Common use of Penalties for Breach of Contract Clause in Contracts

Penalties for Breach of Contract. 11.1. Without prejudice to other remedies or powers that the Contract or the Applicable Laws and Provisions may establish in favor of the Grantor in the event of the failure to comply with obligations, the Grantor may demand that the Concessionaire pay a penalty in accordance with the provisions set forth in Annex 12. This power may be exercised without prejudice to the Grantor’s decision regarding whether or not to terminate the Contract in accordance with Clause 13. 11.2. The cases of noncompliance referred to in Clause 11.1 shall result in the obligation to pay the respective penalty, without the need for any prior notice. The payment thereof shall not release the Concessionaire from performing the respective obligation. 11.3. The payment of the penalties referred to in Clause 11.1 is subject to the following rules: a) Said payment shall be requested in writing by the Grantor from the Concessionaire, indicating the bank account in which it shall deposit the corresponding amount, which shall be done within ten (10) Days following reception of the request. Before said deadline, the Concessionaire may challenge the admissibility of the payment request, thus leading to a dispute to be settled in accordance with Clause 14. The deadline established in the first paragraph of this item for the payment of penalties shall be suspended in case of a challenge to the admissibility of the payment request by the Concessionaire. The calculation of the deadline shall recommence once the imposition of the penalty is ratified. b) If the dispute is settled in favor of the Grantor, whether through direct negotiations or by virtue of an arbitration award, or the term of ten (10) Days indicated in Item a) hereinabove elapses without any challenge by the Concessionaire to the payment requirement, it shall be understood that the obligation to pay the penalty is enforceable. In such case, the obligation to pay the penalty shall be complied with on the Day following the expiration of said term, or within three (3) Days after the Concessionaire is notified of the arbitration award, or within three (3) Days after the dispute is settled through direct negotiations, as applicable. c) In the event that the Concessionaire fails to comply with the penalty payment, the Grantor shall be entitled to request the execution of the respective guarantee.