globalCOAL SCoTA

Standard Coal Trading Agreement
PART 1: Agreement and Execution
This Standard Coal Trading Agreement is entered into as of [date] between:
[Name of company] having its [registered office/principal place of business] at [ ] (“Party A”); and
[Name of company] having its [registered office/principal place of business] at [ ] (“Party B”).
The Parties intend to enter into Transactions (as defined below) for the sale and purchase of Coal (as defined
below) that will be governed by this Agreement (as defined below).
IT IS AGREED AS FOLLOWS:
(a) This agreement consists of this Part 1, the terms and conditions set out in Part 2, and the Appendices
hereto (together, the “SCoTA”), and all Transactions agreed by the Parties hereunder (collectively with
the SCoTA, the “Agreement”).
(b) The Parties shall be legally bound by the terms of each Transaction from the moment they agree to
those terms (whether via the Market, orally or otherwise). The terms of any Transaction entered into
pursuant to this Agreement shall be recorded in a Transaction Summary, substantially in the form set
out in Appendix 5 to this Agreement.
(c) The Parties enter each Transaction (whether as Seller or as Buyer) in reliance upon the fact that all
Transactions and this SCoTA form a single agreement between the Parties and that the Parties would
not otherwise enter into such Transactions.
(d) This SCoTA may be executed in counterparts, each of which when executed and delivered shall
constitute an original of this SCoTA.
(e) For the purpose of clause 21.1 of this SCoTA:
Notices or communications to Party A with respect to this Agreement shall be given to it at the
following address:
[ ]
[ ]
[ ]
Notices or communications to Party B with respect to this Agreement shall be given to it at the
following address:
[ ]
[ ]
[ ]
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Standard Coal Trading Agreement (SCoTA) Version 8 - Effective 18:00 GMT on 18 March 2012
Copyright © by Global Coal Limited 2001 - 2012 page 1 of 42
Executed by Party A:
SIGNED for and on behalf of [name of company] a )

company incorporated in [ ] acting by ) ........................................................
[ ] [and [ ]] who in )
accordance with the laws of that territory [is/are] )
acting under the authority of that company ) ........................................................
)
)
DATE )
) ........................................................
Executed by Party B:
SIGNED for and on behalf of [name of company] a )

