LEGAL ISSUE: Interpretation of the term “fuel” in a Power Purchase Agreement (PPA) to determine if it includes Regasified Liquefied Natural Gas (RLNG).
CASE TYPE: Contract Law, Energy Law.
Case Name: Transmission Corporation of Andhra Pradesh Ltd. and Others vs. M/s. GMR Vemagiri Power Generation Ltd. and Another
[Judgment Date]: 16 February 2018
Date of the Judgment: 16 February 2018
Citation: Where available, provide the case citation in the Indian Supreme Court (INSC) format.
Judges: Rohinton Fali Nariman, J. and Navin Sinha, J.
Can a power generation company use Regasified Liquefied Natural Gas (RLNG) if their Power Purchase Agreement (PPA) specifies “natural gas only” as the fuel? The Supreme Court of India recently addressed this question, clarifying the scope of the term “fuel” in a PPA. This case revolved around a dispute between Transmission Corporation of Andhra Pradesh Ltd. and M/s. GMR Vemagiri Power Generation Ltd., concerning whether the term “natural gas” in their PPA included RLNG. The court had to determine if the agreement was limited to natural gas in its natural form or if it extended to include RLNG, a processed variant. The judgment was delivered by a two-judge bench comprising Justice Rohinton Fali Nariman and Justice Navin Sinha, with the majority opinion authored by Justice Navin Sinha.
Case Background
In 1995, the Andhra Pradesh State Electricity Board (predecessor of the appellant) invited bids for power stations using gas, Naphtha, or fuel oil to address power shortages. A Power Purchase Agreement (PPA) was signed on 31 March 1997, with Naphtha as the primary fuel and gas as an alternative. Due to high Naphtha prices, the Andhra Pradesh government shifted to gas as the primary fuel in March 2000. The Ministry of Petroleum allotted 1.64 MMSCMD of natural gas to the respondent from the KG-D6 Basin, leading to a gas supply agreement with GAIL on 31 August 2001. The PPA was amended on 18 June 2003, making gas the primary fuel and Naphtha an alternative. A further amendment on 2 May 2007 restricted the term ‘fuel’ to “natural gas only.”
GAIL could not supply gas as agreed, and the respondent was allowed to buy natural gas from Reliance Industries Ltd (RIL) at GAIL prices. On 7 August 2012 and 27 August 2012, the respondent sought permission to use RLNG as fuel. The appellant rejected this request on 10 September 2012, stating the PPA specified “natural gas only” and did not include RLNG, which was more expensive, thus increasing the per-unit cost of power for consumers.
Timeline
| Date | Event |
|---|---|
| May 1995 | Andhra Pradesh State Electricity Board invites bids for gas/Naphtha/fuel oil based power stations. |
| 31 March 1997 | PPA executed with Naphtha as primary fuel and gas as alternate fuel. |
| March 2000 | Government of Andhra Pradesh decides to make gas the primary fuel. |
| 5 June 2000 | Ministry of Petroleum allots natural gas to the respondent from KG-D6 Basin. |
| 31 August 2001 | Gas supply agreement between the respondent and GAIL. |
| 18 June 2003 | PPA amended, making gas primary fuel and Naphtha alternate fuel. |
| 2 May 2007 | PPA amended, restricting ‘fuel’ to “natural gas only”. |
| 7 August 2012 | Respondent seeks permission to use RLNG as fuel. |
| 27 August 2012 | Respondent again seeks permission to use RLNG as fuel. |
| 10 September 2012 | Appellant rejects the request to use RLNG. |
| 8 August 2013 | Andhra Pradesh Electricity Regulatory Commission (Commission) holds that ‘fuel’ means natural gas only. |
| 30 June 2014 | Appellate Tribunal holds that ‘natural gas’ includes RLNG. |
| 16 February 2018 | Supreme Court reverses the Appellate Tribunal’s decision and affirms the Commission’s order. |
Course of Proceedings
The Andhra Pradesh Electricity Regulatory Commission (the Commission) in O.P. No. 20 of 2013 dated 08.08.2013, held that the term ‘fuel’ in the PPA meant natural gas only, not including RLNG. The Commission reasoned that while natural gas and RLNG have similar compositions, this did not entitle the respondent to use the more expensive RLNG, which would increase the cost of power for consumers.
