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4. THE CONTRACT FOR SUPPLY OF TECHNOLOGY AND EQUIPMENT
4. THE CONTRACT FOR SUPPLY OF TECHNOLOGY AND EQUIPMENT
(There is a big difference between Chinese and English versin)
Whole Doc.
This Agreement is made the day of
Between
(1) a corporation incorporated under the laws of and
having its principal place of business at ("the Buyer") and
(2) a corporation incorporated under the laws of and
having its principal place of business at ("the Supplier")
Whereas the Buyer desires to construct and complete a plant at
with design and engineering of the Supplier and to purchase an
equipment or facility for ("the Contract Plant") and obtain from
the Supplier a license on and the Supplier has agreed to such
works and services upon and subject to the terms and conditions
hereinafter appearing.
Now it is hereby agreed as follows:
PART 1 Contract and Interpretation
Article 1. Definitions
The following words and expressions shall have the meanings hereby
assigned to them:
"Acceptance" means the acceptance by the Buyer of the Contract Plant
which certifies the Supplier's fulfillment of the Contract in respect of
any Performance Test required thereunder in accordance with Article 25.3
(Acceptance) hereof.
"Commissioning" means the operation of the Contract Plant or any part
thereof by the Buyer following the Precommissioning pursuant to Article 24
(Erection and Precommissioning) hereof, which operation is to be carried
out by the Buyer as provided in Article 25.1 (Commissioning) hereof, for
the purpose of carrying out the Performance Test.
"Contract" means this Agreement entered into between the Buyer and the
Supplier, and the Contract Documents shall together constitute the
Contract, and the term "the Contract" shall in all such documents be
construed accordingly.
"Contract Documents" means this Agreement and all Appendices hereto
(including any amendments thereto), and each shall be read and construed
as an integral part of the Contract between the Buyer and the Supplier.
"Contract Plant" means the plant or facility named in this Agreement
and more particularly described in the Appendix 7-2 (Technical
Specifications) hereto to be designed and engineered by the Supplier and
to be constructed by the Buyer under the Contract.
"Contract Price" means the sum specified in Article 12.1.1 hereof,
subject to such additions and adjustments thereto or deductions therefrom
as may be made pursuant to the Contract.
"day" means calendar day of the Gregorian Calendar.
"Defect Liability Period" means the period of validity of the
guarantees given by the Supplier as specified in Article 27.1 (Guarantees
and Defect Liability Period) hereof, during which the Supplier is
responsible for defects, errors or mistakes with respect to the Equipment,
the Technical Documents or the Technical Services, as provided in Articles
27.2, 27.3 and 27.4 hereof respectively.
"Effective Date" means the date that the Contract enters into full
force and effect upon fulfillment of all the conditions stated in Article
4 (Effective Date) hereof.
"Equipment" means the equipment, machinery, apparatuses, facilities or
their spare parts as listed in Appendix 7-1 (Scope of Works and Supply)
hereto which are to be supplied by the Supplier and which are to be
incorporated by the Buyer under the Contract in such major and important
part of the Contract Plant as may be crucial to its performance.
"Expert" means any person who may be appointed from time to time by
agreement between the Buyer and the Supplier to make a decision on or to
settle any dispute or difference between the Buyer and the Supplier
referred to him by the parties pursuant to Article 7.2 (Reference to
Expert) hereof.
"Last Major Shipment" means the last shipment of the basic lot of the
Equipment as specified in Article 22.2 (Delivery) hereof.
"month" means calendar month of the Gregorian Calendar.
"Buyer's Representative" means any person appointed by the Buyer in
the manner provided in Article 18.1 (Buyer's Representative) hereof to
perform the duties delegated by the Buyer.
"Performance Test" means the test specified in Article 25.2
(Performance Test), to be carried out to ascertain whether the Contract
Plant or a specified part thereof is able to attain the Process
Performance Guarantees specified in Appendix 5 (Process Performance
Guarantees) hereto in accordance with the provisions of Article 25.2
(Performance Test) hereof.
"Precommissioning" means the testing, checking and other works
specified in Article 24 (Erection and Precommissioning) which are to be
carried out by the Buyer in preparation for the Commissioning.
"Sub-contractor" means any person to whom execution of any part of the
Works, including preparation of any design or supply of any Equipment, is
sub-contracted directly or indirectly by the Supplier, and includes its
legal successors or permitted assigns.
"Supplier's Engineer" means any person nominated by the Supplier and
assigned to the Contract Plant to provide the Technical Services.
"Supplier's Representative" means any person nominated by the Supplier
in the manner provided in Article 18.2 (Supplier's Representative) hereof
to perform the duties delegated by the Supplier.
"Technical Documents" means design, drawings, specifications, parts
list, calculations, manuals and instructions for installation, operation
or maintenance and test certificates, barchart programme which are
relevant to the Works and are to be provided by the Supplier, listed in
Appendix 7-1 (Scope of Works and Supply) hereto.
"Technical Services" means the technical services provided by the
Supplier's Engineer at the Contract Plant, pursuant to Appendix 7-5 (The
Supplier's Engineer's Technical Services and Working Conditions) hereto.
"Technical Service Fee" means the fee for the Technical Services as
specified in Article 12 (Contract Price and Technical Service Fee) hereof.
"Time for Delivery" means the time within which each batch of the
Technical Documents or each lot of the Equipment is to be delivered to the
Buyer by the Supplier in accordance with Articles 21.5 (Delivery of
Technical Documents) and 22.2 (Delivery) hereof and the relevant
provisions of the Contract.
"Works" means the supply of the Equipment and performance of the
design and engineering of the Equipment and the Contract Plant, the
Technical Services, and any other works and services to be carried out by
the Supplier under the Contract as specified in Appendix 7-1 (Scope of
Works and Supply) hereto.
Article 2. Contract Documents
2.1 Contract Documents
Subject to Article 2.2 (Order of Precedence) hereof, this Agreement
and the Appendices (and parts thereof) hereto are intended to be
correlative, complementary and mutually explanatory of one another. The
Contract shall be read as a whole.
2.2 Order of Precedence
In the event of any ambiguity or conflict between this Agreement and
the Appendices, this Agreement shall precede the Appendices.
Article 3. Interpretation
3.1 Language
3.1.1 All Contract Documents and all correspondence and communications
to be given and all other documentation to be prepared and supplied under
the Contract shall be written in the governing language specified in
Article 6 (Governing Law and Language) hereof and the Contract shall be
construed and interpreted in accordance with that language.
