Paragraph 6, point e) of the Masteragrement (according to the standard form 1992 ISDA Master Agreement) is expressly referred to as “subject to possible occupation.” As noted above, Section 6 (f) of the Executive Framework Contract, inserted, followed the basic calculation provision contained in the ISDA Master Contract Manual of 1992. Initially, the planned improvement in point 6, point (f), instead of the compensation provided for in point 2 (c) was a more appropriate route for Shanpark, as it explicitly provided for the allocation of obligations arising from the absence of a captain`s contract. The most important thing is to remember that the ISDA executive contract is a clearing agreement and that all transactions are interdependent. Therefore, a default in a transaction counts by default among all transactions. Point 1 (c) describes the concept of a single agreement and is of paramount importance as it forms the basis for network closures. When a standard event occurs, all transactions are completed without exception. The concept of out-of-gap clearing prevents a liquidator from making “cherry pickings,” i.e. making payments on profitable transactions for his bankrupt client and refusing to do so in the case of an unprofitable customer. Ukrainian law currently requires a non-failing party to provide the insolvent bank and the Deposit Guarantee Fund (The Ukrainian Deposit Resolution Authority) with a list of transactions that result in a closing network and the estimated completion date of the final network.
This information must be provided within three business days from the date of the bank`s declaration of insolvency. Cooke J. was not discouraged by this conclusion by MHB Bank`s argument that damages not liquidated under an agreement, instrument or commitment between the parties are not “payable”. It appears, however, that he was part of his argument that the right to unselected damage must result from a breach of contract between the parties and not on another basis. Consider whether a claim for damages for a mis-sale arose, in this case, from a breach or breach of the bank`s trust obligation against Shanpark (and defendant against each other). The isda masteragrement is a framework agreement that defines the terms and conditions between parties wishing to trade over-the-counter derivatives. There are two main versions that are still widely used on the market: the 1992 ISDA Master Agreement (Multicurrency – Cross Border) and the 2002 ISDA Master Agreement. This uniform approach to the agreement is an integral part of the structure and part of the network-based protection offered by the framework agreement.
The fact that all transactions are the sole contract enhances the ability to close these transactions and obtain a one-time net amount payable in the event of default. In MHB-Bank AG/Shanpark Ltd [2015] EWHC 408 (Comm), Mr. Justice Cooke confirmed to the Commercial Court that the provisions of the 1992 ISDA Director Contract relating to the stretching and clearing of payments are limited to amounts earned under the master agreement. The amounts payable under another agreement can only reduce the amount of early termination to the extent that they can be declared. The judgment also examines whether the contractual compensation scheme that was added to the master`s contract in this case was broad enough to permit a right to unsalted damages in order to reduce the amount of the early termination. The framework contract also helps to reduce litigation by providing significant resources that define its contractual terms and explain the intent of the contract, thus preventing litigation from beginning and providing a neutral resource for interpreting standard contractual terms.