In Appeal No. 222 of 2013, the Appellate Tribunal, on 30 June 2014, held that the word “only” after “natural gas” in the PPA was meant to exclude other alternate fuels like Naphtha and not to exclude RLNG, which it considered a variant of natural gas. The Tribunal also noted that the higher price of RLNG was an accepted risk, especially given the non-availability of natural gas from the KG-D6 basin.
Legal Framework
The core of the dispute revolves around the interpretation of the term “fuel” as defined in clause 1.1.27 of the Power Purchase Agreement (PPA). The relevant clauses from the three PPAs are:
- PPA dated 31.03.1997: “Fuel: means gas, Naptha, low sulphur heavy stock or furnace oil, and the like, that is intended to be used as primary fuel, by one or more units of the Project to generate power from the Project or in case of unavailability of Naptha any of the above as alternate fuel.”
- Amendment Agreement to the PPA dated 18.06.2003: “Fuel: means Natural Gas that is intended to be used as primary fuel by one or more units of the project to generate or in case of unavailability of primary fuel, Naptha or Low Sulphur heavy stock and the like as alternate fuel.”
- Amendment Agreement dated 02.05.2007: “Fuel: means Natural Gas only.”
The Petroleum and Natural Gas Regulatory Board Act, 2006 (PNGRB Act), Section 2(za)(i) defines natural gas to include both liquefied natural gas (LNG) and RLNG. However, this definition’s relevance to the PPA was contested.
Arguments
Appellant’s Arguments:
- The appellant argued that the PPA intended only natural gas in its natural form to be used as fuel.
- RLNG, despite being a variant of natural gas, does not fall within the definition of fuel under the PPA.
- The cost of RLNG, being three to four times higher than natural gas, was a significant factor indicating that RLNG was not intended to be included.
- The word ‘fuel’ should be given its natural meaning, confined to natural gas only, as intended by the parties.
- The definition of fuel could not be extended to include RLNG, as the parties never intended it.
- There was no ambiguity in the language of the PPA that would warrant the inclusion of RLNG.
- RLNG is not synonymous with natural gas in the business and is not interchangeable due to additional processes and higher costs.
- The significance of the word “only” after “natural gas” in the PPA dated 02.05.2007 cannot be ignored.
- The fact that RLNG was permitted for short durations under special circumstances does not mean it was intended to be included in the term natural gas.
- The respondent sought permission to use RLNG, which shows that even they did not consider it to be included within the term natural gas.
- Contract documents must be interpreted based on the language used and the context in which they were prepared.
Respondent’s Arguments:
- The respondent argued that the original bid documents allowed for fuel imports, and fuel tie-up was the bidder’s responsibility.
- The respondent had invested a significant amount in setting up the power plant, which has operated intermittently.
- The appellant was aware of potential gas price hikes and that gas prices would be market-driven.
- The higher cost of RLNG should not exclude it from the definition of natural gas.
- RLNG is a form of natural gas, compressed for transportation and regasified before use.
- The deletion of the words “intended to be used” in the second PPA and replacement with “natural gas only” in the third PPA gave a wider meaning to natural gas, including RLNG.
- The deletion of “importation charges” in the PPA dated 18.06.2003 was not significant as RLNG was to be delivered at the project site, inclusive of importation costs.
- The term natural gas has not been defined under the PPA.
- The definition of natural gas in Section 2(za)(i) of the PNGRB Act includes both LNG and RLNG.
- The appellant had previously permitted the use of RLNG, demonstrating that it was never intended to be excluded under the PPA.
- The respondent had only given intimation about the use of RLNG and not sought permission.
- The appellant’s actions were a form of waiver, and they cannot approbate and reprobate.
- The plea that RLNG power is more costly is incorrect, as the appellant is now purchasing power at higher rates.
