Common use of Disruption Event Clause in Contracts

Disruption Event. 16.1. A Disruption Event is an event that either generally makes it impossible or makes it impossible for a party to the FX Transaction to: 16.1.1. convert one currency, the Affected Currency, into the other currency in the country of origin of that Affected Currency through customary channels, except where such impossibility is due solely to the failure by that party to comply with any law, rule or regulation (unless such law, rule or regulation is enacted after the trade date of the FX Transaction and it is impossible for such party, due to an event beyond the control of that party, to comply with such law, rule or regulation); 16.1.2. deliver: a) the non-Affected Currency from accounts inside the country of origin of the Affected Currency to accounts outside such country; or b) currency to a party that is a non-resident of such country; c) in each case, except where such impossibility is due solely to the failure by that party to comply with any law, rule or regulation (unless such law, rule or regulation is enacted after the trade date of the FX Transaction and it is impossible for such party, due to an event beyond the control of that party, to comply with such law, role or regulation); or d) obtain a sufficient amount of the Affected Currency in the country of origin of the Affected Currency in order for a party to perform fully its obligations under the FX Transaction, as a result of the general interbank exchange market in the country of origin of the Affected Currency becoming illiquid. 16.2. If we determine that a Disruption Event occurs or has occurred and is continuing in respect of an FX Transaction, the fall-back determination mechanism described in Paragraph 16.3 shall apply as an alternative basis for the settlement of that FX Transaction. 16.3. The fall-back determination mechanism in the case of an FX Transaction is that the party, whether you or us, that is obliged to pay the settlement amount will instead pay an alternative currency agreed between you and us (or failing that an amount in any of sterling, euros or US dollars as determined by us in our absolute discretion) equal to the quantity of the Affected Currency owed on the Settlement Date. The interest as set out in Paragraph 12 will be payable, if applicable, in the agreed currency.