Compensation for short delivery/lifting. 4.6.1 If for a Year, the Level of Delivery by the Seller, or the Level of Lifting by the Purchaser falls below ACQ with respect to that Year, the defaulting Party shall be liable to pay compensation to the other Party for such shortfall in Level of Delivery or Level of Lifting, as the case may be (“Failed Quantity”) in terms of the following: 1 Less than 100% but up to 80% NIL 2 Less than 80% 0.01% # 0.0001 x P x ((80-LD or LL)/100) x ACQ # to be operative after a period of three years from the date of signing of the FSA Where P shall be the simple average of base prices of grades as shown in the Schedule III. * Note: For the phasing period the annual coal requirements shall be based on the quantities mentioned by the Purchaser for the initial years under Schedule I of this agreement 4.6.2 The Level of Delivery/ Level of Lifting that would cause compensation for the Failed Quantity payable by the defaulting Party, as mentioned in the table above, may be reviewed by the Seller in light of its Coal availability and Coal commitments, and amended accordingly on year-to-year basis at the sole discretion of the Seller during the term of the Agreement. 4.6.3 Commitments made under prior FSAs and commitments existing under “Coal Distribution System” as defined at 1.1(j) shall take precedence over the commitments made under this FSA.
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Sources: Fuel Supply Agreement, Fuel Supply Agreement