company incorporated in [ ] acting by ) ........................................................
[ ] [and [ ]] who in )
accordance with the laws of that territory [is/are] )
acting under the authority of that company ) ........................................................
)
)
)
DATE )
) ........................................................
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TABLE OF CONTENTS
1. Definitions .................................................................................................................................................. 4
2. Interpretation............................................................................................................................................ 12
3. Obligations ............................................................................................................................................... 12
4. Representations, Warranties and Undertakings...................................................................................... 13
5. Financial Settlement ................................................................................................................................ 14
6. Delivery .................................................................................................................................................... 14
7. Vessel Acceptance .................................................................................................................................. 14
8. Title and Risk ........................................................................................................................................... 15
9. Weighing/Sampling/Analysis ................................................................................................................... 16
10. Quality and Contamination ...................................................................................................................... 17
11. Rejection of the Shipment ....................................................................................................................... 18
12. Price and Payment .................................................................................................................................. 18
13. Failure to Deliver or Take Delivery .......................................................................................................... 20
14. Termination, Suspension and Illegality .................................................................................................... 20
15. Force Majeure.......................................................................................................................................... 23
16. Disputes ................................................................................................................................................... 24
17. Assignment or Novation .......................................................................................................................... 25
18. Agents ...................................................................................................................................................... 25
19. Confidentiality .......................................................................................................................................... 25
20. Exclusion of Certain Warranties and Conditions; Limitation of Liability; Entire Agreement .................... 26
21. Notices and Communication .................................................................................................................... 26
22. Waiver ...................................................................................................................................................... 27
23. Amendment ............................................................................................................................................. 27
24. Exclusion of Third Party Rights ............................................................................................................... 27
25. Governing Law......................................................................................................................................... 27
Appendix 1: Standard Close-Out Agreement for Coal [Insert reference number].......................................... 28
Appendix 2: Standard Financial Settlement Agreement for Coal [Insert reference number] .......................... 31
Appendix 3: Shipping Tolerance at Index (STI).............................................................................................. 33
Appendix 4: Form of Letter of Indemnity For Delivering Cargo Without Production of the Original Bill of Lading
................................................................................................................................................................. 34
Appendix 5: Form of Transaction Summary .................................................................................................... 36
Appendix 6: Agreement Elections ................................................................................................................... 37
Appendix 7: Form of Letter of Indemnity for Payment in the Absence of Original Documents ....................... 42
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PART 2: - Terms and Conditions
1. Definitions
In this Agreement the following terms shall have the meanings set out below:
“Accepting Party” means, in respect of a Shipment, the Party to whom a Vessel is nominated
pursuant to this Agreement by the Party Responsible for Carriage
“ACPRSU” is an acronym for Australia, Colombia, Poland, Russia, South Africa, United
States. The Parties may use each initial on its own or in any combination to signify
those countries
“Affected Party” has the meaning specified in clause 14.10
“Agreement” has the meaning specified in paragraph (a) of Part 1 of this Agreement
“Arrival Period” means, in relation to a Transaction where the Delivery Basis is CFR or CIF, the
period or periods specified as such in the Transaction Summary, each Arrival
Period being a calendar month
“Arrival Point” means, in relation to a Transaction where the Delivery Basis is CFR or CIF, the
point or points specified as such in the Transaction Summary
“Base Price” means, in relation to a Transaction, the price in USD per Metric Tonne specified
as such in the Transaction Summary
“Binding Results” means the analysis results by which the Parties shall be bound, being either those
contained in the Primary Analysis Certificate or, where any of the results
contained in the Primary Analysis Certificate are replaced pursuant to clause 9.5,
the results contained in the Referee Analysis Certificate
“Buyer” means, in relation to a Transaction, the Party specified as such in the Transaction
Summary
“Buyer Nomination means the number of days specified in the RSS
Days”
“Buyer’s Deficiency” has the meaning specified in clause 13.1.2
“Certificate of Origin” means the certificate issued or arranged for issue by Seller certifying the origin of
the Shipment
“Cancelling Day” means the last day of the spread of Laycan
“CFR” means “cost and freight” as defined by the Incoterms® 2010 Rules
“Challenging Party” has the meaning specified in clause 9.5
“CIF” means “cost, insurance and freight” as defined by the Incoterms® 2010 Rules
“Circle” has the meaning specified in clause 12.11
“Close-Out means an agreement substantially in the form set out in Appendix 1 (amended as
Agreement” necessary if the agreement is to cover more than one Delivery Period or Arrival
Period (as applicable) or if the Transaction concerned has a weekly Delivery
Period)
“Coal” means, in relation to a Transaction, coal of substantially uniform quality
throughout and suited for bulk sea transport to be sold by Seller and purchased by
Buyer, complying with the Specification applicable to the Transaction or which is
otherwise accepted by Buyer
“Contamination-Free” means free from synthetic fuels (synfuels) and substantially free from all
extraneous materials atypical of coal (including but not limited to mining debris,
bone, slate, iron, steel, petroleum coke (petcoke), earth, rock, pyrite, wood or
blasting wire) and, where the Origin is not Australia, pond fines.
“Contract for Carriage means a mutually acceptable broker’s fixture note or charter party, evidencing the
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of Shipment” date of agreement of the charter party and the Demurrage rate of the Vessel.
“Credit Rating” means in respect of an entity any of the following: (i) the long-term senior
unsecured unsupported by third party credit enhancement public debt rating; or
(ii) the debt issuer's credit rating; or (iii) the corporate credit rating given to the
entity, by Moody's, Standard & Poor's or Fitch
“Credit Support means any document which by its terms secures, guarantees or otherwise
Document” supports, or provides assurance in respect of, a Party’s obligations in respect of
one of more Transactions, including but not limited to:
(a) letters of credit;
(b) cash prepayments;
(c) corporate or bank guarantees;
(d) any other agreement or instrument agreed by the Parties to
constitute a Credit Support Document; and
(e) any document specified as such in Appendix 6 in respect of a Party,
in an amount and in such form as is satisfactory to the other Party (acting
reasonably)
“Credit Support means any third party who provides or is required to provide a Credit Support
Provider” Document on behalf of a Party and shall include any third party specified as such
in Appendix 6
“Cross Default means an amount in USD which may be agreed between the Parties and
Threshold” specified in Appendix 6 for the purposes of sub-paragraph (g) of the definition of
“Event of Default” in this clause 1
“DAP” means “delivered at place” as defined by the Incoterms® 2010 Rules
“DAT” means “delivered at terminal” as defined by the Incoterms® 2010 Rules
“Defaulting Party” has the meaning specified in clause 14.1
“Delivery Basis” means the Delivery Basis specified in the RSS
“Delivery Period” means, in relation to a Transaction where the Delivery Basis is FAS, FOB, DAP,
DAT or DES, the period or periods specified as such in the Transaction Summary,
each Delivery Period being a calendar month or, where Buyer and Seller so
agree, a week with a mutually agreed start date
“Delivery Point” means, in relation to a Transaction where the Delivery Basis is FAS, FOB, DAP,
DAT or DES, the point or points specified as such in the Transaction Summary
“Demurrage” means the financial compensation payable if time used in completing loading or
unloading (as the case may be) is greater than Laytime and payable for all such
excess time at a rate specified in the RSS or agreed between the Parties or,
failing agreement, the rate specified in or payable pursuant to the Contract for
Carriage of Shipment
“DES” means “delivered ex-ship” as defined by the Incoterms® 2000 Rules
“Despatch” means the amount payable, if any, for Laytime saved and being 50% of the
relevant Demurrage rate
“DWT” means deadweight tonnes measured in Metric Tonnes and basis summer salt
water
“Early Termination has the meaning specified in clause 14.1
Date”
“ETA” means estimated time of arrival
“Event of Default” means, with respect to a Party or, if applicable, any Credit Support Provider of
such Party, the occurrence of any one or more of the following events:
(a) failure by the Party to make, within the time allowed under this
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Agreement, any payment required in respect of a Transaction or
otherwise pursuant to this Agreement and that failure is not
remedied by the Party within three (3) Working Days of a Notice in
Writing being given; or
(b) the Party or any Credit Support Provider of the Party fails to
comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document and that failure is not remedied by the Party or
its Credit Support Provider within three (3) Working Days of a
Notice in Writing; or
(c) any Credit Support Document expires or terminates, is due to
expire or terminate within ten (10) Working Days or such other
period as is specified in Appendix 6, or fails or ceases to be in full
force and effect for the purpose of this Agreement (in each case
other than in accordance with its terms) prior to the satisfaction of
all obligations of the Party under each Transaction to which that
Credit Support Document relates without the written consent of
the other Party; or
(d) the Party or any Credit Support Provider of that Party disaffirms,
disclaims, repudiates or rejects, in whole or in part, or challenges
the validity of, that Credit Support Document or otherwise fails to
comply with or perform its obligations under or in respect of a
Credit Support Document and that failure is continuing after any
applicable grace period; or
(e) any representation or warranty made by the Party or any Credit
Support Provider of that Party herein proving to be false or
misleading in any material respect; or
(f) a material or substantial breach by the Party of its obligations
under this Agreement (other than obligations to make any
payment or obligations which are otherwise specifically expressed
in this Agreement to be an Event of Default and other than with
respect to a Party’s obligations to deliver or take delivery, the
exclusive remedy for which is provided in clause 13) and such
breach is not remedied by the Party within five (5) Working Days
of a Notice in Writing being given; or
(g) if “Cross Default” is elected in Appendix 6 as applying to the Party,
there occurs or exists:
(i) a default, event of default or other similar condition or event
(however described) in respect of the Party or any Credit
Support Provider of the Party under one or more agreements
or instruments relating to Indebtedness of any of them
(individually or collectively) in an aggregate amount of not
less than the Cross Default Threshold that has resulted in
that Indebtedness becoming due and payable under those
agreements or instruments before it would otherwise have
been due and payable; or
(ii) a default by that Party or that Credit Support Provider
(individually or collectively) in making one or more payments
on the due date for those purposes under those agreements
or instruments in an aggregate amount of not less than the
Cross Default Threshold (after giving effect to any applicable
notice requirement or grace period); or
(h) if “Default under a Specified Transaction” is elected in Appendix 6
as applying to the Party, the Party or any Credit Support Provider
of the Party:
(i) defaults under a Specified Transaction (as defined in
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Appendix 6) and, after giving effect to any applicable notice
requirement or grace period, there occurs a liquidation of, an
acceleration of obligations under, or an early termination of,
that Specified Transaction; or
(ii) defaults (a) in making any payment due on the last date for
that payment under the Specified Transaction, or (b) in
making any payment on early termination of a Specified
Transaction, after giving effect to any applicable notice
requirement or grace period; or
(i) the Party or any Credit Support Provider of the Party becomes the
subject of an Insolvency Event; or
(j) a Material Adverse Change occurs with respect to the Party or any
Credit Support Provider of the Party, and the Party fails, within five
(5) Working Days of a Notice in Writing being given by the other
Party, to provide, or increase the amount of, a Credit Support
Document, or to provide a Credit Support Document from an
alternative Credit Support Provider, as the case may be
“Expert” has the meaning specified in clause 16
“FAS” means “free alongside ship” as defined by the Incoterms® 2010 Rules
“Final Loading Date” means, in respect of a Transaction where the Delivery Basis is CFR or CIF, the
day specified as such in the applicable RSS
“Final Price” means the price per Metric Tonne of Coal determined in accordance with the
price provisions of the applicable RSS (or clause 10.2 and 10.3 if the Shipment
does not comply with the Specification)
“Financial Settlement means an agreement substantially in the form set out in Appendix 2 (amended as
Agreement” necessary if the agreement is to cover more than one Delivery Period or Arrival
Period (as applicable) or if the Transaction concerned has a weekly Delivery
Period)
“Fitch” means Fitch Ratings or any successor to its rating business
“FM Affected Party” has the meaning specified in clause 15.2
“FOB” means “free on board” as defined by the Incoterms® 2010 Rules
“Force Majeure” means (subject to clause 15.8) any event or circumstance:
(a) beyond the reasonable control of either Buyer or Seller which
wholly or partly prevents or delays such Party from performing its
obligations arising under this Agreement (apart from an obligation
to make any payment under this Agreement); and
(b) which cannot reasonably be overcome or avoided by such Party
exercising all reasonable skill, care and diligence.
In the event of Part-Cargoes, means any event or circumstance beyond the
reasonable control of either Buyer or Seller prior to the commencement of
loading or unloading (as applicable) which wholly or partly prevents or delays the
master of the Vessel from loading or unloading (as applicable) and which cannot
reasonably be overcome or avoided by the master exercising all reasonable skill,
care and diligence
“Free Pratique” means the relevant authorities at the Delivery Point or Arrival Point (as
applicable) being satisfied as to the state of health of those on board the Vessel
and thus granting “free pratique”
“GCVAR” means gross calorific value as received at constant volume reported in
kilocalories per kilogram (“kcal/kg”), and analysed according to the Standard
“globalCOAL” means Global Coal Limited
“GMT” means Greenwich Mean Time
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“ICC” means the International Chamber of Commerce
“Illegality” has the meaning specified in clause 14.10.2
“Incoterms® 2000 means the Incoterms® 2000 rules published by the ICC, where “Incoterms” is a
Rules” trademark of the ICC
“Incoterms® 2010 means the Incoterms® 2010 rules published by the ICC, where “Incoterms” is a
Rules” trademark of the ICC
“Indebtedness” means any obligation (whether present or future, contingent or otherwise, as
principal or surety or otherwise) in respect of borrowed money
“Insolvency Event” means, with respect to a Party or its Credit Support Provider, such Party or its
Credit Support Provider:
(a) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); or
(b) becomes insolvent or is unable to pay its debts or fails or admits in
writing its inability generally to pay its debts as they become due;
or
(c) makes a general assignment, arrangement or composition with or
for the benefit of its creditors; or
(d) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (i)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (ii) is not dismissed, discharged, stayed or restrained
in each case within thirty (30) days of the institution or
presentation thereof; or
(e) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation
or merger); or
(f) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or
other similar official for it or for all or substantially all its assets; or
(g) has a secured party take possession of all or substantially all its
assets, or has a distress, execution, attachment, sequestration or
other legal process levied, enforced or sued against all or
substantially all its assets, and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within thirty (30) days
thereafter; or
(h) causes or is subject to any event with respect to it which, under
the applicable laws of any jurisdiction, has an analogous effect to
any of the events specified in sub-paragraphs (a) to (g) above
(inclusive); or
(i) takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts referred to in this
definition of Insolvency Event
“ISO” means International Standards Organisation
“Laycan” means the period specified in the RSS during which the Vessel must arrive at the
load port
“Laytime” means the time allowed for loading or unloading (as applicable) of the Vessel at
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the Delivery Point or Arrival Point (as applicable) as determined in accordance
with the applicable RSS
“LIBOR” means in relation to any period the one (1) month London Inter-bank Offered
Rate for United States Dollars from time to time as quoted by Reuters at 11:00AM
(GMT) on the first day of such period or if no such rate is then quoted, on the next
succeeding day on which such rate is so quoted
“Local Rules” means any rules and regulations published by the relevant port authority and
applicable at the Delivery Point or Arrival Point (as applicable)
“Major Shipper” means, in the case of Part-Cargoes, the party at the Delivery Point or Arrival Point
(as applicable) expected to load or unload the largest tonnage onto or from any
given Vessel (unless otherwise agreed by the parties loading or unloading onto or
from said Vessel in which case the Major Shipper shall be the party so agreed)
“Market” means globalCOAL's web-based screen trading facility through which members
can buy and/or sell coal, coal-related instruments, products and services
“Material Adverse means, subject to any election made in Appendix 6 to amend this definition, a
Change” material adverse change in the financial standing or creditworthiness of a Party or
its Credit Support Provider, so that in the reasonable opinion of the other Party
(exercising good faith), the ability of the Party or its Credit Support Provider to
perform its obligations under this Agreement or any Credit Support Document
becomes materially impaired
“Metric Tonne” means 1,000 (one thousand) kilograms, which is equal to 2204.62 lbs (two
thousand two hundred and four point six two pounds)
“Moody's” means Moody's Investors Service, Inc. or any successor to its rating business
“NCV” means net calorific value at constant volume reported in kilocalories per kilogram
(“kcal/kg”), and analysed according to the Standard
“Non-Affected Party” has the meaning specified in clause 14.10
“Non-Defaulting Party” has the meaning specified in clause 14.1
“Non-FM Affected has the meaning specified in clause 15.2
Party”
“NOR” means the notice of readiness validly tendered by the master of the Vessel in
accordance with the RSS
“Notice in Writing” means notification in any form of tangible or electronic written or printed
communication
“Origin” means the country of origin of the Coal specified in the RSS
“P&I Club” means an insurance mutual providing protection and indemnity from third party
liabilities and expenses arising from owning or operating Vessels as principals on
terms similar to those insurance mutuals being members of the International
Group of P&I Clubs
“Part-Cargoes” means any situation where a Shipment is not the only cargo to be loaded or
unloaded onto or from the Vessel at the Delivery Point or Arrival Point (as
applicable)
“Party” means a party to this Agreement and “Parties” means both of them
“Party Responsible for means, in respect of a Shipment, the Party responsible for the procurement and
Carriage” nomination of a Vessel in accordance with the terms of this Agreement, and
specified as such in the applicable RSS
“Primary Analysis means the certificate issued by the Primary Laboratory certifying the results of the
Certificate” Primary Analysis and showing all Specifications required by the RSS
“Primary Analysis” means the sampling and analysis performed by the Primary Laboratory for all
Specifications required by the RSS in accordance with the relevant Standard at
the Delivery Point, or, where the Delivery Basis is CFR or CIF, the load port
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“Primary Laboratory” means an internationally recognised independent commercial laboratory
selected by mutual agreement of Buyer and Seller and appointed and paid for by
Seller, unless otherwise stated in the RSS
“Quantity” means, in relation to a Transaction, the number of Metric Tonnes per Delivery
Period or Arrival Period (as applicable), specified as such in the Transaction
Summary
“Referee Analysis means the certificate issued by the Referee Laboratory certifying the results of
Certificate” the analysis of the Referee Sample and showing only the values challenged
pursuant to clause 9.5
“Referee Laboratory” means an internationally recognised independent commercial laboratory which is
not the Primary Laboratory and which is selected by mutual agreement of Buyer
and Seller
“Referee Sample” means a sealed sample which is kept in a safe place by the Primary Laboratory
for at least ninety (90) days from the date of the Primary Analysis Certificate for
referee purposes
“Replacement Price” has the meaning specified in clause 13.1.1
“RSS” or “Relevant means the relevant standard specification pertaining to a Transaction, as elected
Standard by the Parties and incorporated by reference in the Transaction Summary
Specification”
“Sales Price” has the meaning specified in clause 13.1.2
“SCoTA” has the meaning specified in paragraph (a) of Part 1 of this Agreement
“Seller” means, in relation to a Transaction, the Party specified as such in the Transaction
Summary
“Seller Nomination means, where applicable, the number of days specified in the RSS
Days”
“Seller’s Account” means Seller’s nominated bank account as notified to Buyer
“Seller’s Deficiency” has the meaning specified in clause 13.1.1
“SHINC” means Sundays and holidays (applicable at the Delivery Point or Arrival Point (as
applicable)) included
“Shipment” means each shipment of Coal making up the Quantity delivered pursuant to a
Transaction and in accordance with this Agreement (the number of Shipments to
be determined by the Buyer unless the Seller is the Party Responsible for
Carriage, in either case acting reasonably)
“Shipping Tolerance” means the tolerance in the quantity of each Shipment of Coal, specified as such
in the RSS, subject always to the rules and regulations applicable at the load port
the benefit of which (save as otherwise provided in the applicable RSS) is
exercisable by the master of the Vessel
“Shipping Tolerance at means the mechanism prescribed in Appendix 3 of this Agreement for pricing the
Index (STI)” Shipping Tolerance. Parties wishing to incorporate STI/Appendix 3 into any
Transaction hereunder should indicate their agreement to do so in the
Transaction Summary
“Specification” means the specification specified as such in the applicable RSS
“Spot Basis” means, unless defined by the Local Rules, the treatment of Vessels in rotation
without prejudice to any vessel(s) arriving within any agreed period for such
vessel(s), subject always to the approval of the relevant port authority at the
Delivery Point or Arrival Point (as applicable)
“Standard” means the standards of the International Standards Organisation (ISO) as
amended from time to time
“Standard & Poor's” means Standard & Poor's Rating Services, a division of The McGraw-Hill
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Companies, Inc or any successor to its rating business
“Statement of Facts” means a statement signed by the Vessel's master and/or charterers and/or Seller
and/or Buyer or their agents covering dates and times of arrival, the tendering
and acceptance of the NOR, with the times and dates of cargo working showing
any stoppage or other relevant events
“Sublot Analysis” means, if applicable under the relevant RSS, the sampling and analysis
performed by the Primary Laboratory per barge or cargo sublot for the net calorific
value as received in accordance with the relevant Standard at the Delivery Point,
or, where the Delivery Basis is CFR or CIF, the load port
“Sublot Analysis means, if applicable under the relevant RSS, the certificates issued by the
Certificate” Primary Laboratory certifying the results of the Sublot Analysis and showing the
net calorific value as received by barge or cargo sublot
“Sublot Analysis means, if applicable under the relevant RSS, the calorific value analysis results
Binding Result” by which Parties shall be bound, being either those contained in the Sublot
Analysis Certificates or, where any of the results contained in the Sublot Analysis
Certificate are replaced pursuant to clause 9.5, the results contained in the
Referee Analysis Certificates
“Termination Amount” has the meaning specified in clause 14.1
“Transaction” means each transaction entered into by the Parties under this Agreement for the
sale and purchase of Coal
“Transaction has the meaning specified in clause 14.3
Settlement”
“Transaction in relation to a Transaction, means the summary of the commercial terms for that
Summary” Transaction substantially in the form of Appendix 5 or otherwise containing the
information set out in Appendix 5, incorporating by reference this Agreement
“Turntime” means the grace period specified in the applicable RSS
“USD” means United States Dollars
“Vessel” means, in respect of a Shipment, the vessel procured and nominated by the Party
Responsible for Carriage
“Weight Certificate” means the certificate issued by the independent marine surveyor (or, where the
Shipment will be mixed in a stockpile prior to loading with other coal not forming
part of the Shipment, the relevant freight rail company) certifying the weight of
each Shipment
“Working Day” means any day (other than Saturday and Sunday) on which banks in the
countries of both Parties are generally open for business
“WWD” means a working day or a part of a working day at the Delivery Point, or Arrival
Point (as applicable) during which it is or, if the Vessel is still waiting for her turn, it
would be, possible to load or unload (as applicable) a Shipment without being
hindered by bad weather
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2. Interpretation
2.1 All terms defined in this Agreement shall have the defined meanings when used in any notice,
certificate, report or other document made or delivered pursuant to or in connection with this
Agreement, unless the context otherwise requires.
2.2 Reference in this Agreement to:
(a) Part 2 of this Agreement shall be to the terms and conditions of this Agreement comprised in
clauses 1 - 25 inclusive;
(b) Clauses shall be interpreted as references to clauses in Part 2 of this Agreement;
(c) Appendices shall be interpreted as references to Appendices 1 - 7 inclusive to this Agreement.
2.3 Headings and sub-headings shall not affect the construction or interpretation of this Agreement.
2.4 Unless the context otherwise requires, the singular shall include the plural and vice versa and any
word or words herein defined in the singular shall have a corresponding meaning if used in the plural
and vice versa.
2.5 Save as expressly provided in this Agreement, reference to any statute shall include reference to any
modification of it or any statutory provision substituted for it or any regulation, rule, by-law, order in
council or proclamation made thereunder or pursuant to it.
2.6 References to a Party include that Party’s successors and permitted assigns.
2.7 In the event of conflict between:
(a) a Transaction Summary and this SCoTA, the Transaction Summary shall prevail;
(b) this SCoTA and a Relevant Standard Specification, the Relevant Standard Specification shall
prevail;
(c) this Agreement and the Incoterms® 2000 Rules or the Incoterms® 2010 Rules, this Agreement
shall prevail;
(d) a Transaction Summary and a Relevant Standard Specification, the Transaction Summary shall
prevail.
2.8 For the avoidance of doubt:
(a) Appendices 1, 2, 4, 5 and 7 to this Agreement are attached by way of guidance for the Parties
only; and
(b) Appendices 3 and 6 to this Agreement contain optional provisions which only apply when
specifically elected by the Parties.
