“All transactions are concluded on the basis that this master contract and all confirmations form a single agreement between the parties … and the parties would not make transactions otherwise. Paragraph 6, point e), of the Masteragrement (according to the standard form 1992 ISDA Master Agreement) is expressly referred to as “subject to possible occupation.” As noted above, Section 6 (f) of the Executive Framework Contract, inserted, followed the basic calculation provision contained in the ISDA Master Contract Manual of 1992. Initially, the planned improvement in point 6, point (f), instead of the compensation provided for in point 2 (c) was a more appropriate route for Shanpark, as it explicitly provided for the allocation of obligations arising from the absence of a captain`s contract. The isda masteragrement is a framework agreement that defines the terms and conditions between parties wishing to trade over-the-counter derivatives. There are two main versions that are still widely used on the market: the 1992 ISDA Master Agreement (Multicurrency – Cross Border) and the 2002 ISDA Master Agreement. The most important thing is to remember that the ISDA executive contract is a clearing agreement and that all transactions are interdependent. Therefore, a default in a transaction counts by default among all transactions. Point 1 (c) describes the concept of a single agreement and is of paramount importance as it forms the basis for network closures. When a standard event occurs, all transactions are completed without exception. The concept of out-of-gap clearing prevents a liquidator from making “cherry pickings,” i.e. making payments on profitable transactions for his bankrupt client and refusing to do so in the case of an unprofitable customer.
The payment measure chosen by the parties in such circumstances was a “loss” (unlike the “market quote”). In this context, the 1992 ISDA Masteragrement states that “one of the parties may determine its loss on the basis of relevant price or price quotes from one or more major traders in the relevant markets.” As a result, the defendants requested indicative quotes from Mediobanca and were warned: if the replacement transactions at the close of trading of XETRA (a trading platform of the Frankfurt Stock Exchange managed by the Frankfurt Stock Exchange) were assessed on 12 September 2008, they are expected to pay Mediobanca a total of 7.45 million euros, whereas if they were valued at the time of the opening of XETRA on 15 September 2008 a total amount of 7.45 million euros. They should have paid Mediobanca a total of 28.22 million euros. The parties try to limit this responsibility by including “unconfident” representations in their agreements, so that each party does not rely on the other and makes its own independent decisions. While these submissions are helpful, they would not prevent business practices or other measures if a party`s conduct was inconsistent with that presentation. Cooke J acknowledged that for the purposes of the master agreement, “compensation and implementation are two distinct concepts.” Compensation refers to amounts earned under the master contract (before or after the end of operations), while the offsets (in certain circumstances) are payable under another agreement to reduce the amount of the early termination, which is in itself the result of a closing session after early termination.