Submissions Table
| Main Submission | Sub-Submission (Appellant) | Sub-Submission (Respondent) |
|---|---|---|
| Definition of “Fuel” | “Fuel” means natural gas in its natural form only, excluding RLNG. | “Natural gas” includes RLNG, as it is a variant of natural gas. |
| The word “only” in the PPA restricts the meaning of “natural gas”. | The word “only” excludes other alternate fuels like Naphtha, not RLNG. | |
| Cost of RLNG is a factor to exclude it from the agreement. | Higher cost of RLNG is an accepted risk. | |
| RLNG and natural gas are not interchangeable in business. | RLNG is a form of natural gas, compressed for transport. | |
| Intention of Parties | Parties never intended to include RLNG in the term “natural gas”. | Parties intended to include RLNG within the ambit of “natural gas”. |
| Absence of discussion on RLNG in PPA amendments indicates exclusion. | Deletion of “importation charges” is insignificant. | |
| Respondent’s request for permission to use RLNG shows it was not included. | Respondent’s letters were mere intimations, not requests for permission. | |
| Previous Conduct | Sporadic use of RLNG under special circumstances cannot be the norm. | Appellant permitted use of RLNG on multiple occasions. |
| Appellant cannot approbate and reprobate. | ||
| Interpretation of Contract | Contract should be interpreted based on language and context. | Technical interpretation of “natural gas” includes RLNG. |
| Relevance of PNGRB Act | Definition of natural gas under PNGRB Act is irrelevant. | Definition of natural gas under PNGRB Act includes RLNG. |
Issues Framed by the Supreme Court
The main issue before the Supreme Court was:
- Whether the word ‘fuel’ as used in clause 1.1.27 of the Power Purchase Agreement (PPA) means “natural gas only” or includes Regasified Liquefied Natural Gas (RLNG) also.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
| Issue | Court’s Decision | Brief Reasoning |
|---|---|---|
| Whether the word ‘fuel’ as used in clause 1.1.27 of the PPA means “natural gas only” or includes RLNG also. | The term ‘fuel’ means “natural gas only” and does not include RLNG. | The court held that the intention of the parties was to use natural gas in its natural form and not RLNG, based on the language of the PPA, the surrounding circumstances, and the conduct of the parties. The court also noted the cost difference between natural gas and RLNG and that RLNG was not considered by the parties at the time of the agreement. |
Authorities
The Supreme Court considered the following authorities:
Cases:
- Polymat India (P) Ltd. & Anr. vs. National Insurance Co. Ltd. & Ors., 2005 (9) SCC 174 – The court relied on this case to emphasize the importance of interpreting a contract based on its language and context.
- Gedela Satchidananda Murthy vs. Dy. Commissioner, Endowments Department, A.P. & Ors., 2007 (5) SCC 677 – The court cited this case to highlight how the parties’ conduct and course of dealing can influence the interpretation of a contract.
- Timblo Irmaos Ltd., Margo vs. Jorge Anibal Matos Sequeira & Anr., 1977 (3) SCC 474 – This case was used to support the principle that a contract should be interpreted based on the surrounding circumstances.
- Sappani Mohamed Mohideen and Anr. vs. R.V. Sethusubramania Pillai and Ors., 1974 (1) SCC 615 – The court used this case to emphasize the importance of giving plain meaning to the terms of a contract.
- Trutuf Safety Glass Industries vs. Commissioner of Sales Tax, U.P., (2007) 7 SCC 242 – This case was cited to illustrate that a technical view of an agreement, torn out of context, cannot be taken to reinterpret the agreement.
- The Union of India vs. M/s. D.N. Revri and Co. and Ors., 1976 (4) SCC 147 – The court used this case to emphasize that the intention of the parties must be ascertained from the language they have used.
- Nabha Power Ltd. vs. Punjab State Power Corporation Ltd. & Anr., 2017 SCC Online 1239 – This case was cited to support the principle that a contract should be interpreted based on its efficacy.
- Bharat Aluminum Company vs. Kaiser Aluminum Technical Services Inc., 2016 (4) SCC 126 – The court relied on this case to emphasize that a contract should be interpreted based on the understanding of the parties.
- Khardah Company Ltd. vs. Raymon & Co. (India) Private, Ltd., 1963 (3) SCR 183 – This case was used to emphasize that a contract should be read as a whole and that implied terms can be deduced from the words used.
- Bank of India & Anr. vs. K. Mohandas & Ors., (2009) 5 SCC 313 – This case was cited to emphasize that the true construction of a contract must depend upon the words used and not what the parties say afterwards.
- Bihar State Electricity Board vs. Green Rubber Industries, (1990) 1 SCC 731 – The court relied on this case to highlight that every contract must be considered with reference to its object and the whole of its terms.
- Satya Jain (D) thr. Lrs. & Ors. vs. Anis Ahmed Rushdie (D) thr. Lrs. & Ors., (2013) 8 SCC 131 – This case was cited to explain the principle of business efficacy and when a term can be implied in a contract.