3. Obligations
3.1 In relation to each Transaction:
(a) Seller agrees to sell and deliver to Buyer; and
(b) Buyer agrees to purchase and take delivery from Seller,
of each Shipment in accordance with the terms and conditions set out in this Agreement and the
applicable RSS.
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3.2 The Parties shall agree and specify in Appendix 6 (and, where applicable any Transaction Summary)
any Credit Support Document required between them, but without prejudice to the Parties’ rights to
require the provision or increase of a Credit Support Document pursuant to sub-paragraph (j) of the
Event of Default definition (if applicable).
3.3 If Seller is purchasing the Shipment from, or Buyer is itself selling the Shipment to, any third party,
Seller or Buyer (as the case may be) undertakes to pass on to such third party any communication
given to it in accordance with this Agreement as expeditiously as possible and in any event on the day
of receipt unless such communication is received after 4pm local time in which case said
communication shall be forwarded by 10am local time on the next day (other than Saturday and
Sunday) on which local banks are generally open for business.
3.4 Local Rules shall be adhered to by Buyer and Seller in the performance of this Agreement. If and to the
extent that a conflict arises between this Agreement and any Local Rules, the latter shall take
precedence.
3.5 Time shall be of the essence for the purposes of this Agreement.
4. Representations, Warranties and Undertakings
4.1 On the date of this Agreement and each Transaction (and while any or all of the obligations required to
be performed by it remain to be performed) each Party represents, warrants and undertakes to the
other that:
4.1.1 the entry into and performance of this Agreement and each Transaction has been duly
authorised by all necessary corporate or other organisational actions on its part and do not
violate or conflict with any relevant sanctions, law, statute, rule, regulation or judgment to
which it is subject; and
4.1.2 it is entering into the Agreement and each Transaction as principal and is acting for its own
account; and
4.1.3 save for the representations and warranties made in this clause 4, it has not entered into this
Agreement or the Transaction in reliance on any warranty or representation made by the other
Party or its employees or agents.
4.2 On the date of each Transaction under this Agreement, each Party represents, warrants and
undertakes to the other that:
4.2.1 it has procured any and all necessary governmental and other third party permits, approvals
and licenses required to be procured by it in connection with the execution, delivery and
performance of the Transaction;
4.2.2 it has complied and shall continue to comply with all applicable Anti-Corruption Laws (as
defined below) and has not improperly given, offered, received or agreed to accept, nor will it
give or offer to give, receive, or agree to accept, any payment, gift or other advantage which
violates applicable Anti-Corruption Laws. “Anti-Corruption Laws” means the anti-corruption
and anti-bribery laws of the United Kingdom (including, without limitation, the Bribery Act
2010), the United States of America (including, without limitation, the Foreign Corrupt
Practices Act 1977), Australia (including, without limitation, Chapter 4 Division 70 of the
Criminal Code Act 1995 (Cth)) and any other country in which business will be conducted; and
4.2.3 any Vessel which it nominates in respect of the Transaction shall, at the time of the nomination
be entered with a P&I Club.
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5. Financial Settlement
5.1 Subject to any election made in Appendix 6 to exclude the operation of this clause, in relation to any
Transaction, the Parties may mutually agree to settle their obligations in respect of part or all of the
Quantity in a given Delivery Period or Arrival Period (as applicable) by financial means provided both
Parties agree to do so and enter into a Financial Settlement Agreement in the form of Appendix 2 by
no later than forty-five (45) days unless otherwise agreed prior to the commencement of the Delivery
Period or Arrival Period (as applicable).
6. Delivery
6.1 Each Party’s rights and obligations in relation to a Transaction shall be in accordance with the
Incoterms® 2000 Rules or the Incoterms® 2010 Rules, as applicable to the relevant Delivery Basis as
defined in clause 1, unless otherwise provided in the Transaction Summary or elsewhere in this
Agreement.
6.2 The master of the Vessel shall have the right to refuse to accept for loading all or any Coal which, in the
reasonable opinion of the master of the Vessel, constitutes a risk to the safety of the Vessel or crew.
6.3 Where Buyer pays any costs attributable to Seller (as determined by reference to the Incoterms® 2000
Rules or the Incoterms® 2010 Rules, as the case may be depending on the relevant Delivery Basis),
such costs shall be converted to USD at the relevant exchange rate published in the Financial Times
on the bill of lading date or the nearest Working Day and may be deducted from payment due. Where
Seller pays any costs attributable to Buyer, the same shall apply save that such costs shall be added to
payment due.
7. Vessel Acceptance
7.1 If elected by the Parties in Appendix 6, the Parties shall comply with the vessel assessment system
provisions set out in Appendix 6.
7.2 Where the relevant government, local or port authorities at the Delivery Point or Arrival Point (as
applicable) reject a Vessel pursuant to the rules and regulations according to which they are required
to operate, any notice of such rejection shall be deemed to have been given to the Party Responsible
for Carriage. Notwithstanding anything to the contrary expressed or implied in this Agreement, the
Party to whom a Vessel is nominated (the “Accepting Party”) shall not be liable for the consequences
of the Vessel being rejected by such authorities. The Accepting Party may not unreasonably withhold
acceptance of a Vessel and may only reject the Vessel by Notice in Writing to be received by the Party
Responsible for Carriage within two (2) Working Days of nomination pursuant to the relevant
Nomination paragraphs set out in the applicable RSS. If such Notice in Writing to reject the Vessel is
not received by the Party Responsible for Carriage within two (2) Working Days of nomination
pursuant to the relevant Nominations paragraphs set out in the applicable RSS, then the nomination
will be deemed to be accepted. If a Vessel nomination is due to be made on a day which is not a
Working Day then the Vessel nomination will be made on the last prior Working Day.
7.3 Subject to paragraph 7.4, a Party shall be entitled to reject the nomination of a Vessel if:
7.3.1 the Vessel is named or its IMO number is on the list of Special Designated Nationals and
Blocked Persons (the “SDN List”) as published and amended from time to time by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”) or any equivalent list
maintained by the United States (including the US Department of Commerce, the US Treasury
Department or the US State Department), the United Nations, the United Kingdom, the
European Union, Australia, or Switzerland (a “Relevant Authority”); or
7.3.2 without limitation to paragraph 7.3.3, the Vessel’s registered owner is named on the SDN List
or any equivalent list maintained by a Relevant Authority; or
7.3.3 the Vessel is owned, chartered, operated, controlled (directly or indirectly), or insured by any
person or entity named on the SDN List or any equivalent list maintained by a Relevant
Authority; or
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7.3.4 the Vessel is flagged or registered by a country that is subject to the U.S. sanctions laws
administered by OFAC from time to time (the “U.S. Sanctions”) and acceptance of the Vessel
nomination would constitute a violation of US Sanctions; or
7.3.5 the Vessel is owned, chartered, operated, controlled (directly or indirectly), or insured by a
person or entity that is registered, constituted or organised in, or that is a citizen or resident of
or located in, a country that is subject to the US Sanctions and acceptance of the Vessel
nomination would constitute a violation of US Sanctions; or
7.3.6 acceptance of the Vessel by the Accepting Party would constitute a violation of any sanctions
laws of a Relevant Authority or, without limitation to clauses 7.3.1 to 7.3.5 inclusive, the United
States of America, by the Accepting Party, as if it were subject to such sanctions laws, all as
amended from time to time; or
7.3.7 the destination of the Vessel is a port in Cuba, Iran, Sudan, Myanmar (Burma) or North Korea,
or any other country that becomes the target of U.S. sanctions laws, for as long as those
countries are the target of U.S. sanctions laws administered by OFAC or any other Relevant
Authority; or
7.3.8 acceptance of the Vessel by the Accepting Party or performance of its obligations under the
Transaction would cause it to act in a manner which is prohibited under any law or regulation
applicable to such Party which relates to foreign trade controls, export controls, embargoes or
international boycotts.
7.4 In the event the Accepting Party rejects a Vessel pursuant to clause 7.3 above, such rejection notice
shall be given to the Party Responsible for Carriage in accordance with the relevant provisions of
clause 7.2. In addition to the requirements of clause 21, any notice of rejection given by the Accepting
Party pursuant to clause 7.2shall identify which of the above grounds of rejection are being relied
upon. Additionally, in the case of reliance on clause 7.3.2, 7.3.3, 7.3.4 or 7.3.5, the person or entity
targeted by sanctions and said to be connected with the Vessel in the relevant sense shall be identified
in the notice of rejection. In the case of reliance on sub-clauses 7.3.6, 7.3.7 or 7.3.8, the relevant
sanctions, law, regulation, rule or requirement shall be identified in the notice of rejection together with
an explanation as to why acceptance of the Vessel would constitute a violation of the foregoing by the
Accepting Party.
7.5 For the avoidance of doubt, the service of a notice of rejection pursuant to clause 7.3 does not of itself
entitle the rejecting Party to treat the Transaction as terminated and will not constitute a breach of the
Transaction. If a valid notice of rejection is served, the Party Responsible for Carriage shall nominate a
substitute vessel within two (2) Working Days of receipt of the rejection notice without prejudice to the
other terms and provisions of this Agreement which shall remain unaffected, including but not limited
to the Delivery Period or Arrival Period (as applicable) and Seller and Buyer Nomination Days. Such
substitute Vessel shall be subject to the Accepting Party’s approval in accordance with clause 7.3.
8. Title and Risk
8.1 It shall be a condition that at the time of delivery, the Seller will have good title to the Shipment and a
condition that Seller will deliver or procure delivery of the Shipment to Buyer free and clear of all liens,
claims and encumbrances.
8.2 Title and all risk of loss or damage to the Shipment shall pass to Buyer:
8.2.1 where the Delivery Basis is FOB, when the Shipment is placed on board the Vessel at the
Delivery Point;
8.2.2 where the Delivery Basis is DAP or DES, when the Shipment is placed at the disposal of the
Buyer ready for unloading at the Delivery Point;
8.2.3 where the Delivery Basis is DAT, when the Shipment has been unloaded by the Seller and
placed at the disposal of the Buyer at the Delivery Point;
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8.2.4 where the Delivery Basis is FAS, when the Shipment is placed alongside the Vessel at the
disposal of the Buyer ready for loading at the Delivery Point;
8.2.5 where the Delivery Basis is CFR or CIF, when the Shipment is placed on board the Vessel at
the load port.
9. Weighing/Sampling/Analysis
9.1 A draught (or equivalent gauge) survey of the Shipment shall be performed at the Delivery Point, or,
where the Delivery Basis is CFR or CIF, the load port, by an independent marine surveyor selected by
mutual agreement of Buyer and Seller (or in default of agreement Seller may appoint an independent
marine surveyor from one of the laboratories listed on the globalCOAL website,
http://www.globalcoal.com) appointed by and paid for by Seller. Any draught survey shall be
performed according to the methodology typically used for coal at the Delivery Point, or, where the
Delivery Basis is CFR or CIF, the load port, and all liquid densities for the calculation of weight shall be
“weight in air”. The surveyor shall issue a Weight Certificate, which shall be final and binding on the
Parties, except in the case of fraud or manifest error.
9.2 The conformity of each Shipment with the Specification shall be assessed by the Primary Laboratory
by analysis of a sample or samples to be taken during loading or unloading (as applicable) in
accordance with the Standard at the Delivery Point, or, where the Delivery Basis is CFR or CIF, the
load port, by the Primary Laboratory using, where available, a mechanical sampler.
9.3 Each sample taken by the Primary Laboratory shall be split into parts as follows:
9.3.1 one to be forwarded for Primary Analysis;
9.3.2 one to be kept as a Referee Sample; and
9.3.3 where Buyer has so requested in advance by Notice in Writing, one which shall be forwarded
to Buyer at Buyer’s expense.
9.4 Seller shall procure that the Primary Laboratory shall issue to Buyer and Seller a Primary Analysis
Certificate or Sublot Analysis Certificate (as applicable) not later than five (5) Working Days after
sampling, or in the case of Shipments from Australia not later than three (3) Working Days after
sampling.
9.5 Within five (5) Working Days of receipt of the Primary Analysis Certificate or the Sublot Analysis
Certificate, either Party (the “Challenging Party”) may, by Notice in Writing to the other, challenge any
value contained in the Primary Analysis Certificate or the Sublot Analysis Certificate and elect that the
Referee Sample be submitted to the Referee Laboratory for prompt issuance of a Referee Analysis
Certificate showing such values as are disputed by the Challenging Party. Any value shown in the
Primary Analysis Certificate or Sublot Analysis Certificate which is not so challenged shall become a
Binding Result. If the difference between the result of the Primary Analysis Certificate or Sublot
Analysis Certificate and the Referee Analysis Certificate:
9.5.1 is not within the tolerances allowed by the Standard, the result of the Referee Analysis
Certificate shall become the Binding Result; or
9.5.2 is within the tolerances allowed by the Standard, the result of the Primary Analysis Certificate
or Sublot Analysis Certificate shall become the Binding Result.
9.6 The cost of the Referee Laboratory shall be borne by the Challenging Party.
9.7 At its expense, Buyer or Seller has the right to have a representative present at the Delivery Point, or,
where the Delivery Basis is CFR or CIF, the load port, to observe the weighing and sampling of the
Shipment.
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10. Quality and Contamination
10.1 In the event that a Shipment is not Contamination-Free, Buyer shall not be entitled to reject the
Shipment but Seller shall reimburse to Buyer all reasonably incurred direct expenses arising from the
removal of the extraneous material from the Shipment in order to render it Contamination-Free. Direct
expenses shall also include the cost to repair any damage caused to any Coal conveyance or Vessel
by the carriage of Coal that is not Contamination-Free. For the purposes of this clause 10.1 direct
expenses shall be treated as reasonably incurred if Buyer has acted in good faith and has used
reasonable endeavours to mitigate such expenses.
10.2 If the Binding Results show that the Shipment does not comply with the Specification, the Parties shall
use all reasonable endeavours to mutually agree in good faith a fair and reasonable adjustment to the
Base Price for the purposes of determining the Final Price in relation to the Shipment.
10.3 Where the Parties are unable to agree an adjustment in accordance with clause 10.2 within three (3)
Working Days of determination of the Binding Results or if the Shipment cannot reasonably be
de-contaminated under clause 10.1, the Buyer shall notify Seller by Notice in Writing within five (5)
Working Days of determination of the Binding Results whether it wishes to reject or accept the
Shipment, as follows:
10.3.1 to reject the Shipment provided that Buyer shall have no right to reject the Shipment where
Buyer has elected to load or unload (as the case may be) the Shipment, such that it becomes
mixed with coal not forming part of the Shipment and cannot readily be discerned from such
coal; or
10.3.2 to accept the Shipment, in which case adjustment of the price shall be referred to an Expert in
accordance with clause 16, who shall determine the Final Price.
10.3.3 for the avoidance of doubt, the Buyer cannot reject or accept part of the Shipment only in
accordance with this clause 10.3. Notwithstanding the foregoing, if part of the Shipment has
become mixed with coal not forming part of the Shipment and cannot readily be discerned
from such coal, or if part of the Shipment has been consumed, (“Mixed Or Utilised Coal”) and
the Binding Results for the Shipment show that the Shipment is capable of rejection then the
Mixed Or Utilised Coal shall be financially settled as per clause 10.2 and the remainder of the
Shipment may be rejected.
10.4 After the Vessel has loaded or unloaded (as applicable) at the Delivery Point or, where the Delivery
Basis is CFR or CIF, the load port, Seller shall at its expense, promptly after request by Notice in
Writing from Buyer, supply to Buyer the following information in accordance with the Standard and
which shall be representative of the Shipment as a whole:
10.4.1 inherent moisture (air dried basis);
10.4.2 hydrogen (dry basis);
10.4.3 nitrogen (dry basis);
10.4.4 chlorine (dry basis);
10.4.5 boron (dry basis);
10.4.6 fluorine (dry basis);
10.4.7 ash fusibility test (deformation, hemisphere and flow temperatures) under a reducing
atmosphere; and
10.4.8 full ash analysis (dry basis).
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11. Rejection of the Shipment
11.1 If Buyer rejects a Shipment pursuant to clause 10.3.1:
11.1.1 Buyer shall not be liable to make payment for such Shipment;
11.1.2 if Buyer has already paid for the Shipment, Seller shall refund the amount paid within three (3)
Working Days upon receipt of a Notice in Writing of rejection by Buyer;
11.1.3 title to and risk in the Shipment shall revert to Seller on rejection (or if Buyer has paid, risk shall
revert on rejection and title shall revert upon refund of the purchase price to Buyer by Seller);
11.1.4 disposal of the Shipment shall be for Seller’s account; and
11.1.5 a Seller's Deficiency shall be deemed to have occurred and the provisions of clause 13.1 shall
apply.
12. Price and Payment
12.1 All payments due in respect of Transactions or otherwise pursuant to this Agreement shall be paid in
USD, unless otherwise agreed.
12.2 The amount payable by Buyer for a Shipment shall be the Final Price multiplied by the weight of the
Shipment (as determined in accordance with the price provisions of the applicable RSS).
12.3 Upon receipt of the Primary Analysis Certificate, Seller shall issue a signed commercial invoice (or a
signed provisional invoice if Seller reasonably considers it is not feasible to submit a signed
commercial invoice) for the amount payable for the Shipment (calculated in accordance with clause
12.2) showing the basis on which the amount payable for the Shipment has been calculated. If Seller
issues a signed provisional invoice the published relevant index price for the week prior to the latest bill
of lading date (or, where the Delivery Basis is DAP, DAT or DES, the week prior to completion of cargo
discharge in accordance with the Statement of Facts) shall be used as a basis price unless agreed
otherwise. The signed provisional invoice shall be amended by issuance of a signed commercial
invoice by the Seller no later than ten (10) Working Days after the publication of the relevant index
reflecting the original amount paid by the Buyer and the net amount owing or due to the Buyer as a
result of the difference between the original amount and the final index price amount unless otherwise
agreed. Any reconciliation payment must be made within three (3) Working Days following Buyer’s
receipt of the signed commercial invoice.
12.4 If either Party rejects the Primary Analysis Certificate and elects that the Referee Sample be submitted
for analysis pursuant to clause 9.5, Seller’s invoice issued in accordance with clause 12.3 shall remain
valid. However, if the Referee Analysis Certificate contains values that become Binding Results
pursuant to clause 9.5, Seller shall issue a further invoice or a credit note (as appropriate) to account
for any difference between the amount of the invoice issued pursuant to clause 12.3 and the amount
payable for the Shipment based upon the Final Price calculated in accordance with the relevant
provisions of the applicable RSS but using the results of any Binding Results arising from the Referee
Analysis Certificate. Nothing in this clause 12.4 shall affect Buyer’s rights of rejection pursuant to
clause 10.3.
12.5 Subject to clause 12.10, Buyer shall make payment to Seller’s Account on or before the fifth (5th)
Working Day following receipt by Buyer of the following documents (either the original documents or
facsimile or electronically transmitted copies thereof, whichever is first received by Buyer):
12.5.1 Seller’s signed commercial invoice or signed provisional invoice prepared in accordance with
clause 12.3;
12.5.2 A full set of clean on board bills of lading showing the quantity of each parcel making up the
Shipment (three originals and three non-negotiable copies to be processed in accordance with
clause 12.6);
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12.5.3 Weight Certificate (one original and one copy to be processed in accordance with clause
12.6);
12.5.4 Certificate of Origin (one original and one copy to be processed in accordance with clause
12.6);
12.5.5 Primary Analysis Certificate or Sublot Analysis Certificate signed and issued by the Primary
Laboratory pursuant to clause 9.4 (one original and one copy to be processed in accordance
with clause 12.6).
12.6 Seller shall courier the original documents and copies thereof referred to in clause 12.5 directly to
Buyer (or, where Buyer has on-sold the Shipment, the Seller may (in its absolute discretion) courier
such original documents and copies to the party specified by Buyer to Seller by Notice in Writing)
within five (5) days of the relevant document being received by Seller.
12.7 If a Party in good faith disputes the accuracy of any invoice, it shall make payment of any undisputed
amount on or before the due date and shall give Notice in Writing of the amount and reasons for the
dispute to the other Party. The Parties shall seek to settle the disputed amount as soon as reasonably
possible. Any payment agreed as a result of the resolution of such dispute shall be made within three
(3) Working Days of such resolution.
12.8 Any delay by Buyer in making any payment due under this Agreement by the due date shall result in
interest at a rate of LIBOR plus two percent (2.0%) being applied to any outstanding amount until such
amount, together with applicable interest, is received by Seller.
12.9 In the event that the Parties have indicated in the Transaction Summary that they have mutually
agreed to settle Shipping Tolerance at Index, then the provisions of Appendix 3 shall apply.
12.10 Subject to any election made in Appendix 6 to exclude the operation of this clause, if on any given date
the Parties are required to make payments to one another in respect of more than one Transaction
under this Agreement, then all payments owing by one Party to the other shall be aggregated and the
Party owing the greater aggregated amount, if any, shall pay to the other Party the difference between
the amounts owed. Each Party reserves to itself all rights, setoffs, counterclaims and other remedies
which such Party has or may be entitled to arising from or out of this Agreement, whether by operation
of law or otherwise.
12.11 Subject to any election made in Appendix 6 to exclude the operation of this clause, if it is found that any
Shipment forms part of a series of shipments in any given Delivery Period or Arrival Period (as
applicable) which can be shown by any party to form a continuous circle of such shipments (a
“Circle”), the Parties hereby express willingness to consider entering into a Close-Out Agreement
provided always that each party in the Circle has given or gives a similar undertaking, it being always
understood that each Party hereto retains all rights to decline to enter into a Close-Out Agreement in
its sole discretion and without any obligation to give any reasons for its action. Any such Close-Out
Agreement shall be agreed and executed no later than fifteen (15) days prior to the first day of the
Delivery Period or Arrival Period (as applicable) to which the Close-Out Agreement relates. The
Parties may mutually agree to submit details of their current Transactions (or other transactions which
may form part of a Circle) on a monthly basis to globalCOAL via e-mail to frontoffice@globalcoal.com
in order that globalCOAL may examine the current Transactions of all Parties internally and identify
any Circle which may potentially be subject to a Close Out Agreement.
12.12 In the event that any of the documents referred to in clause 12.5 are not available for presentation to
the Buyer on or before the date payment is due in accordance with the payment provisions of this
Agreement, Buyer and Seller may mutually agree for Buyer to make payment to Seller upon
presentation to the Buyer of:
12.12.1 the Seller’s invoice (or provisional invoice if the provisions of clause 12.3 apply); and
12.12.2 the Seller’s letter of indemnity counter-signed, if so requested by the Buyer, by a first class
international bank acceptable to the Buyer, substantially in the format set out in Appendix 7.
The Seller’s indemnity presented in the form of a fax or PDF file e-mail attachment is
acceptable.
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13. Failure to Deliver or Take Delivery
13.1 In the absence of agreement to the contrary:
13.1.1 Unless excused by Buyer’s failure to perform, if Seller fails to deliver all or part of the Quantity
pursuant to a Transaction in accordance with this Agreement (a “Seller’s Deficiency”), Seller
shall pay Buyer, an amount for each tonne of the Seller’s Deficiency equal to the positive
difference, if any, obtained by subtracting the Base Price from the Replacement Price, plus
any additional direct costs or expenses reasonably incurred by Buyer, including without
limitation additional transport charges, if any. “Replacement Price” means the price at which
Buyer, in view of its obligation to take any and all reasonable steps to mitigate its losses and
always acting in a commercially reasonable manner, purchases substitute Coal in an amount
and quality and on the same Delivery Basis equivalent to the Seller’s Deficiency or, absent a
purchase, the market price for such quantity and quality of Coal, on the same Delivery Basis at
such Delivery Point, as determined by Buyer in a commercially reasonable manner.
13.1.2 Unless excused by Seller’s failure to perform, if Buyer fails to take delivery of all or part of the
Quantity pursuant to a Transaction in accordance with this Agreement (a “Buyer’s
Deficiency”), Buyer shall pay Seller, an amount for each tonne of the Buyer’s Deficiency equal
to the positive difference, if any, obtained by subtracting the Sales Price from the Base Price,
plus any additional direct costs or expenses reasonably incurred by Seller, including without
limitation additional transport charges, if any. “Sales Price” means the price at which Seller, in
view of its obligation to take any and all reasonable steps to mitigate its losses and always act
in a commercially reasonable manner, resells (if at all) the Buyer’s Deficiency, or, absent a
resale, an amount equal to the market price for such quantity and quality of Coal and on the
same Delivery Basis at such Delivery Point as determined by Seller in a commercially
reasonable manner.
13.1.3 The provisions of this clause 13.1 shall not apply to the extent that the failure of Buyer or Seller
to comply with this Agreement is caused by Force Majeure.
13.1.4 The provisions of this clause 13.1 shall be the sole and exclusive remedy of the aggrieved
Party for failure to deliver or take delivery (as the case may be) and all other damages and
remedies are hereby waived in respect of such failure. The Parties acknowledge and agree
that payments made pursuant to clause 13.1 shall be payable by way of liquidated damages
and that the same constitute a genuine and reasonable pre-estimate of losses incurred by the
aggrieved Party.
13.2 For the purposes of clause 13.1, a Party may only take the benefit of a Shipping Tolerance to the
extent that the master of the Vessel concerned has taken the benefit thereof and declared the extent to
which it has done so at the time of, or as soon as reasonably practicable after loading, or as otherwise
provided in the applicable RSS.
13.3 All payments due under clause 13.1 shall be paid within five (5) Working Days of receipt of an invoice
in respect of the same.
13.4 The provisions of this clause 13 shall not apply to Transactions where the Delivery Basis is CFR or
CIF, which shall instead be governed by the provisions of the applicable RSS.
14. Termination, Suspension and Illegality
14.1 If an Event of Default occurs with respect to a Party, or, where applicable any Credit Support Provider
of such Party (the “Defaulting Party”), at any time during the term of this Agreement, then so long as
the Event of Default is subsisting, uncured and unwaived at the time of giving notice, the other Party
(“Non-Defaulting Party”) may, in its sole discretion, terminate this Agreement and all Transactions
hereunder (but not some only) by giving Notice in Writing to the Defaulting Party and specifying a date
(which date shall be no earlier than the date that such notice is given to the Defaulting Party and no
later than twenty (20) Working Days thereafter) (“Early Termination Date”) after which no further
payments or deliveries shall be required to be made in respect of the terminated Transactions, and
instead one Party shall pay an amount calculated in accordance with this clause 14 (“Termination
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Amount”) to the other Party within seven (7) Working Days of its notification by Notice in Writing to the
Defaulting Party. If, however, “Automatic Early Termination” is specified in Appendix 6 as applying to
a Party then an Early Termination Date in respect of all outstanding Transactions will occur
immediately upon the occurrence with respect to such Party or its Credit Support Provider of an
Insolvency Event specified in the “Insolvency Event” definition in sub-paragraphs (a), (c), (e), (f), or, to
the extent analogous thereto, (h), and as of the time immediately preceding the institution of the
relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to
such Party or its Credit Support Provider of an Insolvency Event specified in sub-paragraph (d) of the
“Insolvency Event” definition or, to the extent analogous to it, sub-paragraph (h) thereof.
14.2 On or as soon as is reasonably practicable after the Early Termination Date the Non-Defaulting Party
