Library / B 143 Federal Republic of Nigeria Official Gazette No. 52
B 143 Federal Republic of Nigeria Official Gazette No. 52

Page 12 of 31
B  154
25.—(1)  A member may be declared a defaulter by direction or circular
of the gas exchange or clearing house, if the member —
(a) is unable to fulfil its clearing or settlement obligations ;
(b)  admits or discloses its inability to fulfil or discharge its duties,
obligations and liabilities ;
(c)  fails or is unable to pay within the specified time the damages and
the money difference due on a closing-out effected against him under the
bye-laws of gas exchange or clearing house ;
(d) fails to pay any sum due to the gas exchange or clearing house
which may be prescribed by the authority competent for such purpose ;
(e) fails to pay or deliver money, gas or other related assets due to a
member who has been declared a defaulter within the time of declaration
of default of the member, in the manner and to the person as the gas
exchange or clearing house may direct ; or
(f ) under any other circumstances as may be decided by the Authority
or with the approval of the Authority by the gas exchange or clearing house.
(2)  In the event a member is declared a defaulter and the member fails
to meet its clearing and settlement obligations, upon crystallisation of claims in
accordance with the bye-laws of the gas exchange, the claim amount shall be
set aside from deposits of the defaulting member and the recovered amount
shall be distributed fairly and proportionately among the affected parties
including transporter, seller, buyer, pipeline system operator and gas exchange
or clearing house, from the deposits of the member or client.
(3)  The gas exchange may utilise the Settlement Guarantee Fund and
other money to the extent necessary to eliminate the obligation of the defaulting
member in the following order —
(a) liquidation of collaterals - contributions or deposits, including margins
in any form, by the defaulting member or client ;
(b) liquidation of security deposit - membership deposit given by the
defaulting member to the gas exchange or clearing house ;
(c) liquidation of assets — the assets of such defaulter member vested
with the gas exchange or clearing house ;
(d) insurance money — insurance taken by gas exchange or clearing
house of an amount as considered appropriate by them for protection against
defaults ;
(e)  initial contribution of the gas exchange or clearing house towards
Settlement Guarantee Fund ;
(f )  contribution towards Settlement Guarantee Fund by all members or
clients, all non-defaulting members or client’s contribution in proportion of
deposits towards Settlement Guarantee Fund ;
Default
remedy
mechanism
on gas
exchange or
clearing
house