2007 EFET General Agreement
Version 2.1(a) (Power)
A Jolly Contrarian owner’s manual™
7.5 in a Nutshell™
The JC’s Nutshell™ summaries are moving to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get them here. Sign up at Substack.
7.5 in all its glory
§ 7.5 Suspension Event
- (a) Definition of Suspension Event. “Suspension Event) means the occurrence of any of the following events which makes it impossible for a Party affected by the Suspension Event (the “SE Affected Party”) to perform its Transfer or acceptance of Transfer obligations in accordance with the terms of the Allowance Transaction and the relevant Emissions Trading Scheme, through a Relevant Registry:
- (i) absence of Registry Operation; or
- (ii) the occurrence of an Administrator Event.
- (b) Suspension of Delivery and Acceptance Obligations. If a Party is prevented due to a Suspension Event from performing its obligations of Transfer or acceptance of Transfer, as applicable , under an Allowance Transaction (the “SE Affected Transaction), no breach or default on the part of the SE Affected Party shall be deemed to have occurred and the obligations of both Parties with respect to the Allowance Transaction affected by the Suspension Event will be suspended for the duration of the Suspension Event and, subject to § 7.5(e) (Settlement of Allowance Transaction Prevented by Suspension Event) below, will not be required to be performed until the day that is ten (10) Delivery Business Days after the Suspension Event is overcome or ceases to subsist (the “Delayed Delivery Date). Subject to § 7.5(e) (Settlement of Allowance Transaction Prevented by Suspension Event) below, upon the Suspension Event being overcome or ceasing to subsist, both Parties will resume full performance of their obligations (including, For the avoidance of doubt, any suspended obligations) under the Agreement in respect of the relevant Allowance Transaction.
- (c) Notification and Mitigation of Suspension Event. The first Party learning of the occurrence of a Suspension Event shall, as soon as practicable, notify the other Party of the commencement of the Suspension Event. Each Party shall then undertake in good faith to determine, and notify the other Party with, to the extent then available, a non-binding estimate of the extent and expected duration of the Suspension Event and its impact on performance of all Allowance Transactions affected by the Suspension Event. The SE Affected Party shall use all commercially reasonable efforts to mitigate the effects of the Suspension Event and shall, during the continuation of the Suspension Event, provide the other Party with reasonable updates, when and if available, of the extent and expected duration of its inability to perform. Each Party agrees in good faith to immediately notify the other Party once the Suspension Event is overcome or ceases to subsist.
- (d) Cost of Carry on Delayed Deliveries. In the event that all or part of the Contract Quantity of a SE Affected Transaction is Transferred to Buyer on or before the Delayed Delivery Date, Buyer shall pay to Seller an additional amount (the “Cost of Carry Amount”) calculated at the Cost of Carry Rate for the Cost of Carry Calculation Period on the product of the number of Allowances so Transferred and the Contract Price for the relevant Allowance Transaction, divided by three hundred and sixty (360). Such Cost of Carry Amount shall be identified in the relevant invoice.
- (e) Settlement of Allowance Transaction Prevented by Suspension Event. Where a Suspension Event for a SE Affected Transaction continues to exist on the applicable Long Stop Date, the SE Affected Transaction shall be deemed an Allowance Transaction affected by Force Majeure and either Party may, by written notice to the other Party, terminate all (but not less than all) of the SE Affected Allowance Transaction(s) in accordance with § 7.4(b) (Force Majeure Termination Payment) of the Allowances Appendix and in such instance § 7.4(b)(i) (No Termination Payment) shall apply.
Resources and Navigation
The definition of Suspension Event is more or less the same in all three emissions trading documentation regimes. Compare:
ISDA: Suspension Event
IETA: Suspension Event
EFET: Suspension Event
As an extra treat, here are some deltaviews:
IETA vs EFET: comparison
ISDA vs IETA: comparison
Template:M summ EFET Allowance Annex 7.5
Here the free bit runs out. Subscribers click 👉 here
. New readers sign up 👉 here
and, for ½ a weekly 🍺 go full ninja about all these juicy topics