shall calculate the Termination Amount in accordance with the following provisions of this clause 14,
and shall provide the Defaulting Party with a statement showing the quantum of the Termination
Amount, its method of calculation and including all relevant quotations used therein.
14.3 A transaction settlement (“Transaction Settlement”) for each Transaction shall be calculated by the
Non-Defaulting Party as an amount (which may be positive or negative) equal to (i) the sum of the Loss
(which may be a positive or negative amount) and the Unpaid Amounts owing to the Non-Defaulting
Party, less (ii) the Unpaid Amounts owing to the Defaulting Party, in each case in respect of the
Transaction concerned. For this purpose:
14.3.1 The “Loss” in respect of a terminated Transaction is an amount which the Non-Defaulting
Party determines in a commercially reasonable manner to be its total losses and costs (or
gain, in which case the “Loss” is expressed as a negative amount) resulting from the
termination of the Transaction, including loss of bargain, cost of funding or, at the election of
the Non-Defaulting Party, but without duplication, loss or cost (including, but not limited to, all
reasonable expenses, legal fees, brokerage fees and commissions) reasonably incurred as a
result of its terminating, liquidating or re-establishing any related trading position (including
any arrangement whereby it has hedged its obligations under the Transaction) or entering into
new arrangements which replace the Transaction or preserve for the Non-Defaulting Party the
economic benefit thereof (or, as the case may be, any resulting gain). Loss does not include
any Unpaid Amounts. The Non-Defaulting Party shall determine the Loss as of the Early
Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as
is reasonably practicable. The Non-Defaulting Party may (but need not) determine the Loss
by reference to quotations of relevant rates or prices from one or more leading dealers in the
coal markets.
14.3.2 The “Unpaid Amounts” in respect of a Transaction are those amounts which the
Non-Defaulting Party determines in good faith to be owing from one Party to the other as at the
Early Termination Date, being (i) sums which have become due for payment on or before the
Early Termination Date but which have not by that date been paid, (ii) sums payable in respect
of deliveries made on or before the Early Termination Date but in respect of which payment
has not become due by that date, (iii) sums payable in respect of a failure to deliver or take
delivery of all or part of a Shipment in accordance with this Agreement, to the extent that
payment of such sums has not become due by the Early Termination Date, and (iv) interest
payable on unpaid amounts. The value of Unpaid Amounts shall be:
(a) in the case of a payment due but not yet paid, the amount of such payment;
(b) in the case of a delivery made for which payment has not become due by the Early
Termination Date, an amount equal to such delivery's value in accordance with the
terms of the relevant Transaction;
(c) in the case of a failure to deliver or take delivery of all or part of a Shipment, payment
in respect of such failure not having become due by the Early Termination Date, the
amount which would have become payable pursuant to the relevant Transaction in
respect of such failure; and
(d) in the case of interest on unpaid amounts, interest calculated in accordance with this
Agreement.
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14.4 The Termination Amount shall be calculated as the sum of all Transaction Settlements (taking account
of whether they are positive or negative amounts) and any and all other amounts for which the Parties
are liable under or in connection with this Agreement (such amounts being expressed as positive
amounts where they are owed to the Non-Defaulting Party, and being expressed as negative amounts
where they are owed to the Defaulting Party). Where positive, the Termination Amount shall be paid by
the Defaulting Party to the Non-Defaulting Party, and where negative, the Termination Amount shall be
paid by the Non-Defaulting Party to the Defaulting Party.
14.5 For the purpose of calculating each Transaction Settlement, it shall be assumed that each of the
Parties (or its Credit Support Provider) has a Credit Rating of investment grade as defined by Moody’s,
Standard & Poor’s and Fitch.
14.6 The Non-Defaulting Party may, at its option, set off the Termination Amount against any or all other
amounts owing (whether or not matured, contingent or invoiced) between the Parties under any other
agreements, instruments or undertakings between the Parties and irrespective of the currency of its
denomination. This right of set off shall be without prejudice and in addition to any right of set off,
combination of accounts, lien, charge or other right to which any Party is at any time otherwise entitled
(whether by operation of law, by contract or otherwise). If an amount is unascertained, the
Non-Defaulting Party may in good faith estimate the amount and set off and recoup in respect of that
estimate. The Parties shall make any adjustment payment required within three (3) Working Days of
the amount becoming ascertained. The Non-Defaulting Party may convert any such other amounts
owing in a currency other than the currency of the Termination Amount to the currency of the
Termination Amount for the purposes of such set off at a market rate determined by the
Non-Defaulting Party acting reasonably. The Non-Defaulting Party will give notice as soon as
reasonably practicable to the Defaulting Party of any set off effected hereunder.
14.7 A Defaulting Party shall, on demand, indemnify and hold harmless the Non-Defaulting Party from and
against all reasonable out-of-pocket expenses, including legal fees and any stamp, registration,
documentation or similar tax or duty, incurred by the Non-Defaulting Party by reason of the
enforcement and protection of its rights under this Agreement or any Credit Support Document or by
reason of the early termination of Transactions.
14.8 The rights of the Parties under this clause 14 shall apply without prejudice to any other rights of, or
remedies available to, the Non-Defaulting Party or any other right of set-off which either Party may
have whether by agreement, operation of law or otherwise. Nothing in this Agreement shall be
effective to create a charge or other security interest.
14.9 Notwithstanding any other provision of this Agreement, after the occurrence of an Event of Default
(other than those specified in paragraph (e) and (f) of the definition) with respect to a Party, the
Non-Defaulting Party may, upon written notice to the Defaulting Party, in addition to any other
remedies that it may have, for the period that the relevant Event of Default subsists do any one or more
of the following:
14.9.1 withhold or suspend payments under this Agreement, other than those payable in respect of
delivered Coal; and/or
14.9.2 suspend its delivery obligations under this Agreement.
14.10 If, due to the adoption of, or any change in, any applicable law after the date on which a Transaction is
entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law after that date, it becomes
unlawful (other than as a result of a breach by the relevant Party of clause 4.2.1) for a Party (the
“Affected Party”):
14.10.1 to perform any absolute or contingent obligation to make a payment or delivery or to receive a
payment or delivery in respect of that Transaction or to comply with any other material
provision of this Agreement relating to that Transaction; or
14.10.2 to perform, or for any Credit Support Provider of that Party to perform, any contingent or other
obligation which the Party (or that Credit Support Provider) has under any Credit Support
Document relating to that Transaction (in either case, an “Illegality”)
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then, unless the Parties otherwise agree in writing, either Party may elect to terminate that Transaction
without penalty and the following provisions shall apply. Upon such termination, the Party which is not
the Affected Party (the “Non-Affected Party”) shall calculate the Transaction Settlement in respect of
each Transaction so terminated in accordance with clauses 14.3 and 14.5 (mutatis mutandis). The
Non-Affected Party shall give a Notice in Writing to the Affected Party as soon as reasonably
practicable specifying the amount of such Transaction Settlement (or, if there is more than one such
amount, the amount resulting from the aggregation and netting thereof) and the relevant Party shall
pay such net amount to the other Party within seven (7) Working Days therefrom. However, if both
Parties are Affected Parties, each Party shall determine the Termination Amount in respect of the
terminated Transactions in accordance with this clause. The Termination Amount payable shall be
equal to one half of the difference between the aggregate of the Transaction Settlements due to the
Party with the higher aggregate Transaction Settlement (“X”) and the aggregate of the Transaction
Settlements due to the Party with the lower aggregate Transaction Settlements (“Y”). Such
Termination Amount shall be paid by X to Y. If an event or circumstance which would otherwise
constitute or give rise to an Event of Default also constitutes an Illegality it will be treated as an Illegality
and will not constitute an Event of Default.
15. Force Majeure
15.1 Upon the occurrence of any event which affects or is likely to affect the ability of a Party to perform its
obligations under this Agreement, that Party shall give the other Notice in Writing thereof, which shall
include details of the event, and shall give further notices of any change in the situation as may be
appropriate from time to time.
15.2 In the event that a Party wishes to claim Force Majeure (the “FM Affected Party”) in accordance with
clause 15.3, it shall give notice to such effect to the other Party (the “Non-FM Affected Party”) as early
as practicable, which notice may be given orally and confirmed by Notice in Writing as soon as
possible.
15.3 Neither Seller nor Buyer shall be liable in any way whatsoever for delay and/or failure to comply with
this Agreement (other than a failure to make any payment due under it) to the extent that and for as
long as such failure is caused by Force Majeure including the counting of Laytime provided that the FM
Affected Party:
15.3.1 is in good faith unable to perform such obligations by any reasonable substitute means;
15.3.2 continues to seek to remedy the cause of the Force Majeure or to avoid or minimise its effects;
and
15.3.3 has complied in substance with the notice requirements of clause 15.1.
15.4 The Non-FM Affected Party may take reasonable counter-measures in response to any notices
received under clauses 15.1 or 15.2 including, where such notice is given by Seller, the cancellation or
diverting by Buyer (or, where Seller is the Party Responsible for Carriage, Seller) of its Vessels
provided always that unless the Non-FM Affected Party can cancel in accordance with the provisions
of clause 15.5, it must nominate a Vessel or Vessels as soon as reasonably practicable upon
cessation of the Force Majeure event.
15.5 Where a Force Majeure event prevents Buyer or Seller from accepting or delivering a Shipment such
acceptance or delivery shall be suspended for the duration of such event provided that after the
expiration of sixty (60) days after notification pursuant to clause 15.2 (orally or otherwise), the
Shipment may be cancelled without penalty at the option of the Non-FM Affected Party by Notice in
Writing. If elected by the Parties in Appendix 6, the Force Majeure termination payment provisions set
out in Appendix 6 shall apply.
15.6 Where a Force Majeure event prevents Buyer or Seller from accepting or delivering part of a
Shipment, the Non-FM Affected Party may elect in its sole discretion either:
15.6.1 to take or make delivery (as the case may be) of the unaffected part of the Shipment, in which
case the affected part shall be treated as if it were a separate Shipment to which clause 15.5
applies; or
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15.6.2 to refuse to take or make delivery (as the case may be) of the unaffected part of the Shipment,
in which case clause 15.5 shall apply as if the Force Majeure event were preventing the FM
Affected Party from accepting or delivering (as the case may be) the entire Shipment.
15.7 If as a result of the Force Majeure event the FM Affected Party is unable to meet all of its contractual
obligations under the Agreement and any other coal sale (in the case of the Seller) or coal purchase (in
the case of the Buyer) agreement it has entered into, then the FM Affected Party will act with
reasonable commercial endeavours to mitigate losses for all of its affected counterparties under all
such agreements.
15.8 Failure for whatever reason:
15.8.1 by Seller to deliver the Shipment due to failure of any supplier of the same to Seller; or
15.8.2 by Buyer to take delivery of the Shipment due to failure of any buyer of the same from Buyer,
shall not constitute Force Majeure unless the nature of the Force Majeure event is such that it affects
all potential suppliers that could feasibly supply or all potential buyers that could feasibly buy Coal at
the relevant load port or port of destination (as the case may be).
15.9 Notwithstanding the above, if the Vessel is already on Demurrage at the time of the Force Majeure
notification in accordance with clause 15.2, Demurrage shall continue to run.
16. Disputes
16.1 The following matters shall be referred to an independent expert (“Expert”) for determination: (i) any
dispute as to the adjustment which is to be made to the Base Price pursuant to clause 10.2 (if so
required pursuant to clause 10.3), (ii) any dispute as to whether a Replacement Price has been
properly determined in accordance with clause 13.1.1, (iii) any dispute as to whether a Sales Price has
been properly determined in accordance with clause 13.1.2, (iv) any dispute in relation to the selection
of the Primary Laboratory or the Referee Laboratory, (v) any dispute in relation to the selection of the
independent marine surveyor in accordance with clause 9.1, (vi) any dispute in relation to Demurrage;
or (vii) any other matter which the Parties agree should be referred to an independent expert for
determination.
16.2 Where, in relation to any matter referred to him, the Expert determines that any sum has not been
determined in accordance with the relevant provisions of the Agreement, the Expert shall have full
power to, and shall be required to, determine a replacement sum in accordance with the provisions of
the Agreement.
16.3 Where any matter is to be referred to an Expert, he shall be appointed by agreement between the
Parties, unless the Parties fail to agree, in which case an Expert shall be appointed in accordance with
clause 16.4 below.
16.4 Where the Parties fail to agree on the appointment of an Expert within ten (10) days of either Party
giving notification of its decision to refer the matter to an Expert, either Party (the “Applicant”) may
apply in writing to globalCOAL (with simultaneous copy to the other Party) to appoint an Expert,
including a brief statement describing the nature and circumstances of the dispute for the purposes of
selecting an Expert. Within five (5) days of receipt of the application, the other Party shall send to
globalCOAL (with simultaneous copy to the Applicant), a reply to any matters raised by the Applicant in
the application. globalCOAL shall endeavour to appoint an Expert as soon as reasonably practical
after receipt of the reply or expiration of the deadline by which a reply should have been submitted.
16.5 The Expert shall agree with the Parties, in writing, his terms of engagement, including fee rates, and
shall sign a declaration to the effect that there are no circumstances known to him likely to give rise to
justifiable doubts as to his independence and impartiality. The Expert shall have full discretion to
determine the procedure of the expert determination.
16.6 The costs of the Expert in determining the matter or matters in question shall be shared equally by the
Parties unless otherwise determined by the Expert.
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16.7 The Expert shall act as an expert and not as an arbitrator and shall give his determination in writing
and, if practicable, within thirty (30) days of the matter being referred to him. In the absence of
manifest error, the determination of the Expert shall be final, conclusive and binding upon the Parties.
16.8 Apart from the matters to be referred to an Expert pursuant to clause 16.1, any dispute arising out of or
in connection with this Agreement, including any question regarding its existence, validity or
termination, shall be referred to and finally resolved by arbitration under the rules of the London Court
of International Arbitration (“LCIA Rules”), which LCIA Rules are deemed to be incorporated by
reference into this clause.
16.8.1 The number of arbitrators shall be three (3) with each party entitled to nominate their own
arbitrator and the two (2) arbitrators appointed shall be entitled to appoint the third;
16.8.2 The seat, or legal place of arbitration shall be London;
16.8.3 The language to be used in the arbitral proceedings shall be English.
16.9 Any decision (including a majority decision) arising from arbitration shall be binding on the Parties and
an appeal to the High Court under the provisions of the Arbitration Act 1996 is excluded.
16.10 Notwithstanding the provisions of clause 16.1 and clause 16.8, the Parties may at any time agree to
submit any dispute arising out of or in connection with this Agreement to mediation in accordance with
the mediation rules published by globalCOAL from time to time.
17. Assignment or Novation
17.1 Subject to clause 17.2, neither Party shall assign, transfer, novate, encumber, create an interest in or
otherwise dispose of any rights or obligations under this Agreement without the prior consent of the
other Party by Notice in Writing, which consent shall not be unreasonably withheld or delayed.
17.2 A Non-Defaulting Party may assign, transfer, encumber or otherwise create an interest in all or any
part of its interest in any Termination Amount arising as a result of an Event of Default in respect of the
other Party and payable to it under clause 14.1 (and any of the interest thereon payable to it under
clause 12.8).
18. Agents
18.1 Each Party may by Notice in Writing to the other Party appoint an agent to perform all or any part of its
obligations under this Agreement provided that the Party appointing the agent shall, subject to the
provisions of this Agreement, remain liable for all of its obligations hereunder and shall be directly
responsible to the other Party in all respects for the acts of the agent. The expressions “Buyer” and
“Seller” in this Agreement shall be deemed to refer to Buyer’s agent and Seller’s agent respectively
with respect to obligations and functions the agent is appointed to perform through the
above-mentioned procedures.
18.2 In the event of Part Cargoes and where the parties loading or unloading from a Vessel at the Delivery
Point or Arrival Point (as applicable) so agree, the Major Shipper may perform certain obligations as
agreed between such parties on behalf of a Party and shall be deemed to be an agent in accordance
with clause 18.1.
19. Confidentiality
19.1 In relation to this Agreement and to any Transaction hereunder, the identity of the Parties is private
and confidential to the Parties and shall, save where disclosure is required by a regulatory
governmental or judicial authority or as permitted by clause 19.2, not be disclosed to third parties
without the prior consent of the other Party given by Notice in Writing, which consent shall not be
unreasonably withheld or delayed.
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19.2 Each Party may disclose the other Party's identity to its employees, officers, affiliates or advisers who
need to know such information for the purposes of carrying out the Party's obligations under this
Agreement.
20. Exclusion of Certain Warranties and Conditions; Limitation of Liability; Entire Agreement
20.1 All warranties or conditions which would, but for these terms, be implied by statute or otherwise
(including, without limitation, any warranty or condition relating to description, satisfactory quality,
merchantability or fitness for purpose) are excluded to the extent permitted by applicable law.
20.2 Subject to clause 20.3 and save in respect of sums payable pursuant to clauses 11.1.5,13.1,14 and
15.5 (if applicable) (and, for the avoidance of doubt, such sums shall not count towards the limit of
liability set out in clause 20.2.2):
20.2.1 neither Party shall be liable for any of the following howsoever arising: loss of profit, business
interruption, loss of revenue, loss of contract, loss of goodwill, loss of production, loss of
reputation, increased cost of working, any indirect or consequential loss, punitive damages,
exemplary damages or loss resulting from the other Party's liability to any other person arising
directly or indirectly from any failure or delay in performing any obligation pursuant to this
Agreement;
20.2.2 the aggregate liability of a Party in connection with any individual Transaction shall not exceed
an amount equal to the product of the number of Metric Tonnes per Delivery Period or Arrival
Period (as applicable), the number of Delivery Periods or Arrival Periods (as applicable) and
the Base Price for the Transaction.
20.3 Nothing in this Agreement shall limit or exclude liability in respect of:
20.3.1 fraud;
20.3.2 death or personal injury caused by the other Party’s negligence to the extent that liability in
respect thereof cannot be excluded under applicable law;
20.3.3 intentional or reckless default; or
20.3.4 gross negligence.
20.4 Each Party hereby confirms that the provisions of this clause 20 are reasonable in the light of the
business relationship existing with the other Party.
20.5 Neither Party shall be liable to the other (whether pursuant to an indemnity, in damages or otherwise)
in respect of any losses suffered by the other Party to the extent that such losses could have been
avoided by the other Party acting in a commercially reasonable manner to minimise its losses.
20.6 This Agreement contains the entire understanding of the Parties to the exclusion of any and all prior
agreements or understandings whether oral or written. Each Party agrees that it will have no remedy in
respect of any representation, statement, or warranty that is not expressly set out in this Agreement,
except in the case of fraud.
21. Notices and Communication
21.1 All notices given under this Agreement shall be given as Notices in Writing to the respective addresses
of the Parties specified in Part 1 of this SCoTA, unless otherwise agreed by the Parties.
21.2 Each Notice in Writing shall be deemed given:
21.2.1 if sent by facsimile, telex, e-mail or other electronic means of communication, on receipt by the
sending Party of evidence that the communication has been transmitted in full to the receiving
Party; and
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21.2.2 if sent by courier, two (2) Working Days after despatch thereof.
21.3 Each Party shall be entitled to record telephone conversations in connection with this Agreement and
such recordings may be used as evidence.
22. Waiver
22.1 Waiver of any breach of this Agreement shall not be construed as a waiver of any other breach.
23. Amendment
23.1 Amendments may be made to this Agreement including the terms applicable to any Transaction by
mutual agreement of the Parties, but shall only become binding by written agreement signed by each
of the Parties.
23.2 If any provision of this Agreement is determined to be null and void or unenforceable such provision
shall be deemed to be severed, and the remaining provisions of this Agreement shall remain in full
force and effect.
24. Exclusion of Third Party Rights
24.1 Unless expressly provided in this Agreement, no term of this Agreement is enforceable pursuant to the
Contracts (Rights of Third Parties) Act 1999 by any person who is not a party to it.
25. Governing Law
25.1 This Agreement and the rights and obligations of the Parties arising there from, including their
non-contractual obligations, shall be governed by and construed, enforced and performed in
accordance with the laws of England and Wales.
25.2 The UN Convention on Contracts for the International Sale of Goods (1980) shall not apply to this
Agreement.
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Appendix 1: Standard Close-Out Agreement for Coal
[Insert reference number]
[This form of agreement is drafted to operate where the Delivery/Arrival Period is a calendar month and where
a single settlement month is specified rather than multiple months. If the Parties require the agreement to
cover more than one Delivery/Arrival Period, or if the Transaction concerned has a weekly Delivery Period, the
form of agreement will need to be amended.]
This agreement is made between:
[Insert name, address and, unless Settlement Agent is nominated, bank account details of each party in the
Circle]
each a “Party” and collectively the “Parties”.
In this agreement the following terms shall have the meanings set out below:
“Base Price” means the price to be paid by a Buyer under a Physical Agreement in
relation to the Settlement Tonnes for delivery in the Settlement Month
expressed in United States Dollars per metric tonne and expressed using
the calorific value basis as specified in the relevant RSS on a “net as
received” basis
“Buyer” means a Party who is a buyer of coal under a Physical Agreement
“Circle” means the series of obligations under Physical Agreements to make and
take delivery of shipments of coal which are shown by any party to form a
continuous circle of such obligations between the Parties
“Expert” means [insert name of expert]
“Physical Agreement” means each bilateral agreement between sequential Parties in the Circle
relating to the sale and purchase in the Settlement Month of a quantity of
physical coal equal to or greater than Settlement Tonnes
“Seller” means a Party who is a supplier of coal under a Physical Agreement
“Settlement Agent” means [insert name and bank account details of settlement agent if
applicable]
“Settlement Amount” has the meaning specified in clause 4
“Settlement Month” means [insert relevant calendar month]
“Settlement Price” means [insert price in USD per metric tonne as agreed between the
Parties, basis as specified in the relevant RSS (kcal/kg NAR) ]
“Settlement Tonnes” means [insert number of Metric Tonnes]
“Working Day” means any day (other than Saturday and Sunday) on which banks in the
countries of Buyer and Seller are generally open for business
1. Each Party confirms that it has entered into:
1.1 a Physical Agreement to purchase the number of Settlement Tonnes in the Settlement Month
from a Party; and
1.2 a Physical Agreement to supply the number of Settlement Tonnes in the Settlement Month to
a Party.
2. The Parties hereby agree to forego their respective rights and obligations relating to physical delivery of
Settlement Tonnes in the Settlement Month under Physical Agreements (including but not limited to the
rights and obligations to receive and make payments in respect thereof) and to substitute such rights and
obligations with this Agreement.
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3. Each Party shall calculate one Settlement Amount for the Physical Agreement where it acts as Buyer and
one Settlement Amount for the Physical Agreement where it acts as Seller.
4. Each Settlement Amount shall be calculated by multiplying Settlement Tonnes by the amount obtained by
deducting the Settlement Price from the Base Price.
5. Where the Settlement Amount in respect of a Physical Agreement is positive, the Buyer shall pay the
Settlement Amount (together with any applicable taxes as referred to in clause 7) by telegraphic transfer to
the Seller (or, where a Settlement Agent is specified, the Settlement Agent)
6. Where the Settlement Amount in respect of a Physical Agreement is negative, the Seller shall pay the
absolute value of the Settlement Amount (together with any applicable taxes as referred to in clause 7
(including the relevant paragraphs of the applicable RSS) by telegraphic transfer to the Buyer (or, where a
Settlement Agent is specified, the Settlement Agent).
7. Any payments due pursuant to clauses 5 or 6 (including the relevant paragraphs of the applicable RSS)
shall be made no later than three (3) Working Days after this agreement becomes effective and the Parties
shall issue invoices and pay relevant taxes as required by applicable law.
8. Any delay in making payment pursuant to clauses 5 or 6 (including the relevant paragraphs of the
applicable RSS) shall result in interest at a rate of LIBOR plus two percent (2.0%) being applied to any
outstanding amount until such amount, together with applicable interest, is received. For the purposes of
this clause, LIBOR shall mean the one (1) month London Inter-bank Offered Rate for United States Dollars
from time to time as quoted by Reuters at 11:00AM (GMT) on the first day of such period or if no such rate
is then quoted, on the next succeeding day on which such rate is so quoted.
9. Any party making a payment pursuant to clause 5 or 6 (including the relevant paragraphs of the applicable
RSS) shall promptly furnish the party to whom it makes such payment with a statement showing the
calculation of the Settlement Amount including any calorific value conversion where the basis of the
Physical Agreement is not 6,000 kilocalories per kilogram on a “net as received” basis. Any dispute relating
to the calculation of the Settlement Amount shall be referred to the Expert whose finding shall be final and
binding on the respective Buyer and Seller. The cost of the Expert shall be borne by the party whose
calculation, in the opinion of the Expert, least reflects the finding of the Expert.
10. Save to the extent that, pursuant to clause 2, the Parties forego their respective rights and obligations, the
rights and obligations of the Parties under each Physical Agreement shall remain in full force and effect.
11. This agreement shall become effective and binding on the Parties on the date on which it is last signed by
one of the Parties.
12. Clauses 2.1, 2.3, 2.4, 2.5, 2.6 (Interpretation), 17 (Assignment or Novation), 18 (Agents), 19
(Confidentiality), 22 (Waiver), 23 (Amendment) and 24 (Exclusion of Third Party Rights) of the relevant
SCoTA Version as produced by Global Coal Limited and published at http://www.globalcoal.com shall
apply to this agreement mutatis mutandis.
13. The Parties agree that this agreement shall be deemed to constitute prior consent of each Party given by
Notice in Writing pursuant to clause 19.1 (Confidentiality) of the relevant SCoTA Version as produced by
Global Coal Limited and published at http://www.globalcoal.com for the purposes of disclosing information
to the extent necessary for concluding this agreement.
14. References to clauses are to clauses in this agreement unless otherwise specified.
15. This agreement may be executed in any number of counterparts, all of which taken together shall
constitute one and the same agreement, and any Party may enter into this agreement by executing a
counterpart. A Party executing a counterpart shall not be bound by this agreement unless and until each
other Party executes a counterpart.
16. This agreement and the rights and obligations of the Parties arising therefrom shall be governed by and
construed, enforced and performed in accordance with the laws of England.
For and on behalf of each Party:

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[Insert names of each Party]
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Appendix 2: Standard Financial Settlement Agreement for Coal
[Insert reference number]
[This form of agreement is drafted to operate where the Delivery/Arrival Period is a calendar month and where
a single settlement month is specified rather than multiple months. If the Parties require the agreement to
cover more than one Delivery/Arrival Period, or if the Transaction concerned has a weekly Delivery Period, the
form of agreement will need to be amended.]
This agreement is made between:
[Insert name, address and bank account details of both parties]
each a “Party” and collectively the “Parties”.
In this agreement the following terms shall have the meanings set out below:
“Base Price” means the price to be paid by Buyer under the Physical Agreement in
relation to the Settlement Tonnes for delivery in the Settlement Month
expressed in United States Dollars per metric tonne and expressed
using the calorific value basis as specified in the relevant RSS on a
“net as received” basis using a pro rata adjustment unless otherwise
specified in the Physical Agreement
“Buyer” means the Party who is the buyer of coal under the Physical Agreement
“Expert” means [insert name of expert]
“Physical Agreement” means the bilateral agreement between the Parties recorded in the
Transaction Summary dated [date] relating to the sale and purchase in
the Settlement Month of a quantity of physical coal equal to or greater
than the Settlement Tonnes
“Seller” means the Party who is the supplier of coal under the Physical
Agreement
“Settlement Amount” has the meaning specified in clause 2
“Settlement Month” means [insert relevant calendar month]
“Settlement Price” means [the globalCOAL RB Index as at [date], the globalCOAL NEWC
Index as at [date] or another index mutually agreed upon by the Parties
for the purposes of this agreement]
“Settlement Tonnes” means [insert number of Metric Tonnes]
“Working Day” means any day (other than Saturday and Sunday) on which banks in
the countries of Buyer and Seller are generally open for business
1. The Parties hereby agree to forego their respective rights and obligations relating to physical delivery of
Settlement Tonnes in the Settlement Month under the Physical Agreement (including but not limited to the
rights and obligations to receive and make payments in respect thereof) and to substitute such rights and
obligations with this Agreement.
2. The Settlement Amount shall be calculated by multiplying Settlement Tonnes by the amount obtained by
deducting the Settlement Price from the Base Price.
3. Where the Settlement Amount is positive, the Buyer shall pay the Settlement Amount (together with any
applicable taxes as referred to in clause 5) by telegraphic transfer to the Seller
4. Where the Settlement Amount is negative, the Seller shall pay the absolute value of the Settlement
Amount (together with any applicable taxes as referred to in clause 5) by telegraphic transfer to the Buyer.
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5. Any payments due pursuant to clauses 3 or 4 shall be made no later than three (3) Working Days after the
end of the Settlement Month and the Parties shall issue invoices and pay relevant taxes as required by
applicable law.
6. Any delay in making payment pursuant to clauses 5 shall result in interest at a rate of LIBOR plus two
percent (2.0%) being applied to any outstanding amount for the period from the date when payment is due
until such amount, together with applicable interest, is received. For the purposes of this clause, LIBOR
shall mean the one (1) month London Inter-bank Offered Rate for United States Dollars from time to time
as quoted by Reuters at 11:00AM (GMT) on the first day of such period or if no such rate is then quoted, on
the next succeeding day on which such rate is so quoted.
7. Either Party making a payment pursuant to clause 5 shall promptly furnish the other Party with a statement
showing the calculation of the Settlement Amount including any calorific value conversion where the basis
of the Physical Agreement is not 6,000 kilocalories per kilogram on a “net as received” basis. Any dispute
relating to the calculation of the Settlement Amount shall be referred to the Expert whose finding shall be
final and binding on the Parties. The cost of the Expert shall be borne by the Party whose calculation, in the
opinion of the Expert, least reflects the finding of the Expert.
8. Save to the extent that, pursuant to clause 1, the Parties forego their respective rights and obligations, the
rights and obligations of the Parties under the Physical Agreement shall remain in full force and effect.
9. This agreement shall become effective and binding on the Parties on the date on which it is last signed by
one of the Parties.
10. Clauses 2.1, 2.3, 2.4, 2.5, 2.6 (Interpretation), 17 (Assignment or Novation), 18 (Agents), 19
(Confidentiality), 22 (Waiver), 23 (Amendment) and 24 (Exclusion of Third Party Rights) of the relevant
SCoTA Version as produced by Global Coal Limited and published at http://www.globalcoal.com shall
apply to this agreement mutatis mutandis.
11. References to clauses are to clauses in this agreement unless otherwise specified.
12. This agreement may be executed in counterparts, which, taken together shall constitute one and the same
agreement, and a Party may enter into this agreement by executing a counterpart. A Party executing a
counterpart shall not be bound by this agreement unless and until the other Party executes a counterpart.
13. This agreement and the rights and obligations of the Parties arising therefrom shall be governed by and
construed, enforced and performed in accordance with the laws of England.
For and on behalf of each Party:
[Insert names of each Party]
th
Appendix 3: Shipping Tolerance at Index (STI)
1. Where the Parties have agreed at the time of a Transaction that the Shipping Tolerance shall be priced in
accordance with this Appendix 3, then the following provisions shall apply to such Transaction.
2. The following terms shall have the meanings set out below:
“Base Price” means, in relation to a Transaction, the price in USD per Metric Tonne specified as
such in the Transaction Summary
“Buyer” means, in relation to a Transaction, the Party specified as such in the Transaction
Summary
“Final Price” means the price per Metric Tonne of Coal determined in accordance with the price
provisions of the applicable RSS (or clauses 10.2 and 10.3 of this Agreement if the
Shipment does not comply with Specification)
“Index Price” means the relevant index source for the Delivery Period or Arrival Period (as
applicable) and as specified in the Transaction Summary
“Seller” means, in relation to a Transaction, the Party specified as such in the Transaction
Summary
“Shipment” means each shipment of Coal making up the Quantity in each Delivery Period or
Arrival Period (as applicable) pursuant to a Transaction and in accordance with this
Agreement where the number of shipments is determined by the Buyer unless the
Seller is the Party Responsible for Carriage, in either case acting reasonably)
“Shipping Tolerance the benefit of Shipping Tolerance which the respective master has taken the benefit
Declaration” of and declared in respect of the relevant Shipment in accordance with the RSS
(expressed as a number of Metric Tonnes), being positive where the relevant
tonnage of Coal is above the respective part of the Quantity and negative where the
relevant tonnage of Coal is below the respective part of the Quantity
“Total Shipment means the sum of the Quantity and the Shipping Tolerance Declaration
Tonnage”
“Quantity” means, in relation to a Transaction, the number of Metric Tonnes per Delivery
Period or Arrival Period (as applicable) and specified as such in the Transaction
Summary
3. The Base Price of the Shipment(s) shall be adjusted up or down in accordance with the following formula:
((Base Price x Quantity) + (Index Price x Shipping Tolerance Declaration)) / Total Shipment Tonnage
4. The adjusted Base Price calculated pursuant to this Appendix shall be used in accordance with the price
provisions of the applicable RSS (or clauses 10.2 and 10.3 of the Agreement if the Shipment does not
comply with Specification) to determine the Final Price.
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Appendix 4: Form of Letter of Indemnity For Delivering Cargo
Without Production of the Original Bill of Lading
To : [insert name of Owners] [insert date]

