GENERAL QUESTIONS
Why has EFETnet been set up?
EFETnet was set up in 2002 as cost sharing vehicle by major European energy traders in order to realise EFET’s common electronic standards for energy trading. The common driver for the companies involved has been to foster European-wide electronic standards for energy trading. Several early mover companies have been involved since the outset; these include Barclays Capital, Electrabel, Gaselys and RWE.
As first standardised process developed is an implementation of the EFET eCM standards for electronic confirmation matching. The EFETnet Software brings about a substantial operational improvement in the way trades are confirmed. EFETnet provides a cost benefit through amortising costs for a single solution over the user base.
The EFETnet Software comprises: the different modules (eCM, ePM, ...) and the Ponton X/P, a third party product. Ponton Consulting GmbH, a software development firm based in Hamburg, Germany has granted EFETnet an exclusive license to sub-license the Ponton X/P. Other than Ponton X/P, EFETnet owns all rights to the EFETnet Software which it has commissioned Ponton Consulting to build. The current maintenance and support contract run until the end of 2012.
Who is using EFETnet?
EFETnet is used by energy companies, banks and brokers in Europe. An updated list of current EFETnet Users is available on www.efetnet.org. EFETnet has recently developed a ‘pay-as-you-go’ solution for small traders and local utilities in Germany.
All companies involved in trading wholesale gas, electricity and carbon allowances can financially benefit from subscription to EFETnet.
LEGAL / ORGANISATIONAL PART
How is EFETnet organized and who owns EFETnet?
EFETnet is a private capital company under Dutch law with its corporate seat in Amsterdam. All shares are owned by EFET, the European Federation of Energy Traders, a foundation incorporated in The Netherlands. For more information on EFET see www.efet.org.
EFETnet is managed by the managing director. The correct management of EFETnet is controlled by a supervisory board and the management meeting. Major financial decisions must be approved by the share-holder in the shareholder meeting.
More detailed information on the management of EFETnet is published on www.efetnet.org.
EFETnet is operating according to strict principles of corporate governance, providing for transparency, non-discrimination, accountability and fairness in its business activity, internally with regard to its clients, and externally with regard to competitors in the market. An detailed rulebook for EFETnet governance has been put in place by its share-holder
Why is EFETnet, a company incorporated in the Netherlands, using an Accession Agreement subject to German law?
EFETnet is the provider of the EFETnet Software and associated support services; it acts as a cost-sharing vehicle to the benefit of the energy industry. The EFETnet Software has been procured from Ponton Consulting GmbH, a German software company. The software development and maintenance contracts between EFETnet and Ponton are governed by German law. Since the EFETnet Accession Agreement with users must be strictly back-to-back with the software development and maintenance agreement between Ponton and EFETnet, the Accession Agreement has to be subject to the same law. EFETnet cannot agree to any law other than German law without substantially increasing the legal basis risk.
Are the terms of the Accession Agreement negotiable, if not then why?
The terms of the accession agreement are non-negotiable between EFETnet and EFETnet users. The operation of EFETnet is subject to strict principles for governance in line with its working principles. These principles provide for transparent, non-discriminatory and neutral treatment of all EFETnet users. EFETnet is not allowed to discriminate between EFETnet users by agreeing on “more favourable” terms.
The legal framework is the result of a common negotiation involving the supplier Ponton, EFETnet and a group of initial EFETnet users. The accession agreement and the General Terms of Business represent a compromise between different, and sometime conflicting interests of different stakeholders.
The life of EFETnet user contracts is in line with the duration of the software license granted to EFETnet by Ponton GmbH. The first license period expires on December 14th 2007. Any renegotiation of terms shall be on the agenda before 2007 in the context of the expiry of the initial license term and renegotiation for a second license term. As practices during the initial term, negotiations for the second term shall involve the different stakeholders.
Does the EFETnet user have a direct contractual relationship with Ponton and how can contractual rights be pursued in case of problems?