3.1.2 If any of the Contract Documents is prepared in any language in
addition to the governing language, the Contract Documents in the
governing language shall prevail, unless otherwise specified in Article 6
(Governing Law and Language) hereof.
3.2 Singular and Plural
The singular shall include the plural and the plural the singular
except where the context otherwise requires.
3.3 Headings
The headings and marginal notes in the Contract Documents are included
for ease of reference, and shall not constitute a part of the Contract,
nor affect its interpretation.
3.4 Persons
Words importing persons or parties shall include firms, corporations
and government entities.
3.5 Incoterms
"Incoterms" means the international rules for the interpretation of
trade terms published by the International Chamber of Commerce (1990
edition).
Unless inconsistent with any provision of the Contract, the meaning of
any shipping term and the rights and obligations of the parties thereunder
shall be as ascribed by "Incoterms".
3.6 Entire Agreement
Subject to Article 17.4 hereof, the Contract constitutes the entire
agreement between the Buyer and the Supplier with respect to the subject
matter of the Contract and supersedes all communications, negotiations and
agreements (whether written or oral) of the parties with respect thereto
made prior to the signing date of this Agreement.
3.7 Amendment
No amendment or other variation of the Contract shall be effective
unless it is in writing, is dated, expressly refers to the Contract, and
is signed by a duly authorized representative of each party hereto.
3.8 Independent Contractor
The Supplier shall be an independent contractor performing the
Contract. The Contract does not create any agency, partnership, joint
venture or other joint relationship between the parties hereto.
Subject to the provisions of the Contract, the Supplier shall be
solely responsible for the manner in which the Works are performed. All
employees, representatives or Sub-contractor engaged by the Supplier in
connection with the performance of the Contract shall be under the
complete control of the Supplier and shall not be deemed to be employees
of the Buyer, and nothing contained in the Contract or in any sub-contract
awarded by the Supplier shall be construed to create any contractual
relationship between any such employees, representatives or Sub-contractor
and the Buyer.
3.9 Non-Waiver
3.9.1 Subject to Article 3.9.2 below, no relaxation, forbearance,
delay or indulgence by either party in enforcing any of the terms and
conditions of the Contract or the granting of time by either party to the
other shall prejudice, affect or restrict the rights of that party under
the Contract, nor shall any waiver by either party of any breach of the
Contract operate as a waiver of any subsequent or continuing breach of the
Contract.
3.9.2 Any waiver of a party's rights, powers or remedies under the
Contract must be in writing, dated and signed by an authorized
representative of the party granting such waiver, and must specify the
right and the extent to which it is being waived.
3.10 Severability
If any provision or condition of the Contract is prohibited or
rendered invalid or unenforceable, such prohibition, invalidity or
unenforceability shall not affect the validity or enforceability of any
other provisions and conditions of the Contract.
Article 4. Effective Date
4.1 The Contract shall enter into full force and effect on the date
when all of the following conditions have been fulfilled:
(1) this Agreement has been duly executed for and on behalf of the
Buyer and the Supplier;
(2) acquisition by the Supplier of an export licence from its
government authorities;
(3) acquisition by the Buyer of an import licence from its government
authorities;
(4) issue of the letter of credit and the letter of guarantee as
specified in Article 13 (Terms of Payment) hereof; and
(5) ......
Each party shall use its best efforts to fulfill the above conditions
for which it is responsible as soon as practicable.
4.2 If the Contract has not become effective pursuant to Article 4.1
above within months from the date of signing this Agreement due to
reasons not attributable to the Supplier, the parties shall discuss and
agree on an equitable adjustment to the Contract Price and the Time for
Delivery and/or other relevant conditions of the Contract.
Article 5. Notices
5.1 All notices to be given under the Contract shall be sent to the
Buyer or the Supplier, as the case may be, at the address set forth below:
To the Buyer:
Attention:
To the Supplier:
Attention:
Unless otherwise stated in the Contract, all notices to be given under
the Contract shall be in writing, and sent by personal delivery, airmail
post, special courier, cable, telegraph, telex, facsimile or Electronic
Data Interchange (EDI) to the address of the relevant party set out above,
provided that:
5.1.1 Any notice sent by cable, telegraph, telex, facsimile or EDI
shall be confirmed within two (2) days after dispatch by notice sent by
airmail post or special courier, except as otherwise specified in the
Contract.
5.1.2 Any notice sent by airmail post or special courier shall be
deemed (in the absence of evidence of earlier receipt) to have been
delivered ten (10) days after dispatch and in proving the fact of dispatch
it shall be sufficient to show that the envelope containing such notice
was properly addressed, stamped and conveyed to the postal authorities or
courier service for transmission by airmail or special courier.
5.1.3 Any notice delivered personally or sent by cable, telegraph,
telex, facsimile or EDI shall be deemed to have been delivered on the date
of its dispatch.
5.1.4 Either party may by ten (10) days' notice to the other party in
writing change its postal, cable, telex, facsimile or EDI address or
addressee for receipt of such notices.
5.2 In this Article, notices shall include any approvals, consents,
instructions, orders and certificates to be given under the Contract.
Article 6. Governing Law and Language
6.1 The governing law of the Contract shall be the laws of .
6.2 The governing language of the Contract shall be English.
Article 7. Settlement of Disputes
7.1 Arbitration
7.1.1 If any dispute or difference of any kind whatsoever shall arise
between the Buyer and the Supplier in connection with or arising out of
the Contract including without prejudice to the generality of the
foregoing any question regarding its existence, validity or termination or
the execution of the Works, whether during the progress of the Works or
after their completion and whether before or after the termination,
abandonment or breach of the Contract, the parties shall seek to resolve
any such dispute or difference by mutual consultation.
7.1.2 If the parties fail to solve such dispute or difference by
mutual consultation, then either party may give to the other party a
notice that a dispute or difference exists, specifying its nature, the
point (s) in issue and its intention to refer the dispute to arbitration.
If the parties fail to resolve such dispute or difference by further
consultation within a period of thirty (30) days from the date upon which
such notice of dispute has been given, the dispute or difference shall be
referred to and finally settled by arbitration under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce
(ICC) by one or more arbitrators (not to exceed three) who shall be
appointed under such rules. The award of the arbitrator(s) shall be final
and binding on the parties.
7.1.3 If the tribunal shall consist of three arbitrators, one of them
shall be nominated by each party and the third shall be chosen by mutual
agreement by the parties within thirty (30) days of the nomination of the
last of the two arbitrators nominated by the parties. If the parties fail
to agree upon the third arbitrator within such period, the said third
arbitrator shall be nominated in accordance with the rules agreed by the
Buyer and the Supplier under Article 7.1.2 above.
