deferred Acceptance Date as provided above in subparagraph (i), but {{efetaprov|Buyer}} again defaults on its acceptance of {{efetaprov|Transfer}} obligation, {{efetaprov|Seller}} may invoice {{efetaprov|Buyer}} for an amount calculated in accordance with § {{efetaprov|8.2}}(b) (''{{efetaprov|Seller’s Cover Costs}}) save that the amount it may so invoice {{efetaprov|Buyer}} shall account for both: | ||
:::(A) interest, calculated as provided in § {{efetaprov|8.2}}(b)(iii); and | :::(A) interest, calculated as provided in § {{efetaprov|8.2}}(b)(iii); and | ||
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§ {{efetaprov|8.3}} '''{{efetaprov|Excess Emissions Penalty (“EEP”) and EEP Equivalent}}''': | § {{efetaprov|8.3}} '''{{efetaprov|Excess Emissions Penalty (“EEP”) and EEP Equivalent}}''': | ||
:(a) '''Applicability'''. The Parties to any {{efetaprov|Allowance Transaction}}s desiring to make {{efetaprov|EEP | :(a) '''Applicability'''. The Parties to any {{efetaprov|Allowance Transaction}}s desiring to make {{efetaprov|EEP}} inapplicable and inoperative to the calculation of the {{efetaprov|Buyer’s Cover Costs}} for any {{efetaprov|Allowance Transaction}}s between them may do so either globally by specifying {{efetaprov|EEP}} as not applying in Part II of this {{efetaprov|Allowances Appendix}}, or specifically, with respect to a particular {{efetaprov|Allowance Transaction}}, by so agreeing in the terms of that {{efetaprov|Allowance Transaction}} itself. | ||
:(b) '''{{efetaprov|Excess Emissions Penalty}}'''. If {{efetaprov|EEP}} is applicable, | :(b) '''{{efetaprov|Excess Emissions Penalty}}'''. If {{efetaprov|EEP}} is applicable, {{efetaprov|Buyer}} may invoice {{efetaprov|Seller}} in the amount of an {{efetaprov|EEP}} it incurs as the result of {{efetaprov|Seller}}’s failure to {{efetaprov|Transfer}} to it {{efetaprov|Allowance}}s when required pursuant to the terms of an {{efetaprov|Allowance Transaction}}. | ||
:(c) '''{{efetaprov|Excess Emissions Penalty Equivalent}}'''. If {{efetaprov|EEP Equivalent}} is applicable, | :(c) '''{{efetaprov|Excess Emissions Penalty Equivalent}}'''. If {{efetaprov|EEP Equivalent}} is applicable, {{efetaprov|Buyer}} may invoice {{efetaprov|Seller}} for an {{efetaprov|EEP Equivalent}} it incurs as the result of {{efetaprov|Seller}}’s failure to {{efetaprov|Transfer}} to it {{efetaprov|Allowance}}s when required pursuant to the terms of an {{efetaprov|Allowance Transaction}}. | ||
:(d) '''{{efetaprov|Duty to Mitigate}}'''. The {{efetaprov|Seller}}’s obligation to pay the {{efetaprov|EEP}} or the {{efetaprov|EEP Equivalent}} is subject always to | :(d) '''{{efetaprov|Duty to Mitigate}}'''. The {{efetaprov|Seller}}’s obligation to pay the {{efetaprov|EEP}} or the {{efetaprov|EEP Equivalent}} is subject always to {{efetaprov|Buyer}}’s overriding obligation to use commercially reasonable endeavours (including, without limitation, making use of any excess {{efetaprov|Allowance}}s it may have available to it at the time, and/or procuring such {{efetaprov|Allowance}}s as are available in the market) to satisfy its obligation to surrender the required number of {{efetaprov|Allowance}}s necessary to avoid or otherwise mitigate its {{efetaprov|EEP}} liability. For the avoidance of doubt, {{efetaprov|Buyer}}’s duty to mitigate its {{efetaprov|EEP}} exposure is limited to management of its Allowance portfolio and shall not impose upon it any further obligation regarding its operation of any installation with an obligation to surrender {{efetaprov|Allowance}}s to a {{efetaprov|Relevant Authority}}. | ||
:(e) '''{{efetaprov|Evidence of Commercially Reasonable Efforts}}'''. Upon request, | :(e) '''{{efetaprov|Evidence of Commercially Reasonable Efforts}}'''. Upon request, {{efetaprov|Buyer}} shall confirm to {{efetaprov|Seller}}: | ||