EFETnet users do not have any direct contractual relationship with the software developer Ponton. EFETnet uUsers have a contract with EFETnet as exclusive provider of the EFETnet software. However, EFETnet users may establish a direct relationship with Ponton for ancillary services in return for additional payment directly to Ponton. Ancillary services are services not covered by the standard set of services. For example they concern extended maintenance service availability or the development of additional features or updates to the software outside the scope of the EFET standards for example.
In case of problems such as faulty software or deficient services, EFETnet users shall be assisted by EFETnet to pursue contractual rights vis-à-vis Ponton. EFETnet rules provide for strong levels of co-operation between EFETnet and EFETnet users in order to make sure that their contractual rights against Ponton can be pursued.
EFETnet must co-operate with EFETnet users in a professional and proactive manner, or otherwise may incur own liability vis-à-vis EFETnet users. The EFETnet user undertakes to actively co-operate with EFETnet. Users’ rights are thus always safeguarded.
Do EFETnet users have to grant access to their premises?
Our contract protects EFETnet users against field visits of EFETnet or Ponton. Every EFETnet user however is obliged to co-operate in case of malfunction of software towards a resolution of the problem.
What is the security guarantee used for and how can the EFETnet user reclaim the funds upon termination of the contract?
Upon joining EFETnet, a security guarantee of EURO 10.000 must be paid by every new EFETnet user. The security guarantee foresees any potential cash shortage of EFETnet in case of non-payment of license fees.
In case of any dispute over EFETnet services or software, EFETnet shall always receive full payment of monthly fees. EFETnet shall hold the funds in trust for EFETnet users, and keep the funds separate from other EFETnet funds. EFETnet shall not make any payment to Ponton unless instructed to do so by EFETnet user.
In case of termination of the contract, EFETnet shall use the security guarantee to cover outstanding fees and shall return any remaining funds together with a final invoice to the exiting EFETnet user.
How can EFETnet users exit EFETnet and when?
Every EFETnet user acquires the right to use the EFETnet software until the expiry of the first licensing period in December 2007.
In case of faulty software or faulty maintenance services, the EFETnet User has the right to terminate the EFETnet Agreement, if all efforts to fix the deficiencies fail to remedy the problem. The GTC and the Accession Agreement provide for a detailed procedure for these cases.
EFETnet shall co-operate with every EFETnet user to find an amicable solution in case of problems. EFETnet is contractually bound to pursue EFETnet users’ rights at all times.
References to Ponton - does this imply a contractual relationship?
The inclusion of Ponton’s contact details in the Agreement is for information only and no contractual relationship will be created between the signatory and Ponton by virtue of the signatory entering into the Agreement.
The signatory is advised to agree a CA directly with Ponton.
How is EFETnet's right to change the GT&C limited?
(a) EFETnet's right to change the General T&C as set out in Clause 7.3 of the Accession Agreement shall only apply where the change results from a technical change in the EFET Standards in force at the time of such change.
(b) The signatory shall be entitled to terminate the Agreement within two months after receiving a notice from EFETnet detailing any change to the General T&C.
(c) EFETnet shall employ reasonable efforts to find an acceptable situation for the signatory should the signatory need some extension in time before implementing the change. The signatory is aware of the restrictions for EFETnet to grant any specific rights to individual EFETnet users.
What happens to the rights to the EFETnet Software in case of bankruptcy of the software developer?
EFETnet and Ponton agreed to deposit the source code of the EFETnet software with a notary in Hamburg, Germany. In case of bankruptcy of Ponton, EFETnet, and in certain circumstances, the EFETnet user has the right to access this information.
What happens if EFETnet goes bankrupt?
Being owned and used by the industry itself, EFETnet is unlikely to become insolvent. The EFET Board has been committed to EFETnet since its inception and shall ensure its operability at all times. However, the interests of EFETnet users have been safeguarded. The trust agreement with the Hamburg notary also caters for the insolvency of EFETnet and grants access to the source code for EFETnet users subject to well defined terms.
In case of bankruptcy, EFETnet users have the right to terminate the contractual relationship with EFETnet with immediate effect.