7.1.4 The place of the arbitration shall be (name of a
third country).
7.1.5 The language of the arbitration shall be the language specified
in Article 6 hereof.
7.2 Reference to Expert
7.2.1 Notwithstanding the provisions of Article 7.1 (Arbitration)
above save insofar as they relate to mutual consultation, either party may
give a notice to the other of its desire to refer to an Expert any dispute
or difference falling within any one or more of the categories set out at
(a) to (g) (inclusive) below. On each such occasion and within fourteen
(14) days of such notice being given or such longer period as the parties
may agree, the parties may by mutual agreement:
(i) appoint an Expert to which the dispute or difference shall be
referred; or
(ii) request the International Chamber of Commerce (ICC) acting
through its International Centre for Technical Expertise (ICTE) to appoint
an Expert to which the dispute or difference shall be referred, which
appointment will be made within twenty-one (21) days of the request being
made to the ICTE.
If the parties fail to reach agreement on either of paragraphs (i) or
(ii) above within the above specified period, the dispute or difference
shall not be referred to an Expert, without prejudice to the right of
either party to refer such dispute or difference to arbitration forthwith
in accordance with Article 7.1 (Arbitration) above.
The relevant disputes or differences which may be referred to such
Expert shall include a dispute or difference:
(a) that may arise concerning approval of design provided in Article
21 (Design and Engineering) hereof; or
(b) that may arise concerning a change in the Works provided in
Article 36 (Change in Works) hereof, including the grant of an extension
of time, extra payment to the Supplier and any amendment or modification
to the Supplier; or
(c) that may arise concerning the valuation of any additional cost or
expense incurred by the Supplier and/or any additional time required as a
result of the suspension provided in Article 38 (Suspension) hereof; or
(d) that may arise concerning the certification of sums allegedly due
to the Supplier; or
(e) that may arise concerning the results of test and/or inspection
provided in Article 23 (Test and Inspection) hereof; or
(f) that may arise as to whether Time for Delivery under Article 22
(Supply and Delivery) hereof is attained, whether the Buyer's failure to
issue an Acceptance Certificate under Article 25. 3 (Acceptance) hereof is
justified, or what extensions of time under Article 37 (Extension of Time
for Delivery) hereof should be given; or
(g) any other dispute or difference which the parties specifically
agree from time to time to refer to the Expert.
7.2.2 The Expert shall inform the parties of his decision in writing
within thirty (30) days of the closing of submissions made to him by the
parties and in any event within sixty (60) days of the date of his
appointment.
7.2.3 If either party is not satisfied with a decision by the Expert
as provided in Article 7.2.2 above, such party may within fourteen (14)
days after receipt of such decision give a notice to the other party
stating that it will not abide by such decision. In this case, such
dispute or difference may be referred to and finally settled by
arbitration pursuant to Article 7.1 (Arbitration) hereof.
If neither party gives such notice to the other party within fourteen
(14) days after receipt of such decision, such decision shall become final
and binding on the parties.
7.2.4 Unless the parties agree otherwise, the proper fees and costs of
the Expert shall be shared equally by the parties.
7.2.5 If any dispute or difference is referred to an Expert hereunder,
neither party shall refer such dispute or difference to arbitration until
either (a) the Expert fails to produce a determination within the period
stipulated at Article 7.2.2 above or (b) one party gives a notice to the
other party pursuant to Article 7.2.3 above.
7.3 Notwithstanding any reference to an Expert or arbitration
hereunder,
(a) the parties shall continue to perform their respective obligations
under the Contract unless the parties otherwise agree; and
(b) the Buyer shall pay to the Supplier any monies due and owing to
the Supplier.
PART II Subject Matter of Contract
Article 8. Scope of Works
8.1 General
The Supplier's obligations cover the grant of license for use of the
production technology and know-how, the performance of the basic design
and detailed design, procurement and supply of the Equipment including the
spare parts thereof, the provision of the Technical Services and training
and the performance of other associated work and services for and relating
to the Contract Plant, all as specifically set forth and limited to in
Appendix 7-1 (Scope of Works and Supply) hereto. The Supplier shall
provide the services of engineers, designers and other persons necessary
for the performance of the Works and shall proceed to and pursue the
completion of the Works in accordance with the plans, procedures,
specifications, drawings, codes and standards and any other documents as
specified in Appendix 7-2 (Technical Specifications) hereto.
8.2 Equipment and Spare Parts
The Supplier agrees to procure, inspect and expedite the Equipment for
delivery FOB vessels at ports of shipment (or CIF ocean ports of
destination) in accordance with the terms of Article 22.2 (Delivery)
hereof.
Within the Contract Price for the Equipment specified in Article 12
(Contract Price and Technical Service Fee) hereof, the Supplier agrees to
supply as a part of the Equipment those spare parts as required for the
erection, installation and the Commissioning of the Equipment up to the
Acceptance as per the list of the spare parts specified in Appendix 7-1
(Scope of Works and Supply) hereto. The Supplier shall procure, inspect,
expedite and deliver these spare parts in the same manner as specified for
the Equipment in accordance with the terms of the Contract.
8.3 Spare Parts for Operation
In addition to the stipulations in Article 8.2 (Equipment and Spare
Parts) above, the Supplier also agrees to supply spare parts required for
the operation and maintenance of the Equipment for the period specified in
Appendix 7-1 (Scope of Works and Supply) hereto. However, the Buyer shall
pay to the Supplier the price of such spare parts, including other costs
and expenses relating to the supply of the same, in addition to the
Contract Price for the Equipment specified in Article 12.1.1 hereof. Such
price and other terms and conditions for the supply of such spare parts
shall be separately agreed in writing between the Buyer and the Supplier
when the identity, specifications and quantities of the said spare parts
have been determined between the Buyer and the Supplier.
8.4 Technical Documents
The Supplier agrees to prepare and submit to the Buyer the Technical
Documents as per the list of the Technical Documents as specified in
Appendix 7-1 (Scope of Works and Supply) hereto in accordance with the
terms of the Contract.
8.5 Technical Services
The Supplier agrees to provide the Technical Services at the Contract
Plant as specified in Appendix 7-5 (The Supplier's Engineer's Technical
Services and Working Conditions) hereto in accordance with the terms of
the Contract.
8.6 Training
The Supplier shall be responsible for conducting the training of the
Buyer's operating and maintenance personnel as specified in Appendix 7-1
(Scope of Works and Supply) hereto. The maximum number of man-months,
places and periods of training and the responsibility for associated costs
and expenses are as specified in Appendix 7-1 (Scope of Works and Supply)
hereto. All other conditions including the program for and nature of the
training shall be agreed between the Buyer and the Supplier.