- Association of Natural Gas & Ors. vs. Union of India & Ors., 2004 (4) SCC 489 – The court stated that the definition of natural gas in this case was in the context of legislative entry and not relevant to the interpretation of the PPA.
Statutes:
- Section 21(5) of the Andhra Pradesh Electricity Reforms Act, 1998 – The court referred to this section to discuss the proceedings before the Commission during the amendments to the PPA.
- Section 11 of the Electricity Act, 2003 – The court mentioned this section in the context of the special orders that allowed the use of RLNG for short durations.
- Section 2(za)(i) of the Petroleum and Natural Gas Regulatory Board Act, 2006 (PNGRB Act) – The court discussed the definition of natural gas under this section but found it not relevant to the interpretation of the PPA.
Authority Consideration Table
| Authority | Court | How the Authority was Used |
|---|---|---|
| Polymat India (P) Ltd. & Anr. vs. National Insurance Co. Ltd. & Ors., 2005 (9) SCC 174 | Supreme Court of India | Emphasized the importance of interpreting a contract based on its language and context. |
| Gedela Satchidananda Murthy vs. Dy. Commissioner, Endowments Department, A.P. & Ors., 2007 (5) SCC 677 | Supreme Court of India | Highlighted how the parties’ conduct and course of dealing can influence the interpretation of a contract. |
| Timblo Irmaos Ltd., Margo vs. Jorge Anibal Matos Sequeira & Anr., 1977 (3) SCC 474 | Supreme Court of India | Supported the principle that a contract should be interpreted based on the surrounding circumstances. |
| Sappani Mohamed Mohideen and Anr. vs. R.V. Sethusubramania Pillai and Ors., 1974 (1) SCC 615 | Supreme Court of India | Emphasized the importance of giving plain meaning to the terms of a contract. |
| Trutuf Safety Glass Industries vs. Commissioner of Sales Tax, U.P., (2007) 7 SCC 242 | Supreme Court of India | Illustrated that a technical view of an agreement, torn out of context, cannot be used to reinterpret the agreement. |
| The Union of India vs. M/s. D.N. Revri and Co. and Ors., 1976 (4) SCC 147 | Supreme Court of India | Emphasized that the intention of the parties must be ascertained from the language they have used. |
| Nabha Power Ltd. vs. Punjab State Power Corporation Ltd. & Anr., 2017 SCC Online 1239 | Supreme Court of India | Supported the principle that a contract should be interpreted based on its efficacy. |
| Bharat Aluminum Company vs. Kaiser Aluminum Technical Services Inc., 2016 (4) SCC 126 | Supreme Court of India | Emphasized that a contract should be interpreted based on the understanding of the parties. |
| Khardah Company Ltd. vs. Raymon & Co. (India) Private, Ltd., 1963 (3) SCR 183 | Supreme Court of India | Emphasized that a contract should be read as a whole and that implied terms can be deduced from the words used. |
| Bank of India & Anr. vs. K. Mohandas & Ors., (2009) 5 SCC 313 | Supreme Court of India | Emphasized that the true construction of a contract must depend upon the words used and not what the parties say afterwards. |
| Bihar State Electricity Board vs. Green Rubber Industries, (1990) 1 SCC 731 | Supreme Court of India | Highlighted that every contract must be considered with reference to its object and the whole of its terms. |
| Satya Jain (D) thr. Lrs. & Ors. vs. Anis Ahmed Rushdie (D) thr. Lrs. & Ors., (2013) 8 SCC 131 | Supreme Court of India | Explained the principle of business efficacy and when a term can be implied in a contract. |
| Association of Natural Gas & Ors. vs. Union of India & Ors., 2004 (4) SCC 489 | Supreme Court of India | Stated that the definition of natural gas in this case was in the context of legislative entry and not relevant to the interpretation of the PPA. |
Judgment
How each submission made by the Parties was treated by the Court?
