Common use of Limits on Claims Clause in Contracts

Limits on Claims. Rights to make any claim on the warranties under this clause 16 (a Claim) are limited as follows: (a) If either Rio Tinto or BHP Billiton makes a Claim it must give written notice of the Claim to the other (the Claim Recipient) (setting out in reasonable detail the nature of the Claim and the damages sought to the extent the amount can reasonably be determined) as soon as reasonably practicable after it becomes aware of the facts, matters or circumstances on which the Claim is based and in any event within two years of the JV Commencement Date. (b) No liability in respect of a Claim attaches to a Claim Recipient unless the aggregate amount of all Claims against it exceeds US$250 million. A Claim Recipient will be liable in respect of all such Claims and not merely the excess. A Claim Recipient will not be liable for any single Claim which is less than US$50 million and any single Claim less than US$50 million (not being one of a number of claims arising from substantially the same facts, matters or circumstances, which, in aggregate, exceed US$50 million) will be disregarded in calculating the aggregate amount of all Claims against a Claim Recipient. (c) For the purpose of paragraph (b), the amount of a Claim will be calculated before allowing for any reduction in present or future Tax, Tax rebate or Tax credit received or receivable by the party in relation to the Claim. (d) A Claim Recipient is not liable to the other party for any amount equal to any reduction in present or future Tax, Tax rebate or Tax credit received or receivable by it or by any of its Related Corporations in relation to the amount or matter the subject of the Claim. (e) The respective liabilities of Rio Tinto and BHP Billiton in respect of Claims brought by them against each other will be netted off so that only the net amount, if any, by which the aggregate liability of one Claim Recipient for Claims exceeds the aggregate liability of the other for Claims, will be paid by the relevant Claim Recipient to the other. No payment will be made in respect of any Claims prior to the expiration of the two year period referred to in paragraph (a). If one Claim Recipient’s liability for Claims pursuant to paragraph (b) exceeds US$250 million but the other’s liability for Claims is US$250 million or less, then for the purposes of determining the net amount payable by one Claim Recipient to the other under this paragraph (e), a Claim Recipient will be deemed to be liable to make payments to the other under paragraph (b) even if the aggregate amount of its liability under paragraph (b) is US$250 million or less. (f) Neither Rio Tinto nor BHP Billiton may make a Claim in respect of the amount of any Undisclosed Liabilities, which are to be borne in accordance with clause 13.

Limits on Claims. Rights to make any claim on the warranties under this clause 16 (a Claim) are limited as follows: (a) If either Rio Tinto or BHP Billiton makes The aggregate liability of each Vendor in respect of all Claims (including any costs and expenses payable by the Vendors in connection with such Claims) shall not exceed the amount of the portion of the Purchase Price actually received by such Vendor. (b) The amount of the liability of a Claim it must give Vendor in respect of a Loss sustained by a Group Company shall be prorated to the direct and/or indirect interest owned by said Vendor in such Group Company immediately prior to the Completion. (c) Specific written notice of any Claim shall be given in accordance with paragraphs (d) and (e) below by the Purchasers Representative to the Vendors Representative, as agent for the relevant Vendor, within the period of (x) 10 years from the Completion Date with respect to the representations and warranties set forth in Clause 9.1 and (y) 36 months from the Completion Date with respect to the representations and warranties set forth in Clause 9.2, and the Vendors shall cease to be under any liability to the Purchasers or otherwise in respect of all and any Claim(s) not so notified to the Vendors Representative. (d) The Purchasers Representative shall give notice in writing of any Claim to the other (the Claim Recipient) (setting out in reasonable detail the nature of the Claim and the damages sought to the extent the amount can reasonably be determined) Vendors Representative as soon as reasonably practicable after it becomes and, in any event, within 30 Business Days of the relevant Purchaser becoming aware of the facts, matters or circumstances on giving rise to such Claim (or when an action is required before a certain date subject to the Vendors forfeiting their rights, as soon as reasonably practicable prior to such date). (e) Such notice shall include such detail as is reasonably available to the relevant Purchaser at the time of the relevant facts and circumstances giving rise to the Claim, which of any Group Company or Purchaser has paid or suffered the Loss in respect of which the Claim is based brought, the relevant Purchaser’s bona fide estimate of any alleged Loss and in any event within two years the specific warranties or other provisions of the JV Commencement DateAgreement which are alleged to have been breached, as well as any other available supporting evidence as may reasonably be required to assess the merits of the Claim and the computation of the Refund or estimate of the Loss. The non-compliance by the Purchasers Representative with the provisions of paragraphs (d) and (e) shall not relieve the Vendors of any liability they may have to the Purchasers, unless and then only to the extent that such non-compliance results in the Vendors’ liability being increased. (bf) No liability in respect of a Claim attaches to a Claim Recipient unless the aggregate amount of all Claims against it exceeds US$250 million. A Claim Recipient will be liable in respect of all such Claims and not merely the excess. A Claim Recipient will The Vendors shall not be liable for any single Claim in respect of any liability which is less than US$50 million contingent unless and any single until such contingent liability becomes due and payable, provided that this paragraph shall not operate to avoid a Claim less than US$50 million (not being one made in respect of a number of claims arising contingent liability within the time limit specified in paragraph 10.2(c) and to obtain payment from substantially the same facts, matters or circumstances, which, Vendors under such Claim even if the liability becomes due and payable after the time limit specified in aggregate, exceed US$50 million) will be disregarded in calculating the aggregate amount of all Claims against a Claim Recipientparagraph 10.2(c). (cg) For The liability of the purpose Vendors in respect of paragraph (b), a Loss shall be based on the amount of the Loss actually and directly suffered by any Group Company, the Purchasers or their Affiliates, and shall be computed without regard to any multiple or valuation factor that may have been used in determining the portion of the Purchase Price allocated to each Company. (h) The amount of the liability of the Vendors in respect of a Claim will Loss shall be calculated before allowing grossed up with a view to holding the Purchasers or any Group Company harmless of the consequences of any Tax liability resulting for the Purchasers or any reduction in present or future Tax, Tax rebate or Tax credit received or receivable Group Company from the payment by the party in relation to Vendors of the related Claim. (di) A Claim Recipient is not liable to the other party for any The amount equal to any reduction in present or future Tax, Tax rebate or Tax credit received or receivable by it or by any of its Related Corporations in relation to the amount or matter the subject of the Claim. (e) The respective liabilities liability of Rio Tinto and BHP Billiton the Vendors in respect of Claims brought a Loss shall be reduced by them against each other will be netted off so that only any monetary gain (including, for the net amountavoidance of doubt, if any, by which the aggregate liability of one Claim Recipient for Claims exceeds the aggregate liability of the other for Claims, will be paid any Tax benefit) actually received by the Purchasers or any Group Company resulting from the relevant Claim Recipient to the other. No payment will be made in respect of any Claims prior to the expiration of the two year period referred to in paragraph (a). If one Claim Recipient’s liability for Claims pursuant to paragraph (b) exceeds US$250 million but the other’s liability for Claims is US$250 million or less, then for the purposes of determining the net amount payable by one Claim Recipient to the other under this paragraph (e), a Claim Recipient will be deemed to be liable to make payments to the other under paragraph (b) even if the aggregate amount of its liability under paragraph (b) is US$250 million or lessLoss. (f) Neither Rio Tinto nor BHP Billiton may make a Claim in respect of the amount of any Undisclosed Liabilities, which are to be borne in accordance with clause 13.