63.1  Conduct of Claims

This Clause 63 shall apply to the conduct, by a Party from whom an indemnity is sought under this Contract, of claims made by a third person against a Party having (or claiming to have) the benefit of the indemnity.  The Party having, or claiming to have, the benefit of the indemnity is referred to as the "Beneficiary" and the Party giving the indemnity is referred to as the "Indemnifier".  Accordingly:

63.1.1  if the Beneficiary receives any notice, demand, letter or other document concerning any claim for which it appears that the Beneficiary is, or may become entitled to, indemnification under this Contract and any of the Ancillary Documents, or in relation to involvement in any investigation or proceedings by any auditor, inspector or ombudsman, the Beneficiary shall give notice in writing to the Indemnifier as soon as reasonably practicable together with such further information and documentation he or she may require and in any event within twenty (20) Business Days of receipt of the same;

63.1.2  subject to Clauses 63.1.3, on the giving of a notice by the Beneficiary pursuant to Clause 63.1.1 above, where it appears that the Beneficiary is or may be entitled to indemnification from the Indemnifier in respect of all (but not part only) of the liability arising out of the claim, the Indemnifier shall (subject to providing the Beneficiary with a sufficient indemnity to its reasonable satisfaction against all costs, charges and expenses, actions, demands, proceedings, claims whatsoever that it may incur by reason of such action) be entitled to dispute the claim in the name of the Beneficiary at the Indemnifier's own expense and take conduct of any defence, dispute, compromise, or appeal of the claim and of any incidental negotiations.  The Beneficiary shall give the Indemnifier all reasonable cooperation, access and assistance for the purposes of considering and resisting such claim;

63.1.3  with respect to any claim conducted by the Indemnifier pursuant to Clause 63.1.2 above:

(a)  the Indemnifier shall keep the Beneficiary fully informed and consult with it about material elements of the conduct of the claim;

(b)  the Indemnifier shall not bring the name of the Beneficiary into disrepute; and

(c)  the Indemnifier shall not pay or settle such claims without the prior written consent of the Beneficiary, such consent not to be unreasonably withheld or delayed;

63.1.4  the Beneficiary shall (without prejudice to its duty to mitigate) be free to pay or settle any claim on such terms as it thinks fit and without prejudice to its rights and remedies under this Contract if:

(a)  the Indemnifier is not entitled to take conduct of the claim in accordance with Clause 63.1.2 above; or

(b)  the Indemnifier fails to notify the Beneficiary of its intention to take conduct of the relevant claim within twenty (20) Business Days of the notice from the Beneficiary under Clause 63.1.1 above or notifies the Beneficiary that it does not intend to take conduct of the claim; or

(c)  the Indemnifier fails to comply in any material respect with the provisions of Clause 63.1.3 above within twenty (20) Business Days of notice from the Beneficiary.

63.1.5  the Beneficiary shall be free at any time to give notice to the Indemnifier that it is retaining or taking over (as the case may be) the conduct of any defence, dispute, compromise or appeal of any claim (or of any incidental negotiations) to which Clause 63.1.2 above applies.  On receipt of such notice the Indemnifier shall promptly take all steps necessary to transfer the conduct of such claim to the Beneficiary, and shall provide to the Beneficiary all reasonable co-operation, access and assistance for the purposes of considering and resisting such claim.  If the Beneficiary gives any notice pursuant to this Clause 63.1.3(b), then the Indemnifier shall be released from any liability under its indemnity under Clause 61.1 [Add any other relevant indemnity references] and, without prejudice to any accrued liabilities, any liability under its indemnity given pursuant to Clause 63.1.2 in respect of such claim;

63.1.6  if the Indemnifier pays to the Beneficiary an amount in respect of an indemnity and the Beneficiary subsequently recovers (whether by payment, discount, credit, saving, relief or other benefit or otherwise) a sum which is directly referable to the fact, matter, event or circumstances giving rise to the claim under the indemnity, the Beneficiary shall forthwith repay to the Indemnifier whichever is the lesser of:

(a)  an amount equal to the sum recovered (or the value of the saving or benefit obtained) less any out-of-pocket costs and expenses properly incurred by the Beneficiary in recovering the same; and

(b)  the amount paid to the Beneficiary by the Indemnifier in respect of the claim under the relevant indemnity provided that there shall be no obligation on the Beneficiary to pursue such recovery and that the Indemnifier is repaid only to the extent that the amount of such recovery aggregated with any sum recovered from the Indemnifier exceeds any loss sustained by the Beneficiary (including for this purpose indirect or consequential losses or claims for loss of profits which are excluded by this Contract from being recovered from the Indemnifier); and

63.1.7  any person taking any of the steps contemplated by this Clause 63.1 shall comply with the requirements of any insurer who may have an obligation to provide an indemnity in respect of any liability arising under this Contract.