General Discussion Topics, page-74702

Just to engage once and only time on this long running topic.

"50% of production or 113,000 tonnes, whichever is greater."

Firstly, an important contextual obligation here is the term of the agreement or clause. Unless otherwise specified, the obligation above is for the term of the agreement. If somewhere it states that it is per annum (or some other term), then that would set the term to which this clause / obligation applies. (you all may / probably know this!!)

Secondly, the clause simply needs to be broken into its two key obligations:

1. The primary (first) obligation is "50% of production" (from NAL to PLL). This obligation is clearly that PLL get 50% of whatever is produced.
2. The secondary obligation is "or 113,000, whichever is greater". This obligation appears to be so PLL could secure a minimum production quantity (for whatever reason they had to want / require this), if it is that 50% of production falls below this figure

So, examples:

• If SYA produce 100,000, then PLL get 100,000 tonnes, SYA 0.
• If SYA produce 200,000 tonnes from NAL, PLL get access to 113,000 tonnes and SYA 87,000 tonnes.
• If SYA produce 300,000 tonnes, PLL get 150,000 and SYA 150,000 tonnes.

However, (imo) there is no way to have a definitive interpretation.

The way the clause reads, by itself, is complicated by two things:

1. The framing of the phrase. IMO the phrase should have read (for clarity) - "50% of production or a minimum of 113,000 tonnes, whichever is greater." (This assumes my interpretation that PLL wanted a minimum quantity, is correct).
2. The other is contextual ambiguity. This arises due to the complete lack of context. To be definitive would require seeing he rest of the document in order to make meaning of this clause (sentence), as trying to definitely conclude what it means out of context is fraught with assumptions and difficulty.

EB