22.4.2  Treatment of uninsurable risk

(a)  If either party considers that a risk which is required to be insured under the Project Contracts is uninsurable, then that party must immediately notify the other in writing, giving particulars.

(b)  If the parties agree, or it is determined through the dispute resolution procedure, that the relevant risk is uninsurable, and the fact that the risk is uninsurable is not attributable to the actions of the private party or a sub-contractor, the private party is not required to procure insurance against that risk for so long as that risk is and remains uninsurable.

(c)  If the uninsurable risk materialises and it is a Force Majeure Event and the project agreement is terminated, government will pay the private party a Termination Payment in accordance with the principles set out in Chapter 25 (Termination Payments).

(d)  Where a risk is uninsurable, the private party must approach the insurance market on a regular basis to establish whether that risk remains uninsurable and advise government accordingly. If the insurance becomes available again, the private party must effect that insurance.

(e)  Government may treat risks which are uninsurable prior to contractual close differently, as it is a matter of negotiation with the private party and will depend on the particular circumstances of the project.