Inability of Head or Home Office to Perform Obligations of Branch - ISDA Provision
ISDA Anatomy™
2002 ISDA
then, for so long as the relevant event or circumstance continues to exist with respect to both the Office referred to in Section 5(b)(i)(1) or 5(b)(ii)(1), as the case may be, and the Affected Party’s head or home office, such failure will not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1).
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From the “shoot me” department, this multi-line bunker buster introduced into the 2002 ISDA which, to give it some kind of credit, doesn’t generate a great deal of comment in the course of your average negotiation. That is as likely to be because it is so stupefyingly dull that no one has summoned the fortitude to read it as it is because it is a sensible, prudent allocation of risk.
But here you are, specially for you, the Jolly Contrarian’s Nutshell™ service renders it for you in emperor’s couturier style:
5(e) in a Nutshell™ (2002 ISDA edition)
5(e) Head office unable to perform branch’s obligations. If:
- (i) an Illegality or a Force Majeure occurs a branch of an Affected Party other than its head office; AND
- (ii) it has representated that its head office will be liable for all branch obligations (per Section 10(a))[2]; AND
- (iii) the Non-Affected Party asks the Affected Party to perform through its head office; AND
- (iv) the Affected Party cannot perform because its head office would also be subject to an Illegality or a Force Majeure if tried to do so, then as long as that situation prevails, that failure will not count as a Failure to Pay or Credit Support Default for the Affected Party.
Even simplified, I am buggered if I can see what this is getting at.
See also
I’m sorry I asked==References==