Article 9. Supplier's Manner of Execution of Works
9.1 The Supplier shall execute and complete the Works with due care
and diligence in accordance with the Contract.
9.2 The Supplier shall comply with all laws in force in the country
where the Works are carried out, whether national, provincial, municipal
or otherwise, affecting the performance of the Contract and binding upon
the Supplier. The Supplier shall indemnify and hold harmless the Buyer
from and against any and all liabilities, damages, claims, fines,
penalties and expenses of whatever nature arising out of or resulting from
the violation of such laws by the Supplier or its personnel, including the
Sub-contractors and their personnel but without prejudice to Article 10. 1
(Information and Data) below.
Article 10. Buyer's Responsibilities
10.1 Information and Data
The Buyer shall provide the Supplier with all information and data as
may be required by the Supplier concerning the basic design of the
Contract Plant as specified in Appendix 7-1 (Scope of Works and Supply)
hereto. The Buyer shall ensure the correctness and exactitude of all such
information and/or data except where otherwise expressly stated in the
Contract.
10.2 Design and Documents
The Buyer shall provide such design, drawings and/or. documents for
the Contract Plant (other than those provided by the Supplier) as
specified in Appendix 7-1 (Scope of Works and Supply) hereto and shall
obtain the Supplier's consent to them before the Buyer proceeds further
with its works. Upon request by the Supplier, the Buyer shall allow the
Supplier to have access to other Buyer's works for review by the Supplier.
10.3 Equipment and Materials
The Buyer shall procure and supply all equipment, materials and
facilities required for the Contract Plant except for the Equipment
supplied by the Supplier pursuant to Appendix 7-1 (Scope of Works and
Supply) hereto. The Buyer shall obtain all necessary import permits and
take delivery of all the Equipment including spare parts to be supplied by
the Supplier at the designated point of FOB (or at the designated ocean
ports of destination in case of CIF) and undertake all import clearance
and subsequent transportation thereof to the Contract Plant.
10.4 Construction and Commissioning
The Buyer shall be responsible for all the civil works, construction,
erection, testing, the Precommissioning, the Commissioning and operation
of the Contract Plant in accordance with the Technical Documents and under
the relevant Technical Services to be rendered by the Supplier as
specified in Appendix 7- 5 (The Supplier's Engineer's Technical Services
and Working Conditions) hereto.
10.5 Cost and Expenses
The Buyer shall execute and complete its work and services at its own
cost and with due care and diligence in accordance with the Contract.
Article 11. Time Schedule
11.1 Without prejudice to Article 26 (Delivery Time Guarantee) hereof,
the Supplier shall proceed with the Works in accordance with the time
schedule specified in Appendix 7-4 (Time Schedule) hereto subject to any
extension under Article 37 (Extension of Time for Delivery) hereof. The
Buyer shall also proceed with its work in accordance with the time
schedule as specified in Appendix 7-4 (Time Schedule) hereto.
PART III Payment
Article 12. Contract Price and Technical Service Fee
12.1 The Buyer hereby agrees to pay to the Supplier the Contract Price
and the Technical Service Fee in consideration of the performance by the
Supplier of its obligations hereunder, as specified below:
12.1.1 The Contract Price shall be (Currency).
The breakdown of the Contract Price is as follows;
(1) Paid Up License Fee
(2) Total Design Fee
1) Basic Design Fee
2) Detail Design Fee
3) Total
(3) Price of Equipment
The detail breakdown of the Contract Price is as specified in
Appendix-I (Breakdown of Contract Price) hereto.
12.1.2 The Technical Service Fee is as specified in Appendix 7-5 (The
Supplier's Engineer's Technical Services and Working Conditions) hereto.
12.2 The Contract Price shall be a firm lumpsum not subject to any
alteration except in the event of a change in the Works specified in
Article 36.1 hereof or as otherwise provided in the Contract.
12.3 The Contract Price includes the supply of spare parts required up
to the Acceptance of the Contract Plant as described in
Article 8.2 hereof and Appendix 7-1 (Scope of Works and Supply) hereto.
However, the Contract Price does not cover the supply of any other spare
parts, including those recommended by the Supplier as required for the
period of years' operation of the Contract Plant from the date of
the Acceptance as described in Article 8.3 hereof and Appendix 7-1 (Scope
of Works and Supply) hereto. The Buyer shall pay to the Supplier the price
of such spare parts, including the purchase price therefor and other costs
and expenses relating to the supply of the same, in addition to the
Contract Price specified in Article 12.1.1 above. Such price and other
terms and conditions for the supply of such spare parts shall be
separately agreed in writing between the Buyer and the Supplier when the
identity, specifications and quantities of the said spare parts have been
determined in accordance with Article 8.3 hereof.
Article 13. Terms of Payment
13.1 The Contract Price and the Technical Service Fee shall be paid by
the Buyer to the Supplier at the times, in the manner, and in accordance
with the provisions of Appendix 2 (Payment Terms) hereto and Appendix 7-5
(The Supplier's Engineer's Technical Services and Working Conditions)
hereto, respectively.
13.2 The Buyer shall, not later than days after the signing
date of this Agreement, deliver to the Supplier a letter of credit and a
letter of guarantee issued by a first class bank acceptable to the
Supplier, in the form of Appendix 3 (Form of Letter of Credit/Guarantee)
hereto and shall maintain such letter of credit and such letter of
guarantee throughout the Contract.
In the event that the Contract changes after the issue of the letter
of credit and the letter of guarantee, the Buyer shall arrange for such
letters to be amended to reflect such change as soon as possible
thereafter.
13.3 No payment made by the Buyer hereunder shall be deemed to
constitute acceptance by the Buyer of the Works or any part(s) thereof.
13.4 In the event that the Buyer fails to make any payment on its
respective due date or within the period set forth in the Contract, the
Buyer shall pay to the Supplier interest on the amount of such delayed
payment at the rate(s) shown in Appendix 2 (Payment Terms) hereto for the
period of delay until payment in full, whether before or after judgment or
arbitral award.
Article 14. Bonds
14.1 Issuance of Bonds
The Supplier shall provide the bonds specified below in favor of the
Buyer at the times, and in the amount, manner and form specified below.
14.2 Advance Payment Bond
14.2.1 The Supplier shall deliver to the Buyer not later than
days after the Effective Date, a bond in the form of Appendix
4-1 (Advance Payment Bond) hereto issued by a bank acceptable to the Buyer
for a sum equal to the amount of the advance payment calculated in
accordance with Appendix 2 (Payment Terms) hereto.