| Submission | Court’s Treatment |
|---|---|
| Appellant’s submission that “fuel” means natural gas in its natural form only, excluding RLNG. | Accepted. The Court held that the PPA intended to use natural gas in its natural form and not RLNG. |
| Appellant’s submission that cost of RLNG is a factor to exclude it from the agreement. | Accepted. The Court noted that the cost difference between natural gas and RLNG was a significant factor in the PPA. |
| Appellant’s submission that RLNG and natural gas are not interchangeable in business. | Accepted. The Court agreed that RLNG and natural gas are not synonymous or interchangeable due to additional processes and higher costs. |
| Appellant’s submission that the parties never intended to include RLNG in the term “natural gas”. | Accepted. The Court concluded that the parties never intended to include RLNG in the term “natural gas” based on the surrounding circumstances and conduct of the parties. |
| Appellant’s submission that the respondent’s request for permission to use RLNG shows it was not included. | Accepted. The Court noted that the respondent’s letters seeking permission to use RLNG showed they did not consider it to be included in the definition of “natural gas”. |
| Appellant’s submission that the contract should be interpreted based on language and context. | Accepted. The Court agreed that the contract should be interpreted based on the language used and the context in which it was prepared. |
| Appellant’s submission that the definition of natural gas under PNGRB Act is irrelevant. | Accepted. The Court held that the definition of natural gas under the PNGRB Act was not relevant to the interpretation of the PPA. |
| Respondent’s submission that “natural gas” includes RLNG, as it is a variant of natural gas. | Rejected. The Court held that the term “natural gas” in the PPA was limited to natural gas in its natural form and did not include RLNG. |
| Respondent’s submission that the word “only” excludes other alternate fuels like Naphtha, not RLNG. | Rejected. The Court held that the word “only” was meant to restrict the definition of “fuel” to natural gas only. |
| Respondent’s submission that the higher cost of RLNG is an accepted risk. | Rejected. The Court noted that the cost difference between natural gas and RLNG was a significant factor in the PPA. |
| Respondent’s submission that the parties intended to include RLNG within the ambit of “natural gas”. | Rejected. The Court concluded that the parties never intended to include RLNG in the term “natural gas”. |
| Respondent’s submission that the deletion of “importation charges” is insignificant. | Rejected. The Court noted that the deletion of the importation clause in the PPA indicated that RLNG was not intended to be included. |
| Respondent’s submission that the respondent’s letters were mere intimations, not requests for permission. | Rejected. The Court held that the respondent’s letters seeking permission to use RLNG showed they did not consider it to be included in the definition of “natural gas”. |
| Respondent’s submission that the appellant permitted the use of RLNG on multiple occasions. | Rejected. The Court held that the sporadic use of RLNG under special circumstances could not be the norm. |
| Respondent’s submission that the technical interpretation of “natural gas” includes RLNG. | Rejected. The Court held that the technical interpretation of “natural gas” under the PNGRB Act was not relevant to the interpretation of the PPA. |
How each authority was viewed by the Court?
- The court used Polymat India (P) Ltd. & Anr. vs. National Insurance Co. Ltd. & Ors., [2005 (9) SCC 174]* to emphasize the importance of interpreting a contract based on its language and context.
- The court used Gedela Satchidananda Murthy vs. Dy. Commissioner, Endowments Department, A.P. & Ors., [2007 (5) SCC 677]* to highlight how the parties’ conduct and course of dealing can influence the interpretation of a contract.
- The court used Timblo Irmaos Ltd., Margo vs. Jorge Anibal Matos Sequeira & Anr., [1977 (3) SCC 474]* to support the principle that a contract should be interpreted based on the surrounding circumstances.
- The court used Sappani Mohamed Mohideen and Anr. vs. R.V. Sethusubramania Pillai and Ors., [1974 (1) SCC 615]* to emphasize the importance of giving plain meaning to the terms of a contract.
- The court used Trutuf Safety Glass Industries vs. Commissioner of Sales Tax, U.P., [(2007) 7 SCC 242]* to illustrate that a technical view of an agreement, torn out of context, cannot be taken to reinterpret the agreement.
- The court used The Union of India vs. M/s. D.N. Revri and Co. and Ors., [1976 (4) SCC 147]* to emphasize that the intention of the parties must be ascertained from the language they have used.
- The court used Nabha Power Ltd. vs. Punjab State Power Corporation Ltd. & Anr., [2017 SCC Online 1239]* to support the principle that a contract should be interpreted based on its efficacy.
- The court used Bharat Aluminum Company vs. Kaiser Aluminum Technical Services Inc., [2016 (4) SCC 126]* to emphasize that a contract should be interpreted based on the understanding of the parties.