The Owners of the [insert name of ship]
[insert address]
Dear Sirs
Ship: [insert name of ship]
Voyage: [insert load and discharge ports as stated in the bill of lading]
Cargo: [insert description of cargo]
Bill of lading: [insert identification numbers, date and place of issue]
The above cargo was shipped on the above ship by [insert name of shipper] and consigned to [insert name of
consignee or party to whose order the bill of lading is made out, as appropriate] for delivery at the port of [insert
name of discharge port stated in the bill of lading] but the bill of lading has not arrived and we, [insert name of
party requesting delivery], hereby request you to deliver the said cargo to [insert name of the specific party or
to such party as you believe to be or to represent the party or to be acting on behalf of the party] at [insert place
where delivery is to be made] without production of the original bill of lading.
In consideration of your complying with our above request, we hereby agree as follows :
1. To indemnify you, your servants and agents and to hold all of you harmless in respect of any liability, loss,
damage or expense of whatsoever nature which you may sustain by reason of delivering the cargo in
accordance with our request.
2. In the event of any proceedings being commenced against you or any of your servants or agents in
connection with the delivery of the cargo as aforesaid, to provide you or them on demand with sufficient
funds to defend the same.
3. If, in connection with the delivery of the cargo as aforesaid, the ship, or any other ship or property in the
same or associated ownership, management or control, should be arrested or detained or should the
arrest or detention thereof be threatened, or should there be any interference in the use or trading of the
vessel (whether by virtue of a caveat being entered on the ship’s registry or otherwise howsoever), to
provide on demand such bail or other security as may be required to prevent such arrest or detention or to
secure the release of such ship or property or to remove such interference and to indemnify you in respect
of any liability, loss, damage or expense caused by such arrest or detention or threatened arrest or
detention or such interference, whether or not such arrest or detention or threatened arrest or detention or
such interference may be justified.
4. If the place at which we have asked you to make delivery is a bulk liquid or gas terminal or facility, or
another ship, lighter or barge, then delivery to such terminal, facility, ship, lighter or barge shall be deemed
to be delivery to the party to whom we have requested you to make such delivery.
5. As soon as all original bills of lading for the above cargo shall have come into our possession, to deliver
the same to you, or otherwise to cause all original bills of lading to be delivered to you, whereupon our
liability hereunder shall cease.
6. The liability of each and every person under this indemnity shall be joint and several and shall not be
conditional upon your proceeding first against any person, whether or not such person is party to or liable
under this indemnity.
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7. This indemnity shall be governed by and construed in accordance with English law and each and every
person liable under this indemnity shall at your request submit to the jurisdiction of the High Court of
Justice of England.
Yours faithfully
For and on behalf of
[insert name of Requestor]
The Requestor
…………………………………
Signature
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Appendix 5: Form of Transaction Summary
SCoTA Transaction Summary
Set out below are the terms of a Transaction agreed between Buyer and Seller.
This Transaction Summary supplements, forms part of, and is subject to, the Standard Coal Trading
Agreement [Version 8] between [name of Party A] and [name of Party B] dated [date], as amended and
supplemented from time to time (the “SCoTA”). All terms and conditions contained in the SCoTA govern this
Transaction except as expressly modified in this Transaction Summary.
This Transaction Summary incorporates by reference the terms of the Relevant Standard Specification elected
by the Parties in respect of this Transaction and identified in section A of this Transaction Summary below, as
published by globalCOAL at http://www.globalcoal.com or as otherwise specified by the Parties.
This Transaction Summary confirms that the Seller has agreed to sell and deliver and the Buyer has agreed to
purchase and accept Coal in accordance with the terms and conditions of the SCoTA.
A) RSS [Insert the RSS name]
B) Number of Metric [Insert number of Metric Tonnes bought or sold]

