This time, ISDA indicated that there was no constraint to amend the 2002 agreement. The market is familiar with the 1992 agreement, and in this case familiarity generates more comfort than contempt. Over the past 18 months, ISDA has attempted to promote the use of the 2002 Agreement in the following ways: on 27 November 2001, the International Swaps and Derivatives Association distributed to its members the first draft of a new version of the ISDA Framework Agreement (the 2002 Agreement). The ISDA framework contract defines 8 typical default events, such as. B non-payment or delivery, breach or refusal of the agreement, misrepresentation, failure to cross and bankruptcy. In the event of default, the non-defaulting party may decide to continue or terminate all smart framework contract transactions under the ISDA framework contract. Each model clause must be part of the Schedule to the Parties Master Agreement. The clauses have been formulated on the assumption that the parties will include them in the conclusion of a new framework agreement. The model clauses do not automatically modify the forum agreements contained in the existing 1992 or 2002 ISDA framework agreements. Parties wishing to amend existing agreements should add additional language to an amended annex to reflect this fact.
Finally, many members of the documentation need to be re-educated in the 2002 agreement. Some received training or seminars 18 months or more ago in anticipation of faster implementation of the 2002 agreement in the market. Demand for the 2002 agreement is low. The major banks have generally set their timetables for 2002, but only welcome them at the request of the counterparty. The institutions which, in 1993/94, vigorously advanced the 1992 agreement and had to wait many months before being completed, are more inclined to react. Many are waiting for the big banks to obtain the authorizations of the political committees for the introduction of the 2002 agreement before sending them their calendars for 2002 or considering their own. Finally, the parties should bear in mind that the non-exclusive jurisdiction clause of the 2002 ISDA must be interpreted liberally, so that one party has the right to bring an action in another jurisdiction, even if the other party has commenced proceedings in the elected non-exclusive jurisdiction (in this case England). Among the elements of the 2002 agreement, most of the comments from market participants focus on three points:- * There is a general “wait-and-see” or “after you” attitude in the market. I believe that more large banks need to adopt the 2002 agreement more vigorously if it is to be successful. There is a tendency to withdraw from the 1992 Agreement in the event of any objection from the counterparty, and Section 4 of the ISDA Framework Agreement contains provisions concerning agreements between the parties, such as the provision of certain information, obtaining the necessary administrative or other authorisations and the payment of stamp duty. Beyond the disasters, I expect that the 2002 agreement will be the exceptional ISDA framework agreement that will be in place in the next two years. The European derivatives market is currently very busy and naturally tends to give greater priority to the transformation of the familiar 1992 agreement than to the attempt to negotiate the lesser-known 2002 agreement.
In some quarters, it is accepted that the 1992 agreement already offers adequate protection and that there is no need to change. Section 13(b)(i)(1) of the 2002 ISDA provides for the jurisdiction of the English court with respect to the 2002 ISDA Agreement and any non-contractual obligations in which English law is chosen as the law in force. . . .