14.2.2 The amount of the bond shall be reduced in proportion to the
price for the Equipment under Article 12.1.1 hereof actually delivered by
the Supplier from time to time and shall automatically become null and
void upon the date of the Last Major Shipment.
14.2.3 The bond shall be returned to the Supplier immediately after
its expiry.
14.3 Performance Bond
14.3.1 The Supplier shall deliver to the Buyer not later than
days after the Effective Date, a bond in the form of Appendix 4-2
(Performance Bond) hereto for the due performance of the Contract issued
by a bank acceptable to the Buyer for a sum equal to per cent of
the Contract Price. The bond shall be reduced to per cent of the
Contract Price on the date of the Last Major Shipment and shall
automatically become null and void months after the date of the
Last Major Shipment or months after the date of the Acceptance of
the Contract Plant, whichever comes earlier.
Notwithstanding the foregoing, if the Defect Liability Period is
extended with respect to any part of the Equipment in accordance with
Article 27.2.7 hereof, the Supplier shall arrange for the bond to remain
valid until the expiration of the Defect Liability Period with respect to
such part in an amount equal to per cent of the Contract Price of
that part.
14.3.2 The bond shall be returned to the Supplier immediately after
its expiry.
14.4 Retention Bond
14.4.1 If the Contract provides for retention money to be withheld by
the Buyer from the payments of the Contract Price, the Supplier may
provide to the Buyer a retention bond(s) in the form of Appendix 4-3
(Retention Bond) hereto issued by a bank acceptable to the Buyer for a sum
equal to the retention money withheld by the Buyer.
Upon receipt of the bond(s), the Buyer shall immediately pay to the
Supplier all the retention money withheld up to the sums guaranteed by the
bond(s).
14.4.2 The bond shall automatically become null and void on
months after the date of the Last Major Shipment or the date of the
Acceptance of the Contract Plant, whichever comes earlier.
14.4.3 The bond shall be returned to the Supplier immediately after
its expiry.
14.5 Claim under Bond
If the Buyer considers itself entitled to any claim under any bond, it
shall so notify the Supplier specifying the default of the Supplier upon
which it bases its claim. Subject to full compliance with the requirements
and procedures stated in the applicable bond, the Buyer may claim under
the bond to the extent of the loss or damage incurred by the Buyer by
reason of such default.
Article 15. Taxes and Duties
15.1
15.1.1 Except as otherwise specifically provided in the Contract, the
Supplier shall bear and pay all taxes, duties, levies and charges assessed
on the Supplier, its Sub-contractors or their employees by all local,
state or national government authorities in connection with the Works in
and outside the country where Contract Plant is located.
15.1.2 The Buyer shall be entitled to deduct withholding tax required
under applicable tax laws of the country where the Contract Plant is
located and the "AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC
OF CHINA AND THE GOVERNMENT OF FOR THE AVOIDANCE OF DOUBLE
TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON
INCOME" for the account of the Supplier from payment of the Paid Up
License Fee, the Basic Design Fee and the Technical Service Fee and to pay
the same to the appropriate taxing authority. In such case, the Buyer
shall furnish the Supplier with an official tax receipt or other
appropriate evidence issued by such taxing authority.
15.2 Notwithstanding Article 15.1 above, the Buyer shall bear and
promptly pay all customs, import and export duties, value added taxes and
business taxes on the Works, and withholding tax on any sum payable except
the Paid Up License Fee, the Basic Design Fee and the Technical Service
Fee imposed by the laws of the country where the Contract Plant is
located.
15.3 If any tax exemption, reductions, allowances or privileges may be
applicable in the country where the Contract Plant is located, the Buyer
shall use its best endeavors to enable the Supplier to benefit from any
such tax savings to the maximum allowable extent.
15.4 For the purpose of the Contract, it is agreed that the Contract
Price and the Technical Service Fee specified in Article 12 (Contract
Price and Technical Service Fee) hereof is based on the taxes, duties,
levies and charges prevailing at the date hereof in the country where the
Contract Plant is located (hereinafter called "Tax" in this Article 15.4).
If any of the rates of Tax is increased or decreased or a new Tax is
introduced or an existing Tax abolished or any change in interpretation or
application of any Tax occurs in the course of the performance of the
Contract, which was or is to be assessed on the Supplier, Sub-contractors
or their employees in connection with the performance of the Contract, an
equitable adjustment of the Contract Price and the Technical Service Fee
shall be made to reflect any such change by addition to the Contract Price
and the Technical Service Fee or deduction therefrom, as the case may be,
in accordance with Article 34 (Change in Laws and Regulations) hereof.
PART IV Intellectual Property
Article 16. Licence/Use of Technical Information
16.1 For the operation and maintenance of the Contract Plant
incorporating the process(es) specified in Appendix 6 (Licence Conditions)
hereto, and subject to the conditions therein contained, the Supplier
shall grant a non-exclusive and non-transferable licence (without the
right to sub-license) to the Buyer under the patents, utility models or
other industrial property rights owned by the Supplier or by a third party
from whom the Supplier has received the right to grant licences
thereunder, and shall also grant to the Buyer a non-exclusive and
non-transferable right (without the right to sub-license) to use the
know-how and other technical information disclosed to the Buyer under the
Contract. Nothing contained herein shall be construed as transferring
ownership of any patent, utility model, trademark, design, copyright,
know-how or other intellectual property right from the Supplier or any
third party to the Buyer.
16.2 The fully Paid Up Licence Fee for the grant of the licence and
rights under Article 16.1 above shall be included in the Contract Price
and paid to the Supplier by the Buyer for the operation and maintenance by
the Buyer of the Contract Plant at its specified design capacity pursuant
to Article 12 (Contract Price and Technical Service Fee) hereof. The
operation of the Contract Plant by the Buyer in excess of such design
capacity or any extension or modification by the Buyer of the Contract
Plant which results in an increase in such design capacity of the Contract
Plant shall be subject to the conditions specified in Appendix 6 (Licence
Conditions) hereto.
16.3 The copyright in all drawings, documents and other materials
containing data and information furnished to the Buyer by the Supplier
hereunder shall remain vested in the Supplier or, if they are furnished to
the Buyer directly or through the Supplier by any third party including
process licensor(s) or suppliers of the Equipment, the copyright in such
materials shall remain vested in such third party.
Article 17. Confidential Information
17.1 The Buyer and the Supplier shall keep confidential and shall not,
without the written consent of the other party hereto, divulge to any
third party any documents, data, know-how or other information furnished
directly or indirectly by the other party hereto in connection with the
Contract whether such information has been furnished prior to, during or
following termination of the Contract. Notwithstanding the above, the
Supplier may furnish to its Sub-contractor such documents, data, know-how
and other information it receives from the Buyer to the extent required
for the Sub-contractor to perform its works under the Contract, in which
event the Supplier shall obtain from such Sub-contractor an undertaking of
confidentiality similar to that imposed on the Supplier under this Article
17.
17.2 The Buyer shall not use such documents, data, know- how and other
information received from the Supplier for any purpose other than the
operation and maintenance of the Contract Plant or the Equipment.
Similarly, the Supplier shall not use such documents, data, know-how and
other information received from the Buyer for any purpose other than the
design, procurement of the Equipment, or such other work and services as
are required for the performance of the Contract.
17.3 The obligation of a party under Articles 17.1 and 17.2 above,
however, shall not apply to that information which:
(a) now or hereafter enters the public domain through no fault of that
party; or
(b) can be proved to have been in the possession of that party at the
time of disclosure and which was not previously obtained, directly or
indirectly, from the other party hereto; or
(c) otherwise lawfully becomes available to that party from a third
party under no obligation of confidentiality.
17.4 The above provisions of this Article 17 shall not in any way
modify any undertaking of confidentiality given by either of the parties
hereto prior to the signing date of the Agreement in respect of process or
equipment.
17.5 The provisions of this Article 17 shall survive termination for
whatever reason of the Contract.
PART V WORK EXECUTION
Article 18. Representatives
18.1 Buyer's Representative
18.1.1 If the Buyer's Representative is not named in the Contract,
then within fourteen (14) days of the Effective Date, the Buyer shall
appoint and notify the Supplier in writing of the name of the Buyer's
Representative. The Buyer may from time to time appoint some other person
as the Buyer's Representative in place of the person previously so
appointed and shall give a notice of the name of such other person to the
Supplier without delay. No such appointment shall be made at such a time
or in such a manner as may impede the progress of the Works. Such
appointment shall only take effect upon receipt of such notice by the
Supplier. The Buyer's Representative shall represent and act for the Buyer
at all times during the currency of the Contract. All notices,
instructions, orders, certificates, approvals and all other communications
under the Contract shall be given by the Buyer's Representative, except as
herein otherwise provided.
All notices, instructions, information and other communications given
by the Supplier to the Buyer under the Contract shall be given to the
Buyer's Representative, except as herein otherwise provided.
18.1.2 The Buyer's Representative may at any time delegate to any
person any of the powers and duties vested in him. Any such delegation may
be revoked at any time. Any such delegation or revocation shall be subject
to a prior notice signed by the Buyer's Representative and any notice of
delegation or revocation shall specify the powers and duties thereby
delegated or revoked. Such delegation or revocation shall become valid
when a copy thereof has been delivered to the Supplier.
Any act or exercise by any person of powers and duties delegated to
him in accordance with this Article 18.1.2 shall be deemed to be an act or
exercise by the Buyer's Representative.
18.2 Supplier's Representative
18.2.1 If the Supplier's Representative is not named in the Contract,
then within fourteen (14) days of the Effective Date, the Supplier shall
appoint and notify the Buyer in writing of the name of the Supplier's
Representative.
18.2.2 The Supplier's Representative shall represent and act for the
Supplier at all times during the currency of the Contract and shall give
to the Buyer all the Supplier's notices, instructions, information and all
other communications under the Contract.
All notices, instructions, information and all other communications
given by the Buyer to the Supplier under the Contract shall be given to
the Supplier's Representative, except as herein otherwise provided.
The Supplier shall not revoke the appointment of the Supplier's
Representative without the Buyer's prior written consent, which shall not
be unreasonably withheld. If the Buyer consents thereto, the Supplier
shall appoint some other person as the Supplier's Representative pursuant
to the procedure set out in Article 18.2.1 above.
18.2.3 The Supplier's Representative may at any time delegate to any
person any of the powers, functions and authorities vested in him. Any
such delegation may be revoked at any time. Any such delegation or
revocation shall be subject to a prior notice signed by the Supplier's
Representative and any notice of delegation or revocation shall specify
the powers, functions and authorities thereby delegated or revoked. No
such delegation or revocation shall take effect unless and until a copy
thereof has been delivered to the Buyer. Any act or exercise by any person
of powers, functions and authorities so delegated to him in accordance
with this Article 18.2.3 shall be deemed to be an act or exercise by the
Supplier's Representative.
18.2.4 The Buyer may by notice to the Supplier object to any
representative or person employed by the Supplier in the execution of the
Works who shall, in the reasonable opinion of the Buyer, misconduct
himself or be incompetent or negligent or commit a serious breach of the
site regulations. The Buyer shall provide evidence of the same whereupon
the Supplier shall remove such person from the Works.
18.2.5 If any representative or person employed by the Supplier is
removed in accordance with Article 18.2.4 above, the Supplier shall where
required promptly appoint a replacement in his stead.
Article 19. Work Program
19.1 Program of Works
Within a time mutually agreed upon between the Buyer and the Supplier
after the date of the Agreement, the Supplier shall prepare and submit to
the Buyer a program of the Works showing the sequence in which it proposes
to carry out the Works and the date by which the Supplier reasonably
requires that the Buyer shall have fulfilled its obligations under the
Contract so as to enable the Supplier to execute the Works in accordance
with the program. The program so submitted by the Supplier shall accord
with any dates and periods specified in the Contract. The Supplier shall
revise the program as and when appropriate and shall submit all such
revisions to the Buyer.
Article 20. Sub-contracting/Nominated Sub-contractor(s)
20.1 Sub-contracting
The Supplier may sub-contract any part of the Works to any third party
with exception of the nominated Sub-contractor under Article 20.2
(Nominated Sub-contractor(s)) hereof.
20.2 Nominated Sub-contractor(s)
20.2.1 If, before the date of the Contract, the Buyer requests that
the certain part of the Works shall be executed by a specific
sub-contractor within the Buyer's country nominated or recommended by the
Buyer (such sub-contractor being hereinafter referred to as "Nominated
Sub-contractor"), then the Supplier shall consider such request by the
Buyer.
20.2.2 Notwithstanding the request by the Buyer, the Supplier shall
not be required by the Buyer or be under any obligation to employ any
Nominated Sub-contractor in the following circumstances:
(a) if the Nominated Sub-contractor declines to enter into a
sub-contract with the Supplier whereby the Nominated Sub-contractor
undertakes towards the Supplier the like obligations and liabilities as
the Supplier has to the Buyer in respect of the subject matter of the
subcontract and whereby the Nominated Sub-contractor will save harmless
and indemnify the Supplier from and against any breach by the Nominated
Sub-contractor of the sub-contract and similarly indemnify the Supplier
from and against any negligence by the Nominated Sub-contractor; or
(b) if the Supplier objects to employ the Nominated Sub-contractor for
any of the following reasons:
(i) the Supplier considers that it would be prevented or prejudiced
from carrying out any of its obligations under the Contract for specified
reasons if it employed the Nominated Sub-contractor; or
(ii) the Supplier considers that the Nominated Sub-contractor would be
incompetent or unreliable in its performance of the work to be
sub-contracted for specified reasons.
20.2.3 If the Supplier shall decline to enter into a sub-contract for
any of the reasons set out in Article 20.2.2 above, the Buyer shall do one
of the following:
(a) withdraw the nomination and make the Supplier select its
Sub-contractor at its own discretion; or
(b) the Buyer may enter into a direct contract with such sub-
contractor for such work whereupon such work shall not be included in the
definition of the term "Works" specified in Article 1 (Definitions) hereof
and shall be included in the Buyer's scope of works set forth in Appendix
7-1 (Scope of Works and Supply) hereto; or
20.2.4 If the Supplier judges that the Nominated Sub-contractor is
capable and appropriate to perform the works specified by the Buyer and
enters into the sub-contract with the Nominated Sub-contractor, the
Supplier shall be responsible to the Buyer for the full performance of the
sub-contract by the Nominated Sub-contractor, provided however that, if
the Nominated Sub- contractor becomes impossible to perform the
sub-contract in proper way due to its financial conditions, the Buyer
shall indemnify the Supplier from losses and damages suffered by the
Supplier due to such situation. In this case the Buyer shall appoint
another Sub-contractor being no less qualified and capable than the
previous Sub-contractor as the Nominated Sub-contractor and the parties
hereto shall treat such change as change in the Works in accordance with
Article 36 (Change in Works) hereof.
Article 21. Design and Engineering
21.1 Design and Drawings
21.1.1 The Supplier shall execute the basic and detailed design work
within the scope of the Works specified in Appendix 7- 1 (Scope of Works
and Supply) hereto, in compliance with the provisions of the Contract, or
where not so specified, in accordance with good engineering practice.
21.1.2 The Supplier shall be entitled to disclaim responsibility for
any design, data, drawing, specification or other document, or any
modification thereof provided or designated by or on behalf of the Buyer
by giving a notice of such disclaimer to the Buyer.
21.2 Codes and Standards
Wherever references are made in the Contract to codes and standards in
accordance with which the Works shall be executed, the edition or the
revised version of such codes and standards current at the date of signing
this Agreement shall apply unless otherwise specified.
Within months from the Effective Date, the Supplier
shall submit the relevant standards, codes and its list to the Buyer.
21.3 Approval of Technical Documents by Buyer
21.3.1 The Supplier shall prepare (or cause its Sub- contractors to
prepare) and furnish to the Buyer the documents listed in Appendix 7-3
(Documents for Approval by the Buyer) hereto for its approval as
specified.
Any part of the Works covered by or related to the documents to be
approved by the Buyer shall be executed only after the Buyer's approval
thereof.
21.3.2 Within fourteen (14) days after receipt by the Buyer of any
document requiring the Buyer's approval in accordance with Article 21.3.1
above, the Buyer shall either return one copy thereof to the Supplier with
its approval endorsed thereon or shall notify the Supplier in writing of
its disapproval thereof and the reasons therefor and the modifications
which the Buyer proposes. If the Buyer fails to take such action within
the said fourteen (14) days, then the said document shall be deemed to
have been approved by the Buyer.
21.3.3 The Buyer shall not disapprove any document except on the
ground that the document does not comply with some specified provision of
the Contract or that it is contrary to good engineering practice.
21.3.4 If the Buyer disapproves the document, the Supplier may either
modify the document and resubmit it for the Buyer's approval in accordance
with Article 21.3.2 above, or may dispute the disapproval in accordance
with Article 21.3.5 below. If the Buyer approves the document subject to
modification(s), the Supplier may either accept the modification(s),
whereupon the document shall be deemed to have been approved, modify the
document and re-submit it for the Buyer's approval in accordance with
Article 21.3.2 above or dispute the modification(s) in accordance with
Article 21.3.5 below.
21.3.5 If any dispute or difference shall arise between the Buyer and
the Supplier in connection with or arising out of the disapproval by the
Buyer of any document and/or any modification (s) thereto which cannot be
settled between the parties within a reasonable period, then such dispute
or difference may be referred to an Expert for determination in accordance
with Article 7.2 (Reference to Expert) hereof. If such dispute or
difference is referred to an Expert, the Buyer shall give instructions as
to whether or not and, if so, how the Works are to proceed. The Supplier
shall proceed with the Works in accordance with the Buyer's instructions,
provided that if the Expert upholds the Supplier's dispute of the
disapproval and if no notice has been given by the Buyer under Article
7.2.3 hereof, then the Supplier shall be reimbursed by the Buyer for any
additional costs incurred by reason of such instructions and shall be
relieved of such responsibility or liability in connection with the
dispute and the execution of the instructions as the Expert shall decide
and the Time for Delivery shall be extended accordingly.
21.3.6 The Buyer's approval, either with or without modification(s),
of the document furnished by the Supplier shall not relieve the Supplier
of any responsibility or liability imposed upon it by any provisions of
the Contract except where and to the extent that the Expert upholds the
Supplier's dispute of the modification(s).
21.3.7 The Supplier shall not depart from any approved document unless
the Supplier has first submitted to the Buyer an amended document and
obtained the Buyer's approval thereof pursuant to the provisions of this
Article 21.3.
If the Buyer requests any change in any already approved document
and/or in any document based thereon, the provisions of Article 36 (Change
in Works) hereof shall apply to such request.
21.4 Design Liaison
21.4.1 Both parties shall participate in design liaison meetings as
follows:
21.4.2 Within month after the Effective Date,
shall at its own cost dispatch its engineer to to participate in
the kick-off meeting for the period of . At the end of the
kick-off meeting the Buyer and the Supplier shall sign the kick-off
meeting protocol.
21.4.3 Within month after the Effective Date,
shall at its own cost dispatch its engineer to to participate in
the basic design review meeting for the period of . At the end
of the basic design review meeting the Buyer and the Supplier shall sign
the basic design review meeting protocol.