Tonnes per [Delivery
[Use Delivery Period for FAS/FOB/DAP/DAT/DES transactions]
Period/Arrival Period]
[Use Arrival Period for CFR/CIF transactions]
C) Base Price [Insert price in USD]
D) [Delivery Period(s)/ [Insert period(s)]

Arrival Period(s)]
[Use Delivery Period(s) for FAS/FOB/DAP/DAT/DES transactions]
[Use Arrival Period(s) for CFR/CIF transactions]
E) Origin [Insert origin of the coal]
F) [Delivery Point/ [Use Delivery Point for FAS/FOB transactions and insert the load port]
Arrival Point]
[Use Delivery Point for DAP/DAT/DES transactions and insert the
discharge port]
[Use Arrival Point for CFR/CIF transactions and insert the discharge port]
G) Shipping Tolerance at [Insert index price source (if applicable)]

Index (Appendix 3)
H) BUYER: I) SELLER:
Date and time (GMT):
globalCOAL Standard Coal System ID, where applicable:
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Appendix 6: Agreement Elections
PART 1 – ELECTIONS
1. Clause 1 – Definitions
1.1 “Credit Support Provider”
The Credit Support Provider applicable to:
Party A is: , and
Party B is: .
1.2 “Credit Support Document”
The Credit Support Document(s) applicable to:
Party A is (are): , and
Party B is (are): .
1.3 “Event of Default”
1.3.1 Expiry of Credit Support
The expiry period applicable to any Credit Support Document pursuant to paragraph (c) is ten
(10) Working Days unless otherwise specified below:
1.3.2 Cross Default
[ ] Cross Default shall apply and the Cross Default Threshold applicable to:
Party A or its non-bank or other financial institution Credit Support Provider is
$ (or its equivalent in any other currency)
Party A's bank or other financial institution Credit Support Provider is
Party B or its non-bank or other financial institution Credit Support Provider is
Party B's bank or other financial institution Credit Support Provider is
1.3.3 Default Under a Specified Transaction
[ ] Default Under a Specified Transaction shall apply to Party A.
[ ] Default Under a Specified Transaction shall apply to Party B.
th
For the purposes of paragraph (h), “Specified Transaction” shall mean “any transaction
(including an agreement with respect to the Transaction) existing at the date of this Agreement
or after that date entered into between one Party (or any Credit Support Provider of that Party)
and the other Party (or any Credit Support Provider of that other Party) that is a commodity
forward or future, commodity option, commodity swap or other commodity transaction,
including any contract for differences or transaction, or any other similar transaction and, for
this purpose, “commodity” shall include (without limitation) gas, electricity, renewable energy
and emissions or similar products”.
1.4 “Material Adverse Change”
1.4.1 Definition Replacement
[ ] Where here elected by the Parties, the definition of “Material Adverse Change” in clause 1
shall be deleted in its entirety and replaced with the following:
(a) the Credit Rating or one of the Credit Ratings (if more than one) of a Party or, where
the Party's financial obligations under this Agreement are fully guaranteed or assured
under a Credit Support Document, the Credit Rating or one of the Credit Ratings (if
more than one) of its Credit Support Provider, is withdrawn or falls below the threshold
specified below; or
(b) the Credit Rating or one of the Credit Ratings (if more than one) of a bank or other
financial institution serving as a Party's Credit Support Provider, is withdrawn or falls
below the threshold specified below;
Credit Rating thresholds for Party A or its non-bank or other financial institution Credit Support
Provider:
Standard & Poor's: [●]
Moody’s: [●]
Fitch: [●]
Credit Rating thresholds for a bank or other financial institution acting as Party A’s Credit
Support Provider:
Moody’s: [●]
Fitch: [●]
Credit Rating thresholds for Party B or its non-bank or other financial institution Credit Support
Provider:
Moody’s: [●]
Fitch: [●]
Credit Rating thresholds for a bank or other financial institution acting as Party B’s Credit
Support Provider:
Moody’s: [●]
Fitch: [●]
1.4.2 Additional Events
In addition to the events described in the definition of "Material Adverse Change" in clause 1
(or as amended by this Appendix 6), where elected by the Parties below, the occurrence of
any one or more of the following events shall also constitute a "Material Adverse Change" for
the purposes of this Agreement:
th
[ ] (a) Financial Ratio Covenants
if a Party or its non-bank or other financial institution Credit Support Provider does not have a
Credit Rating, it or its non-bank or other financial institution Credit Support Provider fails to
fulfil any of the following requirements as determined by reference to the most recent relevant
financial statements:
(i) the ratio of (A) earnings before interest and taxes to (B) the sum of all interest and any
amounts in the nature of interest charged to expense relating to Total Debt is for the
party or the relevant Credit Support Provider in any fiscal year greater than the
following:
Party A threshold ratio: [●]
Party B threshold ratio: [●]
(ii) the ratio of (A) the amount of cash generated or employed by the party or the relevant
Credit Support Provider in its operating activities to (B) Total Debt is for the party or
the relevant Credit Support Provider in any fiscal year greater than the following:
(iii) the ratio of (A) Total Debt to (B) the sum of Total Debt and all paid up shareholder
cash contributions to the share capital account of any other capital account or any
other capital account of the party or the relevant Credit Support Provider is less than
the following:
[ ] (b) Decline in Tangible Net Worth
the Tangible Net Worth of a Party, or, where the Party's financial obligations under this
Agreement are fully guaranteed or assured under a Credit Support Document from a
non-bank or other financial institution Credit Support Provider, such Credit Support Provider,
falls below the following minimum amounts:
Party A: [●]
Party B: [●]
[ ] (c) Failure of Control and Profit/Loss Transfer Agreement
any Controlling Party of the Party disaffirms, disclaims, revokes, repudiates or rejects in whole
or in part, or challenges the validity of, any Control and Profit/Loss Transfer Agreement
entered into by it or otherwise fails to comply with or perform its obligations under such Control
and Profit/Loss Transfer Agreement;
[ ] (d) Amalgamation/Merger
a Party or its non-bank or other financial institution Credit Support Provider undergoes a
change of control, consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, or reorganises, incorporates, reincorporates or reconstitutes into
or as, another entity, or another entity transfers all or substantially all its assets to, or
reorganises, incorporates, reincorporates or reconstitutes into or as such Party or its non-bank
or other financial institution Credit Support Provider, and
th
(i) the creditworthiness of the Party, the relevant Credit Support Provider or the resulting,
surviving, transferee or successor entity is materially weaker than that of the Party or
the relevant Credit Support Provider, as the case may be, immediately prior to such
action; or
(ii) the resulting, surviving, transferee or successor entity fails to assume all the
obligations of the Party or the relevant Credit Support Provider under this Agreement
or any Credit Support Document to which it or its predecessor was a Party either by
operation of law or pursuant to an agreement reasonably satisfactory to the other
Party; or
(iii) the benefits of any Credit Support Document cease or fail to extend (without the
consent of the other Party) to the performance by the resulting, surviving, transferee
or successor entity of its obligations under this Agreement.
To the extent applicable, the following definitions shall have the following meanings:
“Control” of an entity means ownership of a majority of the issued shares or voting power of
the entity or Party, or a majority interest in a partnership or control in fact of the entity or Party;
“Controlling Party” means any legal entity who is a party to a Control and Profit/Loss
Transfer Agreement with a Party and such Party is in relation to such entity its subsidiary over
which such entity has Control;
“Control and Profit/Loss Transfer Agreement” means a control and/or profit/loss transfer
agreement within the meaning of the German Stock Corporation Act;
“Tangible Net Worth” means the sum of all paid up shareholder contributions to the share
capital account and any other capital account of the Party or Credit Support Provider (as the
case may be) ascribed for such purposes, and any accumulated earnings less any
accumulated retained losses and intangible assets including, but not limited to, goodwill;
“Total Debt” means in respect of the relevant period the sum of all Indebtedness.
2. Clause 7.1 - Vessel Assessment System Election
[ ] The following provisions shall apply to both Parties:
“Any Vessel which is nominated by the Party Responsible for Carriage in respect of a Shipment, may
(and, if the Accepting Party so requires by Notice in Writing to the Party Responsible for Carriage,
shall) be vetted by under an internationally recognised vessel assessment system on the basis of the
applicable vetting questionnaire signed by the Vessel owner’s technical manager and, (1) in all cases
where the Vessel is greater than 70,000 DWT and is or during the Transaction will be over 15 years old
or (2) otherwise where the fixture of the Vessel is for a period which (either originally or by extension) is
greater than 13 months, on the basis of a physical inspection. If the Vessel fails to obtain approval
through the vessel assessment system as a result of such vetting, the Accepting Party shall be entitled
to reject nomination of the Vessel by service of Notice in Writing to be received by the Party
Responsible for Carriage within two (2) Working Days of the Accepting Party’s receipt of notification of
such failure. For the avoidance of doubt, the service of a notice of rejection pursuant to this clause
does not of itself entitle the rejecting Party to treat the Transaction as terminated and will not constitute
a breach of the Transaction. If a valid notice of rejection is served, the Party Responsible for Carriage
shall nominate a substitute vessel within two (2) Working Days of receipt of the rejection notice without
prejudice to the other terms and provisions of this Agreement which shall remain unaffected, including
but not limited to the Delivery Period or Arrival Period (as applicable) and Seller and Buyer Nomination
Days. Such substitute Vessel shall be subject to the Accepting Party’s approval in accordance with the
terms of the applicable RSS.”
th
3. Clause 14.1 – Automatic Early Termination
Automatic Early Termination:
[ ] applies to Party A;
[ ] applies to Party B.
4. Clause 15.5 – Force Majeure
[ ] The following provisions shall apply under this Agreement:
“Upon cancellation, the Non-FM Affected Party shall calculate the Transaction Settlement in respect of
each Shipment so cancelled (which Shipment and the related payment terms shall, for this purpose,
be deemed to be a Transaction) in accordance with clauses 14.3 and 14.5 (mutatis mutandis). The
Non-FM Affected Party shall give a Notice in Writing to the FM Affected Party as soon as reasonably
practicable specifying the amount of such Transaction Settlement (or, if there is more than one such
amount, the amount resulting from the aggregation and netting thereof) and the relevant Party shall
pay such net amount to the other Party within seven (7) Working Days therefrom. However, if both
Parties are FM Affected Parties, each Party shall determine the Termination Amount in respect of the
terminated Transactions in accordance with this clause. The Termination Amount payable shall be
equal to one half of the difference between the aggregate of the Transaction Settlements due to the
Party with the higher aggregate Transaction Settlement (“X”) and the aggregate of the Transaction
Settlements due to the Party with the lower aggregate Transaction Settlements (“Y”). Such
Termination Amount shall be paid by X to Y.”
5. Agreement and Acknowledgement for Australian Parties
[ ] The following provisions shall apply to both Parties:
“It is agreed and acknowledged that where Party A and/or Party B as at the date of this Agreement or
any Transaction hereunder:
(a) is a resident of Australia;
(b) has a registered office or a place of business in Australia; or
(c) carries on business in Australia,
then the following provisions are not applicable to, not binding on, and not enforceable by or against
that Party, and do not form any part of the arrangement between the Parties:
• Clause 5.1;
• Clauses 12.10 and 12.11;
• Appendix 1;
• Appendix 2”
PART 2 - OTHER PROVISIONS
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Appendix 7: Form of Letter of Indemnity for Payment in the
Absence of Original Documents
Seller’s Indemnity format
The indemnity referred to in clause 12.12.2 shall be in the following format:
We refer to our Agreement dated the [insert date] day of [insert month], [insert year] in respect of your
purchase from us of [insert quantity] Metric Tonnes of [insert RSS] coal under this Agreement on Vessel
“[insert vessel name]”, bill of lading date [insert B/L date].
In consideration of your making payment of US dollars [insert US dollar amount] for [insert quantity] Metric
Tonnes of aforementioned coal in accordance with this Agreement and having agreed to accept delivery of the
cargo without having been provided with [insert the relevant documents as set out in clause 12.5] (the
“Documents”), we hereby represent and warrant all of the following:
(i) the existence and validity of the Documents;
(ii) that we are entitled to possession of the Documents;
(iii) that we were entitled to possession of the coal;
(iv) that we have good title to such coal;
(v) that title of the coal has been passed in accordance with this Agreement to you free of all liens,
charges or encumbrances of whatever kind;
(vi) that you will have the benefit of the warranty as to enjoyment of quiet possession implied by law in
the Agreement but without prejudice to any other warranty so implied.
Without prejudice to your rights under this Agreement we hereby agree to protect, indemnify and hold you
harmless from and against any and all damages, losses, liabilities, costs, claims and reasonable expenses
which you may suffer by reason of:
a. our failure to present the Documents to you in accordance with this Agreement; and/or including but
not limited to
b. any action or proceeding brought or threatened against you by reason of our said failure and any
breach of our above express representations and warranties in connection with questions of title to or
the right to possession of the Documents or the cargo or the proceeds of either; or any liens, charges
or encumbrances asserted on the Documents or the cargo or any other claims arising out of or in
connection with the documents.
Our liability hereunder shall remain in full force and effect unless and until we provide you with the Documents,
which we irrevocably agree to provide to you as soon as the same have come into our possession.
No term of this indemnity is intended to, or does, confer a benefit or remedy on any party other than the named
Buyer under the Agreement whether by virtue of the Contracts (Rights of Third Parties) Act 1999 or
howsoever.
This indemnity shall be governed by and construed in accordance with English law, shall be subject to the
exclusive jurisdiction of the English courts and shall cease to have effect upon the Documents being provided
to you.
Signed by: ..................... …………..Title: .....................
of: [insert Company Name]
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Standard Coal Trading Agreement

