Yes. Exclusions for “consequential loss” are widely used in many sectors in Oman, including the power, energy and other sectors.
Oil and gas
The concession granting instrument for upstream activities in Oman is an exploration and production sharing agreement (EPSA). Although EPSAs are not standardised, usually they include a gas sales agreement in agreed form (appended to the EPSA), which defines “Consequential Loss” and includes exclusion of liability clauses that seek to exclude loss for “Consequential Loss”. The definition of consequential loss is agreed amongst the parties and usually one of the losses listed in such definition is “consequential loss” (undefined). For example:
"10.2 Notwithstanding any other provision of the GSA [Gas Sale Agreement], neither Party (“Initial Party”) shall be liable to the other for any Consequential Loss suffered howsoever caused and even where the same is caused by Wilful Misconduct or Gross Negligence, negligence or breach of duty (statutory or otherwise) on the part of the Initial Party.
‘Consequential Loss’ shall mean any special indirect or consequential loss or damage and any loss of income or profits or business opportunity."
Power
Usually in Omani power and water purchase agreements, the term ”Direct Loss” is defined and “Consequential Loss” is defined as any loss that does not constitute a direct loss.
Example 1
“Consequential Loss means any loss or damages suffered or incurred by a party which does not constitute Direct Loss.
Direct Loss means:
- for the Generator:
- any loss of Electrical Energy Charges and/or Deemed Electrical Energy Charges properly due to it pursuant to the terms of this Agreement; and/or
- any loss or damage sustained or incurred by it as a direct result of damage to property or personal injury; and
- for the Buyer:
- any excess Electrical Energy Charges and/or Deemed Electrical Energy Charges paid by it to the Generator hereunder; and/or
- any loss or damage sustained or incurred by it as a direct result of damage to property or personal injury.
30 Liability
Save to the extent specifically provided otherwise in this Agreement, neither party shall be liable to the other party for any Consequential Loss suffered by such other party as a result of the first party’s breach of this Agreement, save to the extent that such Consequential Loss was suffered or caused by the Wilful Default of such first party.
Each party shall indemnify the other party (and its Affiliates and Contractors and its and their respective directors, officers, employees and agents) from and against any and all Direct Loss suffered by the other party which is a direct result of the first party’s failure to perform or breach of this Agreement.”
Example 2:
“Direct Loss means:
- for the Project Company:
- any loss of Water Output Charges and/or Capacity Charges properly due to it pursuant to the terms of this Agreement; and/or
- any loss or damage sustained or incurred by it as a direct result of damage to property or personal injury; and
- for the Buyer:
- any excess Capacity Charges and/or Water Output Charges paid by it to the Project Company hereunder; and/or
- any loss or damage sustained or incurred by it as a direct result of damage to property or personal injury.
29 Liability
29.1 Save to the extent specifically provided otherwise in this Agreement, neither party shall be liable to the other party for any Consequential Loss suffered by such other party as a result of the first party’s breach of this Agreement, save to the extent that such Consequential Loss was suffered or caused by the Wilful Default of such first party.”
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