Template:M summ EUA Annex Settlement Disruption: Difference between revisions

Template:M summ EUA Annex Settlement Disruption (view source)

Revision as of 16:01, 10 July 2023

1,000 bytes added , 10 July 2023

no edit summary

Amwelladmin

Bureaucrats, Interface administrators, Administrators

82,890

edits

@@ Line 16: / Line 16: @@
 Not for the only time in this Annex, {{icds}} have contemplated an outcome which doesn’t feel enormously derivative ''literate''.
-If there is a {{euaprov|Settlement Disruption Event}} — say I have sold you forward some {{euaprov|Allowances}}, but for some external reason beyond my control and personal culpability, when it comes time to deliver them, transiently I cannot — then, for the want of any better idea, the transaction goes into sort of suspended animation. Fair enough: mountain, Mohammed and all that. But my obligations are still there. They are just put on ice. Aren’t they?
+If there is a {{euaprov|Settlement Disruption Event}} — say I have sold you forward some {{euaprov|Allowances}}, but for some external reason beyond my control and personal culpability, when it comes time to deliver them, transiently I cannot — then, for the want of any better idea, the Transaction goes into sort of suspended animation. Fair enough: mountain, Mohammed and all that. But my obligations are still there. They are just put on ice.
-But once that [[Settlement Disruption Event - Emissions Annex Provision|disruption]] has lifted, what should we do? We are back at the races. We should, therefore ''carry on'', you would think; perhaps with some allowance for cost of carry. And indeed this is what might happen, ''but only if you elect that {{euaprov|Payment on Termination for Settlement Disruption}} should apply''. If you don’t, the parties simply walk away — refunding pre-paid forward payments, and hanging on to whatever it is that they sold.
+Aren’t they?
+But once that [[Settlement Disruption Event - Emissions Annex Provision|disruption]] has lifted, what should we do? We are back at the races. We should, therefore ''carry on'', you would think; perhaps with some allowance for cost of carry. And indeed this is what might happen, ''but only if you elect that {{euaprov|Payment on Termination for Settlement Disruption}} should apply''. In this case the parties’ obligations — which, according to the theory of the game, have been disrupted and cannot in practice be performed, remember — resume as of the {{isdaprov|Early Termination Date}}. Here, refer to our [[pjc:Right to Terminate Following Event of Default - ISDA Provision|guide to closing out]] the {{isdama}}, which contains a mechanism for ascertaining the value of undelivered and unpaid obligations.
+But as you do, notice also  equivalent provisions in the {{eqdefs}} where disrupty things happen: here there is a special {{eqderivprov|Cancellation and Payment}} method of determining the final value of this broken contract: it does not rely on Early Termination, and does not presume either party to have committed an Termination Event or an Event of Default.
+But weirder still is what happens if you ''haven’t'' specified {{euaprov|Payment on Termination for Settlement Disruption}}: this is the [[then I woke up and it was all a dream]] school of drafting. If you don’t, the parties simply walk away — refunding pre-paid forward payments, and hanging on to whatever it is that they sold.
 Now folks: on what ''planet'' in the entire ISDA extended fan-fiction ''galaxy'' would anyone ever do that? This might feel like the sort of thing was lost sacred knowledge to the [[Children of the Woods]] — a kind of environmentally-friendly reprise to the never-used {{isda92prov|First Method}} — but come on folks. This is the 2020s. And besides, here the operating theory is the Settlement Disruption Event has ''lifted''. The seller is perfectly able to perform the contract. Why wouldn’t it?