PART 1: Agreement and Execution

This Standard Coal Trading Agreement is entered into as of [date] between:

(e) For the purpose of clause 21.1 of this SCoTA:

SIGNED for and on behalf of [name of company] a )

SIGNED for and on behalf of [name of company] a )

2.2 Reference in this Agreement to:

(b) Clauses shall be interpreted as references to clauses in Part 2 of this Agreement;

(c) Appendices shall be interpreted as references to Appendices 1 - 7 inclusive to this Agreement.

2.7 In the event of conflict between:

2.8 For the avoidance of doubt:

3.1 In relation to each Transaction:

(a) Seller agrees to sell and deliver to Buyer; and

(b) Buyer agrees to purchase and take delivery from Seller,

4. Representations, Warranties and Undertakings

8. Title and Risk

9.3.1 one to be forwarded for Primary Analysis;

9.3.2 one to be kept as a Referee Sample; and

10.4.1 inherent moisture (air dried basis);

10.4.2 hydrogen (dry basis);

10.4.3 nitrogen (dry basis);

10.4.4 chlorine (dry basis);

10.4.5 boron (dry basis);

10.4.6 fluorine (dry basis);

10.4.8 full ash analysis (dry basis).

11.1 If Buyer rejects a Shipment pursuant to clause 10.3.1:

11.1.4 disposal of the Shipment shall be for Seller’s account; and

12. Price and Payment

13.1 In the absence of agreement to the contrary:

14. Termination, Suspension and Illegality

14.9.2 suspend its delivery obligations under this Agreement.

15. Force Majeure

15.8 Failure for whatever reason:

16.8.2 The seat, or legal place of arbitration shall be London;

16.8.3 The language to be used in the arbitral proceedings shall be English.

17. Assignment or Novation

20.3.3 intentional or reckless default; or

20.3.4 gross negligence.

21. Notices and Communication

21.2 Each Notice in Writing shall be deemed given:

24. Exclusion of Third Party Rights

25. Governing Law

This agreement is made between:

each a “Party” and collectively the “Parties”.

1. Each Party confirms that it has entered into:

For and on behalf of each Party:

This agreement is made between:

[Insert name, address and bank account details of both parties]

each a “Party” and collectively the “Parties”.

For and on behalf of each Party:

[Insert names of each Party]

To : [insert name of Owners] [insert date]

Ship: [insert name of ship]

Cargo: [insert description of cargo]

Bill of lading: [insert identification numbers, date and place of issue]

A) RSS [Insert the RSS name]

B) Number of Metric [Insert number of Metric Tonnes bought or sold]

C) Base Price [Insert price in USD]

D) [Delivery Period(s)/ [Insert period(s)]

E) Origin [Insert origin of the coal]

G) Shipping Tolerance at [Insert index price source (if applicable)]

Date and time (GMT):

globalCOAL Standard Coal System ID, where applicable: