Project Co's Liability to indemnify will be reduced to the extent that any such Liability is caused or contributed to by:
• any breach by the State of any State Project Document;
• any fraudulent, reckless, unlawful or malicious act or omission of the State and other indemnified parties;
• any Extension Event that occurs during the Development Phase but only if Project Co is entitled to an extension to the Date for Acceptance as a consequence of the Extension Event;
• any Intervening Event that occurs during the Operational Phase but only if Project Co is entitled to relief from performance of the Services as a consequence of the Intervening Event;
• subject to a notification requirement by Project Co, Project Co complying strictly with a direction from the State or the State Representative (except to the extent the direction is to comply with a State Project Document, is permitted under a State Project Document or was given as a result of a Project Co Act or Omission); or
• a failure by the State or a relevant indemnified party to use reasonable endeavours to mitigate the extent or consequences of the Liability,
other than to the extent that Project Co or any Project Co Associate is entitled to recover an indemnified amount under the Insurances (or would have been entitled to do so but for an Insurance Failure Event).
Project Co's liability to indemnify is further reduced through the operation of the Indirect or Consequential Loss regime.
The PV Standard Project Deeds provide that the State and Project Co respectively have no liability in respect of Indirect or Consequential Loss incurred or suffered by Project Co or the State respectively, except in limited circumstances which include:
• Liability arising from any criminal act, fraud or Wilful Misconduct - on the basis that this type of conduct is so serious that the liability that flows from it should not be limited;
• Liability arising from any loss of or damage to third party property or injury, illness or death of any person - on the basis that the party responsible for the loss should be expected to cover this loss and it is typically insured; and
• any payment, or any reduction in payment, made pursuant to the Project Documents, including under the Payment Schedule, the Change Compensation Principles and the Termination Payments Schedule.
These carve outs to the exclusion of Indirect or Consequential Loss will typically be passed through to Key Subcontractors and will accordingly be subject to the liability caps in their Key Subcontracts.