Absence of Litigation - ISDA Provision
2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual™
3(c) in all its glory
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Section 3(c) was one of the bits of the 1992 ISDA that ISDA’s crack drafting squad™ “got mostly right” at the first time of asking. But still, some bright sparks on the ’Squad took it upon themselves, in the 2002 ISDA, to switch out reference to “Affiliates” which — I don’t know, might take in some distant half-bred cousin you don’t enormously care about and who doesn’t cast any real shadow on your creditworthiness — with “Credit Support Providers” and “Specified Entities” who no doubt more keenly do, but this leads to just more fiddliness in the Schedule over-stuffed with fiddliness, since one must then go to the trouble of specifying, and then arguing with your counterparties about, who should count as a Specified Entity for this remote and rather vacuous purpose.
Keeps the home fires burning in the hobbity shires where ISDA negotiators make their homes, we suppose.
More generally, absence of litigation it is roundly pointless representation, but seeing as (other than unaffiliated Hedge Fund managers) no-one really complains about it, it is best to just leave well alone. It is one for the life’s too short file.
But if you do see your life stretching away unendingly to the horizon, and you haven’t got anything else in the calendar in the next half hour, go west, young man. Or woman.
- The JC’s famous Nutshell™ summary of this clause
- Absence of litigation representation generally: what is is there fore; what it tries to achieve.
- Some perspective seeking: What types of litigation are we talking about here: it is not just any old litigation.
- On “enforceability-threatening” and “existentially-threatening” litigation.
- The peril of deemed repetition — a potential risk, but really?
- On picking battles to fight, ditches to die in, etc.