Template:IETA Master Agreement 12

12 Transfer or Acceptance Failure
12.1 Failure to Transfer.

12.1(a) Where in accordance with Schedule 2 (‘‘Elections’’), the Excess Emissions Penalty does not apply.

Except to the extent:

(i) caused by the Receiving Party’s non-performance under this Agreement; or

(ii) that the Delivering Party is relieved from complying with a relevant obligation under Clause 13.1 (Force Majeure);

(iii) that the Delivering Party is relieved from complying with a relevant obligation under Clause 13.4 (Suspension Event); or

(iv) that the Delivering Party is relieved from complying with a relevant obligation under Clause 14.7 (Illegality),

if the Delivering Party fails to make a Transfer of a PTA Quantity (whether in whole or in part) to the relevant Receiving Party’s Holding Account on or before a Delivery Date for any reason or makes a Transfer Request in respect of a Holding Account other than the relevant Receiving Party’s Holding Account (in either case in breach of Clauses 5 (Allowance Transfers) or 6 (Effecting Transfers) or both of them), then the Receiving Party may, by notice to the Delivering Party, require the Delivering Party to remedy such failure and:

(i) if such failure is remedied by the Delivering Party on or before the Final Delivery Date, then (i) the Receiving Party shall pay to the Delivering Party the Contract Amount and (ii) the Delivering Party shall pay to the Receiving Party interest on an amount equal to the Allowance Price multiplied by the number of Period Traded Allowances not Transferred to such Receiving Party’s Holding Account by the Delivery Date for the period from (and including) the Delivery Date to (but excluding) the actual date of Transfer to the Receiving Party at the rate specified in Clause 9.5(a) (Interest); but

(ii) if such failure is not remedied by the Delivering Party on or before the Final Delivery Date, the Receiving Party may, by written notice to the Delivering Party, terminate that Transaction. In such a case, the Delivering Party shall pay to the Receiving Party the Receiving Party’s Replacement Cost on or before the third (3rd) Banking Day following receipt of such written notice of termination from the Receiving Party,

in either case adjusted to take into account any amount previously paid by the Receiving Party to the Delivering Party in respect of that Transaction.

12.1(b) Where in accordance with Schedule 2 (‘‘Elections’’), the Excess Emissions Penalty does apply.

Except to the extent:

(i) caused by the Receiving Party’s non-performance under this Agreement; or

(ii) that the Delivering Party is relieved from complying with a relevant obligation under Clause 13.1 (Force Majeure);

(iii) that the Delivering Party is relieved from complying with a relevant obligation under Clause 13.4 (Suspension Event); or

(iv) that the Delivering Party is relieved from complying with a relevant obligation under Clause 14.7 (Illegality),

if the Delivering Party fails to make a Transfer of a PTA Quantity (whether in whole or in part) to the relevant Receiving Party’s Holding Account on or before a Delivery Date for any reason or makes a Transfer Request in respect of a Holding Account other than the relevant Receiving Party’s Holding Account (in either case in breach of Clause 5 (Allowance Transfers) or 6 (Effecting Transfers) or both of them), then the Receiving Party may, by notice to the Delivering Party, require the Delivering Party to remedy such failure and:

(i) if such failure is remedied on or before the Final Delivery Date, then (i) the Receiving Party shall pay to the Delivering Party the Contract Amount and (ii) the Delivering Party shall pay to the Receiving Party interest on an amount equal to the Allowance Price multiplied by the number of Period Traded Allowances not Transferred to such Receiving Party’s Holding Account by the Delivery Date for the period from (and including) the Delivery Date to (but excluding) the actual date of Transfer to the Receiving Party at the rate specified in Clause 9.5 (Interest); but

(ii) if such failure is not remedied by the Delivering Party on or before the Final Delivery Date, the Receiving Party may, by written notice to the Delivering Party, terminate that Transaction. In such a case, the Delivering Party shall pay to the Receiving Party the Receiving Party’s Replacement Cost on or before the third (3rd) Banking Day following the day on which the Receiving Party is able to effect a Buy-In (which may be a Buy-In, on any such date, of less than the entire number of Undelivered Allowances) if and to the extent that paragraph (A)(i) or A(ii)(1) of the Receiving Party’s Replacement Cost applies, or on the third (3rd) Banking Day following the day on which the Receiving Party is or would be able to effect a purchase of Allowances in accordance with paragraph A(ii)(2) of Receiving Party’s Replacement Cost, if and to the extent that paragraph applies, in either case adjusted to take into account any amount previously paid by the Receiving Party to the Delivering Party in respect of that Transaction.