::(i) that it has incurred {{efetaprov|EEP | ::(i) that it has incurred {{efetaprov|EEP}} consequent upon {{efetaprov|Seller}}’s failure to {{efetaprov|Transfer}} {{efetaprov|Allowance}}s to it; | ||
::(ii) the extent to which the requirement for | ::(ii) the extent to which the requirement for {{efetaprov|Buyer}} to pay the {{efetaprov|EEP}} or the {{efetaprov|EEP Equivalent}} results from {{efetaprov|Seller}}’s failure to make such a Transfer; | ||
::(iii) that it was unable to mitigate its {{efetaprov|EEP | ::(iii) that it was unable to mitigate its {{efetaprov|EEP}} exposure, | ||
:and shall provide | :and shall provide {{efetaprov|Seller}} with evidence: (A) that the {{efetaprov|EEP}}, as applicable, was incurred by it; (B) that such {{efetaprov|EEP}} was incurred as a result of {{efetaprov|Seller}}’s failure to perform its {{efetaprov|Transfer}} obligation; and (C) of its commercially reasonable endeavours to mitigate its exposure to such {{efetaprov|EEP}} as it has invoiced to {{efetaprov|Seller}}; provided, however, that should {{efetaprov|Seller}} elect to challenge {{efetaprov|Buyer}} in respect of any of the above matters, then the burden for demonstrating: (A) that such {{efetaprov|EEP}} was not actually incurred by {{efetaprov|Buyer}}; (B) that such {{efetaprov|EEP}} was not incurred by {{efetaprov|Buyer}} as a result of {{efetaprov|Seller}}’s non-performance; and/or (C) the insufficiency, lack of thoroughness or unreasonableness of such endeavours shall be on {{efetaprov|Seller}} and, if § 22.3 (Expert Determination) is specified as applying in Part II of this {{efetaprov|Allowances Appendix}} the process by which such challenge will be determined shall be in accordance with the procedures set forth in § {{efetaprov|22.3}} (''{{efetaprov|Expert Determination}}''). | ||
:(f) '''{{efetaprov|Later Mitigation of Recovered EEP or EEP Equivalent}}'''. To the extent an initially assessed and recovered {{efetaprov|EEP}} is later reduced and/or fully or partly returned or credited to | :(f) '''{{efetaprov|Later Mitigation of Recovered EEP or EEP Equivalent}}'''. To the extent an initially assessed and recovered {{efetaprov|EEP}} is later reduced and/or fully or partly returned or credited to {{efetaprov|Buyer}} by a {{efetaprov|Relevant Authority}} for any reason whatsoever, only such reduced and finally assessed {{efetaprov|EEP}} shall apply. {{efetaprov|EEP}} recovered by {{efetaprov|Buyer}} in the form of damages under this § 8 which are later reduced or returned to such {{efetaprov|Buyer}} shall be returned upon demand to {{efetaprov|Seller}} who paid such damages, and {{efetaprov|Buyer}} shall provide {{efetaprov|Seller}} with prompt notification of any such reduction or return. Similarly, in the event {{efetaprov|Seller}} has made {{efetaprov|Buyer}} whole for an {{efetaprov|EEP Equivalent}}, and all or any portion of the underlying {{efetaprov|EEP}} upon which {{efetaprov|Seller}}’s {{efetaprov|EEP Equivalent}} payment was based is later returned to {{efetaprov|Buyer}} by its resale customer, {{efetaprov|Buyer}} shall return an equivalent amount of its own {{efetaprov|EEP Equivalent}} payment to {{efetaprov|Seller}}. | ||
§ {{efetaprov|8.4}} '''{{efetaprov|Amounts Payable}}'''. Amounts that are due according to this § {{efetaprov|8}} shall be invoiced and paid in accordance with Payment Cycle B as defined in § {{efetaprov|13.2}} (''Payment''). <br> | § {{efetaprov|8.4}} '''{{efetaprov|Amounts Payable}}'''. Amounts that are due according to this § {{efetaprov|8}} shall be invoiced and paid in accordance with Payment Cycle B as defined in § {{efetaprov|13.2}} (''Payment''). <br> | ||
