Suspension Event - EFET Allowance Provision

2007 EFET General Agreement Version 2.1(a) (Power) A Jolly Contrarian owner’s manual™ 7.1 in a Nutshell™ The JC’s Nutshell™ summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. 7.1 in all its glory § 7.1 Definition of Force Majeure. “Force Majeure” in the context of an Allowance Transaction means the occurrence of an event or circumstance beyond the control of the Party affected by Force Majeure (the “Affected Party”) that cannot, after using all reasonable efforts, be overcome and which makes it impossible for the Affected Party to perform its Transfer or acceptance of Transfer obligations in accordance with the terms of this Agreement and the relevant Emissions Trading Scheme. For the avoidance of doubt, but without limitation, Force Majeure shall not include an event or circumstance where there are insufficient Allowances in the relevant Holding Account(s) to effect the required Transfer, whether that insufficiency is caused by the low or non-allocation of Allowances from a Member State or a Non-Member State, the delay or failure of a Member State or Central Administrator to replace Allowances of the Third Compliance Period with Allowances for the Fourth Compliance Period or the failure of that Party to procure sufficient Allowances to meet its Transfer obligations. If an event or circumstance which would otherwise constitute or give rise to Force Majeure also constitutes a Suspension Event, it will be treated as a Suspension Event and will not constitute a Force Majeure event. edit Comparison See our natty emissions comparison table between the IETA, EFET and ISDA versions of emissions trading docs Resources and Navigation Index: Click ᐅ to expand: EFET Allowance Annex - Premium Emissions Emissions trading documentation ISDA: EU Anatomy • EU Wikitext • EU Nutshell (premium) • UK Anatomy • UK Wikitext (to be merged into EU Anatomy) IETA: IETA Master Agreement • IETA Wikitext • IETA Nutshell (premium) EFET: EFET Allowances Appendix • EFET Allowances Wikitext • EFET Nutshell (premium) Premium version of this page

Overview

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The same broad concept is dealt with as follows:

• ISDA: Settlement Disruption Event
• EFET: Force Majeure
• IETA: Force Majeure

Functionally, the definitions of “Force Majeure” under Clause 7.1 the EFET Annex and Clause 13 of the IETA, and the definition of “Settlement Disruption Event” under (d)(i)(4) of the ISDA Emissions Annex are the same — here is a comparison between IETA and EFET, and here is a comparison between EFET and ISDA — so you do wonder whose idea it was to call it something different.

Let us speculate: the IETA was written first, is independent of the ISDA universe, and for reasons best known to IETA’s crack drafting squad™, they decided to call this a “Force Majeure”. Being an event beyond the reasonable control of the affected party there is some logic to this.

ISDA’s crack drafting squad™ was, as usual, late to the “novel asset class” party and, as it couldn’t find a spot, decided to park its tanks on IETA’s lawn, borrowing much of the technology wholesale but unable to call this event a Force Majeure because the ISDA Master Agreement already has a Force Majeure Event, this is quite different — for whatever reason, the timings are a lot longer — and that would confuse people even beyond ISDA’s tolerance for confusing people.

So ISDA’s crack drafting squad™ went with its product specific “stuff happens” label, “Settlement Disruption Event”. In any case, to make your lives easier, “Force Majeure - Emissions Annex Provision” redirects to Settlement Disruption Event. The JC’s nice like that.

The differences are to account for the architecture and nomenclature of the different master agreements, though the IETA has a conflict clause favouring Suspension Event over Force Majeure/Settlement Disruption Event, which the EFET does not.

Summary

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• The JC’s famous Nutshell™ summary of this clause

Template:M premium EFET Allowance Annex 7.1

See also

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• Non-Performance Due to Force Majeure and Suspension Event