Common use of Settlement Mechanism Clause in Contracts

Settlement Mechanism. 1. Each Party may refer to the Joint Committee any divergence in the application or interpretation of this Agreement. 2. The Joint Committee will deal with the divergence in accordance with Article 41(1)(c) and (d). 3. If either Party considers that the other Party has failed to fulfil any of its obligations under this Agreement it may take appropriate action. Before doing so, except in cases of special urgency, it shall present to the Joint Committee all the relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. 4. The Parties agree that for the purpose of the correct interpretation and practical application of this agreement the term "cases of special urgency" in paragraph 3 means a case of the material breach of the Agreement by one of the Parties. A material breach consists in: (i) repudiation of the agreement not sanctioned by the general rules of international law, or (ii) violation of an essential element of the Agreement, as described in Articles 1(1), 3(2) and 35. 5. In the selection of actions, priority must be given to those which least disturb the functioning of this Agreement. These actions shall be notified immediately to the other Party and shall be the subject of consultations within the Joint Committee if the other Party so requests.

Settlement Mechanism. 1. Each Party may refer to the Joint Committee any divergence in the application or interpretation of this Agreement. 2. The Joint Committee will deal with the divergence in accordance with Article 41(1)(c) and (d). 3. If either Party considers that the other Party has failed to fulfil any of its obligations under this Agreement it may take appropriate action. Before doing so, except in cases of special urgency, it shall present to the Joint Committee all the relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable accept­ able to the Parties. 4. The Parties agree that for the purpose of the correct interpretation and practical application of this agreement the term "‘cases of special urgency" ’ in paragraph 3 means a case of the material breach of the Agreement by one of the Parties. A material breach consists in: (i) repudiation of the agreement not sanctioned by the general rules of international law, or (ii) violation of an essential element of the Agreement, as described in Articles 1(1), 3(2) and 35. 5. In the selection of actions, priority must be given to those which least disturb the functioning of this Agreement. These actions shall be notified immediately to the other Party and shall be the subject of consultations within the Joint Committee if the other Party so requests.