12.1(c) Subject to Clause 12.1(d) (Failure to Transfer), if as a result of the Delivering Party’s failure to make a Transfer (in whole or in part) the Receiving Party becomes liable to pay any EEP Amount, then the Receiving Party shall provide to the Delivering Party, upon its reasonable request, evidence to the reasonable satisfaction of the Delivering Party:

(i) that the Receiving Party has incurred an EEP Amount consequent on the Delivering Party’s failure to make a Transfer (in whole or in part);

(ii) the extent to which the requirement for the Receiving Party to pay any EEP Amount results from the Delivering Party’s failure to make such Transfer; and

(iii) that the Receiving Party could not have used Allowances to which it had legal and beneficial interest in any Holding Account(s) in any Registry in order to avoid or reduce its liability to pay any EEP Amount which it claims from the Delivering Party as part of the Receiving Party’s Replacement Cost.

12.1(d) The Delivering Party’s obligation to pay any EEP Amount under this Clause 12.1 (Failure to Transfer) is subject always to the Receiving Party’s overriding obligation to use its reasonable endeavors to avoid becoming liable for such EEP Amount or, when liable, to mitigate the payment obligation in relation to such EEP Amount and to allocate any such EEP Amount pro rata between all counterparties of the Receiving Party that have failed to make any Transfer; provided, however, that where the Receiving Party confirms that it has been unable to avoid becoming liable for any EEP Amount, it shall be for the Delivering Party to show that this liability has arisen as a result of the Receiving Party failing to use its reasonable endeavors to do so.

12.1(e) The Delivering Party shall pay such determined EEP Amount to the Receiving Party within two (2) Banking Days against the Receiving Party’s VAT invoice in respect thereof.

12.2 Failure to Accept.

Except to the extent:

(i) caused by the Delivering Party’s non-performance under this Master Agreement; or

(ii) that the Receiving Party is relieved from complying with a relevant obligation under Clause 13.1 (Force Majeure);

(iii) that the Delivering Party is relieved from complying with a relevant obligation under Clause 13.4 (Suspension Event); or

(iv) that the Receiving Party is relieved from complying with a relevant obligation under Clause 14.7 (Illegality),

if the Receiving Party fails to accept a Transfer of a PTA Quantity (whether tendered in whole or in part) to the relevant Receiving Party’s Holding Account by the Delivery Date for any reason or specifies an incorrect Holding Account other than the relevant Receiving Party’s Holding Account (in either case in breach of Clauses 5 (Allowance Transfers) or 6 (Effecting Transfers) or both of them), then the Delivering Party may, by notice to the Receiving Party, require the Receiving Party to remedy such failure and:

(i) if such failure is remedied by the Receiving Party on or before the Final Delivery Date, the Receiving Party shall pay to the Delivering Party interest on an amount equal to the Allowance Price multiplied by the number of Period Traded Allowances not Transferred to such Receiving Party’s Holding Account by the Delivery Date for the period from (and including) the Delivery Date to (but excluding) the actual date of Transfer to the Receiving Party at the rate specified in Clause 9.5(a) (Interest); but

(ii) if such failure is not remedied by the Receiving Party on or before the Final Delivery Date, the Delivering Party may, by written notice to the Receiving Party, terminate that Transaction. In such a case, the Receiving Party shall pay to the Delivering Party the Delivering Party’s Replacement Cost on or before the third (3rd) Banking Day following receipt of such written notice of termination from the Delivering Party,

in either case adjusted to take into account any amount previously paid by the Receiving Party to the Delivering Party in respect of that Transaction.