- The court used Khardah Company Ltd. vs. Raymon & Co. (India) Private, Ltd., [1963 (3) SCR 183]* to emphasize that a contract should be read as a whole and that implied terms can be deduced from the words used.
- The court used Bank of India & Anr. vs. K. Mohandas & Ors., [(2009) 5 SCC 313]* to emphasize that the true construction of a contract must depend upon the words used and not what the parties say afterwards.
- The court used Bihar State Electricity Board vs. Green Rubber Industries, [(1990) 1 SCC 731]* to highlight that every contract must be considered with reference to its object and the whole of its terms.
-
The court used Satya Jain (D) thr. Lrs. & Ors. vs. Anis Ahmed Rushdie (D) thr. Lrs. & Ors., [(2013) 8 SCC 131]“`html
* to explain the principle of business efficacy and when a term can be implied in a contract. - The court stated that the definition of natural gas in Association of Natural Gas & Ors. vs. Union of India & Ors., [2004 (4) SCC 489]* was in the context of legislative entry and not relevant to the interpretation of the PPA.
The Supreme Court, therefore, reversed the Appellate Tribunal’s decision and affirmed the Commission’s order. The Court held that the term ‘fuel’ in the PPA meant “natural gas only” and did not include RLNG.
Ratio Decidendi
The Supreme Court’s decision was based on the following key principles:
- Literal Interpretation: The court emphasized that contracts should be interpreted based on the plain meaning of the words used. The term “natural gas only” was interpreted to mean natural gas in its natural form, excluding RLNG.
- Intention of Parties: The court considered the intention of the parties at the time of the agreement. The court concluded that the parties never intended to include RLNG within the definition of ‘natural gas’ as it was not discussed during the PPA amendments.
- Commercial Context: The court also considered the commercial context of the agreement. The significant cost difference between natural gas and RLNG was a key factor in determining that RLNG was not intended to be included.
- Conduct of Parties: The conduct of the parties, especially the respondent’s request for permission to use RLNG, was considered as evidence that RLNG was not considered to be included in the definition of “natural gas”.
- Relevance of Statutory Definitions: The court clarified that the definition of natural gas in the PNGRB Act was not relevant to the interpretation of the PPA. The definition of natural gas in the Act was in the context of legislative entry and not for the interpretation of the contract.
Obiter Dicta
While the primary focus of the judgment was on the interpretation of the term “fuel” in the specific PPA, the court also made some observations that can be considered as obiter dicta:
- The Court suggested that parties should be careful in drafting contracts to avoid ambiguities.
- The Court highlighted the importance of considering the commercial implications of contract terms.
- The Court emphasized that the conduct of parties can be a significant factor in contract interpretation.
Impact of the Judgment
The Supreme Court’s judgment has significant implications for the energy sector in India:
- Clarity on Contractual Terms: The judgment provides clarity on the interpretation of the term “fuel” in PPAs, specifically when “natural gas only” is specified.
- Cost Implications: The judgment highlights the importance of cost considerations in contract interpretation. It makes it clear that the cost difference between natural gas and RLNG is a significant factor.
- Contract Drafting: The judgment emphasizes the need for precise and unambiguous language in contract drafting.
- Energy Sector: The judgment has implications for power generation companies and their contractual obligations, particularly concerning fuel usage.
- Future Disputes: The judgment serves as a precedent for resolving similar disputes related to contract interpretation in the energy sector.
Flowchart of the Case
PPA specifies “natural gas only” as fuel
↓
Power company seeks to use RLNG
↓
Dispute arises over the definition of “fuel”
↓
Andhra Pradesh Electricity Regulatory Commission (Commission) rules against RLNG
↓
Appellate Tribunal rules in favor of RLNG
↓
Supreme Court rules against RLNG, affirming the Commission’s order
Ratio Table
| Ratio | Description |
|---|---|
| Literal Interpretation | Contracts should be interpreted based on the plain meaning of the words used. |
| Intention of Parties | The intention of the parties at the time of the agreement is paramount. |
| Commercial Context | The commercial context of the agreement, including cost implications, is a key factor in interpretation. |
| Conduct of Parties | The conduct of the parties can be considered as evidence of their understanding of the contract. |
| Statutory Definitions | Statutory definitions may not be relevant to the interpretation of a contract unless specifically incorporated. |
Source: Natural Gas Only, excludes RLNG