Serving Default Notices under Lockdown
(This is a summary of an article appearing in IQ or ISDA® Quarterly Magazine, May 2020)
Parties who wish to serve a Default Notice, Early Termination Notice or a Close Out Amount Statement under the ISDA® Master Agreement have to do so either in person or by courier, by registered mail or by facsimile. Electronic mail or email are not valid forms of delivery under the ISDA® for these notices (unless this has been amended in the schedule to the ISDA®). Given that facsimile is no longer widely used as a form of communication, this limits you to physical delivery to an address. Since the COVID-19 pandemic has swept the world, many offices have had to close as part of the lockdown regulations and most people are working from home. This makes physical delivery of notices to an office address impractical, if not impossible.
ISDA® commissioned an opinion from Linklaters on this matter, and in their opinion, Linklaters suggested that in the event that a method of delivery stated in an agreement is impossible, the court would imply that an alternative method of delivering such notice would be valid. However, Linklaters stated that if the method for delivering notices was merely impractical or inconvenient, such leniency would unlikely be extended, and the parties would be required to adhere to the delivery methods stated in the contract.
View the original Volume 6, Issue 2 here.