The ISDA executive contract stipulates that in the event of an early termination of derivatives transactions, an ETA must be paid from one party to the other. After a delay event, the ETA is calculated by the non-failing party; The methodology is defined in section 6(e) of the captain`s contract. The framework agreement is intended to counter any argument that ETA is a sanction by stating in Section 6, point (e) v) that the parties agree that the amount covered in Section 6th is a reasonable estimate of the harm to be paid for the loss of negotiations and the loss of protection against future risks and not for a sanction. Although an extravagant amount to be paid in the event of a breach of the condition may still be a penalty, the amount was not extravagant in this case. The calculation would not necessarily have the effect of making the late company pay the non-defenest and the non-defenestus; they could be payable in both directions. The amount payable as ETA (and therefore the total value of the remaining benefit) would change with market fluctuations over the duration of the agreement. There could be nothing punishable in a provision that imposes acceleration in the event of a violation of an amount which, without breaches, would be due at a later date. The ISDA Masteragrement, published by the International Swaps and Derivatives Association, is the most widely used master service contract for otC derivatives transactions internationally. It is part of a documentary framework that aims to provide comprehensive and flexible documentation on OVER-the-counter derivatives. The framework consists of a master contract, a calendar, confirmations, definition brochures and credit support documentation.

In this case, Wockhardt attempted to challenge as sanctions the uniform provision of the agreement in the ISDA`s governing contract, which was described as “artificial”, and (ii) the termination and closure provisions. The court firmly dismissed both motions. These two aspects are essential to the operation of the ISDA steering contract. In particular, the single agreement provision – the 2002 Master Contract Use Guide describes Section 1 (c) as a “fundamental provision that is the basis for the finding of compensation” – was the creation of a one-time net amount to be paid by one party to another at the end of the relationship between the parties. This is especially important when one of the parties becomes insolvent. In this case, a solvent counterparty could be obliged to pay the sums due to the insolvent party, whereas in the event of insolvency, it would leave a right to insolvency on the sums due. The mastery agreement is the central document around which the rest of the ISDA documentation structure is cultivated.