Notices - ISDA Provision
2002 ISDA Master Agreement A Jolly Contrarian owner’s manual™ 12 in all its glory
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Overview
The major change between the versions of Section 12 (Notices) was the 2002 ISDA’s inclusion of e-mail as a means of communication in addition to the 1992 ISDA’s electronic messaging system. Also, fax and electronic messaging system are not permitted means of serving close-out communications (i.e., under Sections 5 and 6) under the 1992 ISDA, but fax is permitted under the 2002 ISDA, whereas electronic messaging system and email are not. Got all that?
Summary
Who would have thought a Notices provision would be so controversial? Especially the question, “what is an electronic messaging system”?
No-one, it is humbly submitted, until Andrews, J. of the Chancery Division, was invited to opine on Greenclose v National Westminster Bank plc, the kind of “little old lady” case that makes bad law.[1] The learned judge does nothing to dispel the assumption that lawyers are technological Luddites who would apply Tip-Ex to their VDUs if they didn’t have someone to do their typing for them (and if they knew what a VDU was).
For there it was held that email is not an “electronic messaging system” and, as such, was an invalid means for serving a close-out notice under the 1992 ISDA, which doesn’t mention email. Read in depth about that case here.
And that was before the entire, interconnected world decided, as an orchestrated whole, to cease the conduct of the business as a physical idea for an indefinite period in early 2020. Suddenly, a widely-used and, it was assumed, well-tested notices regime started to look like it might not work.
Oh, and another thing: who seriously has a telex in this day and age?
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- The JC’s famous Nutshell™ summary of this clause
- May deliver? or must deliver? Do I have an alternative? The curious case of Greenclose.
- Close-out notices are special
- And “deliver” means what exactly? A ramble through the standard reference dictionaries of our time, legal and otherwise.
- “Email” and “electronic messaging system”. The same, right? Right?? GUYS!?
- The coronavirus edition: closeout in a time of global mass-hysteria and what it all means if you aren’t allowed out
See also
References
- ↑ As the JC always says, anus matronae parvae malas leges faciunt.