SCoTA — Quality issues and adjustments to the base price

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As those readers familiar with the terms of the Standard Coal Trading Agreement (SCoTA) will know, the weighing/sampling/analysis regime set out in clause 9 of the current version of the SCoTA contract (version 8) will, if followed by the parties, produce analysis results which are binding on the parties and defined as the ‘Binding Results’. This bulletin addresses the position when the Binding Result(s) establishes that the shipment does not comply with contract specification.

In this regard, clause 10.2 of SCoTA provides: “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.”…

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