§ {{ | § {{efetaprov|8.5}} '''{{efetaprov|Remedies for Failure to Transfer or Accept after Cessation of Suspension Event}}'''. | ||
:(a) Where | :(a) Where {{efetaprov|Buyer}} fails to accept {{efetaprov|Transfer}} from {{efetaprov|Seller}} of the {{efetaprov|Contract Quantity}} in whole or in part on a {{efetaprov|Delayed Delivery Date}} and such failure is not excused by an event of {{efetaprov|Force Majeure}}, another {{efetaprov|Suspension Event}} or {{efetaprov|Seller}}’s non-performance, the {{efetaprov|Seller’s Cover Costs}} shall consist of the sum of the following elements: | ||
::(i) the {{efetaprov|Seller’s Cover Costs}} as provided in § {{ | ::(i) the {{efetaprov|Seller’s Cover Costs}} as provided in § {{efetaprov|8.2}}(b) of this {{efetaprov|Allowances Appendix}}; | ||
::(ii) an amount (the “'''{{efetaprov|Default Cost of Carry Amount}}'''”) calculated at the {{efetaprov|Default Cost of Carry Rate}} for the {{efetaprov|Default Cost of Carry Calculation Period}} multiplied by the product of the {{efetaprov|Contract Price}} and the number of {{efetaprov|Allowance}}s not {{ | ::(ii) an amount (the “'''{{efetaprov|Default Cost of Carry Amount}}'''”) calculated at the {{efetaprov|Default Cost of Carry Rate}} for the {{efetaprov|Default Cost of Carry Calculation Period}} multiplied by the product of the {{efetaprov|Contract Price}} and the number of {{efetaprov|Allowance}}s not {{efetaprov|Transferred}} or accepted for the relevant {{efetaprov|Allowance Transaction}}, divided by three hundred and sixty (360). Such {{efetaprov|Default Cost of Carry Amount}} shall be identified in the relevant invoice; and | ||
::(iii) interest on the {{efetaprov|Default Cost of Carry Amount}} accrued from (and including) the {{efetaprov|Delivery Business Day}} following the {{efetaprov|Default Cost of Carry Calculation Period}}, to (but excluding) the receipt by | ::(iii) interest on the {{efetaprov|Default Cost of Carry Amount}} accrued from (and including) the {{efetaprov|Delivery Business Day}} following the {{efetaprov|Default Cost of Carry Calculation Period}}, to (but excluding) the receipt by {{efetaprov|Seller}} of damages for {{efetaprov|Buyer}}’s failure to accept Transfer, calculated at the Interest Rate specified in § 13.5 (Default Interest) of the Agreement. | ||
:(b) Where {{efetaprov|Seller}} fails to {{efetaprov|Transfer}} to | :(b) Where {{efetaprov|Seller}} fails to {{efetaprov|Transfer}} to {{efetaprov|Buyer}} the {{efetaprov|Contract Quantity}} in whole or in part on a {{efetaprov|Delayed Delivery Date}} and such failure is not excused by an event of {{efetaprov|Force Majeure}}, another {{efetaprov|Suspension Event}} or {{efetaprov|Buyer}}’s non-performance, {{efetaprov|Buyer’s Cover Costs}} shall consist of the aggregate of the following elements: | ||
::(i) {{efetaprov|Buyer’s Cover Costs}}, as provided in either: | ::(i) {{efetaprov|Buyer’s Cover Costs}}, as provided in either: | ||
:::(a) § {{ | :::(a) § {{efetaprov|8.1}}(b)(i) of this {{efetaprov|Allowances Appendix}}; or, | ||
:::(b) where an {{efetaprov|EEP}} | :::(b) where an {{efetaprov|EEP}} applies and has arisen, § {{efetaprov|8.1}}(b)(ii) of this Allowance Appendix; | ||
::in either case, reduced by | ::in either case, reduced by | ||
::(ii) the {{efetaprov|Default Cost of Carry Amount}}; | ::(ii) the {{efetaprov|Default Cost of Carry Amount}}; | ||
provided, always, that | provided, always, that if the number resulting from application of the applicable formula set forth immediately above in either § {{efetaprov|8.5}}(a) or § {{efetaprov|8.5}}(b) results in a negative number, such number shall be deemed to be zero and no damages will be owed. <br> |