21.4.4 Within month after the Effective Date,
shall at its own cost dispatch its engineer to to participate in
the detail design review meeting for the period of . At the end
of the detail design review meeting the Buyer and the Supplier shall sign
the detail design review meeting protocol.
21.4.5 During the period of the design work, the Buyer may send his
engineer at its own expense to the Supplier's relevant design offices or
shops of the Equipment manufacturers to understand the relevant technical
data relating to the Supplier's design or the Equipment, provided that the
Supplier's Works are not hindered or the relevant Equipment manufacturer
agrees to receive the Buyer's engineer. The Supplier shall assist for the
Buyer to arrange entry visa and sojourn formalities.
21.4.6 During the performance of the Works, the Supplier shall answer
in time the questions put forward by the Buyer in connection with the
design and technical problems in the scope of the Contract.
21.4.7 Detailed contents, time, place and participants of the design
liaison meetings are specified in Appendix 7-1 (Scope of Works and Supply)
hereto.
21.5 Delivery of Technical Documents
21.5.1 The Technical Documents shall be delivered on CPT (Carriage
Paid To) destination airport (in case of air cargo) or destination place
(in case of special courier) in accordance with Incoterms. The contents,
number of copies and delivery schedule of the Technical Documents are
stipulated in Appendix 7-1 (Scope of Works and Supply) hereto.
21.5.2 Not later than seven (7) days before dispatching the Technical
Documents, the Supplier shall notify the Buyer by cable/ telex/fax of the
Contract number, approximate number of parcels, approximate gross weight
and expected date of arrival at .
21.5.3 Within working days after dispatching the said
Technical Documents, the Supplier shall notify the Buyer by
cable/telex/fax of;
(a) In case of Air Cargo
the Contract number, number of parcels, gross weight, dispatching
date, flight number, and air waybill number,
(b) In case of Special Courier Services
the Contract number, number of parcels, gross weight, dispatching date
and cargo receipt number.
21.5.4 The date of air waybill (in case of air cargo) or the date of
cargo receipt (in case of special courier services) shall be deemed to be
as the actual delivery date of the Technical Documents.
21.5.5 In case of any shortage, loss or damage caused to the Technical
Documents due to the Supplier's responsibilities before the delivery
thereof, the Supplier shall make supplementary delivery for the part
short, lost or damaged within days after receiving the Buyer's
notification without any charge.
21.5.6 Within working days after delivery of each batch of
Technical Documents, the Supplier shall send to the Buyer the following
documents:
(a) Air waybill in copies (marked with the Contract number and
notifying the forward agent of the Buyer at the destination airport).
(b) Detailed list of Technical Documents in 2 copies.
21.5.7 The Technical Documents shall be properly packed to withstand
numerous handling and longdistance transportation and to protect damages
from moisture and rain. The surface of each package shall be marked with
the following printed words:
(a) Contract No.:
(b) Consignee:
(c) Destination:
(d) Shipping Mark:
(e) Gross Weight (Kg):
(f) Case No. \Bale No.:
Detailed list which indicates title, series number and number of pages
of the delivered Technical Documents shall be enclosed in each package
together with the Technical Documents.
21.6 Buyer's design and engineering
The Buyer shall perform and complete its scope of the design and
engineering specified in Appendix 7-1 (Scope of Works and Supply) hereto
in accordance with the Supplier's Technical Documents and proper design
and engineering practice. If any technical document prepared by the Buyer
is defective, inadequate or insufficient, the Buyer shall correct such
defect, inadequacy or insufficiency at the Buyer's expense and any
additional expenses incurred by the Buyer and/or the Supplier due to such
defect, inadequacy or insufficiency shall be borne by the Buyer, including
but not limited to, expenses for repair, replacement or modification of
equipment procured by the Buyer or the Equipment, or additional
construction expenses incurred by the Buyer in accordance with Article
27.2 hereof.
The scope of design undertaken by the Buyer and the contents of
technical documentation supplied by the Buyer to the Supplier is specified
in Appendix 7-1 (Scope of Works and Supply) hereto. The Supplier shall
take it as the basis for its design.
If the Supplier requests the Buyer for review by the Supplier of the
technical documents prepared by the Buyer in accordance with Appendix 7-1
(Scope of Works and Supply) hereto, the Buyer shall submit the relevant
technical documents requested by the Supplier to the Supplier for review.
If Supplier considers necessary, the Supplier is entitled to assign and
dispatch its engineer(s) to the Buyer's design office to give technical
advice and instructions.
Such Reviews by the Supplier do not relieve the Buyer from the Buyer's
responsibilities in relation to correctness or appropriateness of the
technical documents prepared by the Buyer.
Article 22. Supply and Delivery
22.1 Supply of Equipment
Subject to Article 14.2 (Advance Payment Bond) hereof, the Supplier
shall procure and supply all the Equipment in an expeditious and orderly
manner.
22.2 Delivery
22.2.1 The Equipment shall be delivered on FOB ports basis
in accordance with Incoterms.
The Supplier shall complete the delivery of the Equipment in
basic lots in accordance with the final delivery schedule specified in
Article 22.2.3 hereof. In addition to the above basic lots the Supplier
shall deliver the following lots, however these additional lots shall not
be considered as one of the above basic lots.
(1) Foundation templates and anchor bolts of the Equipment shall be
delivered in lot(s) within months from the Effective
Date.
(2) Catalyst(s), chemical(s) and/or lubricant oil which are to be
supplied by the Supplier in accordance with Appendix 7-1 (Scope of Works
and Supply) hereto shall be delivered in lot(s) not later than
months before the commencement of the Commissioning.
(3)
The total gross weight of the Equipment is approximately
metric tons and the total volume is approximately cubic meters.
The port(s) of shipments are . The port of destination is
.
22.2.2 Within months after the Effective Date, the Supplier
shall submit to the Buyer;
(a) the preliminary delivery schedule in six (6) copies which
specifies the Contract number, item number, name of the Equipment,
quantity, total price, approximate total gross weight, approximate total
volume, time of each shipment, shipping port, name of dangerous or
inflammable Equipment, and
(b) approximate dimensions (length, width and height) of the
over-sized or over-weighted Equipment.
The maximum limit of the weight of each inseparable integrated
Equipment is metric tons while the maximum limit of measurement is
X X meters.
22.2.3 Not later than months before the first delivery, the
Supplier shall submit to the Buyer,
(a) the final delivery schedule in six (6) copies, which specifies the
Contract number, despatch number, item number, name of the Equipment,
quantity, total price, approximate total gross and net weight, approximate
total volume, approximate dimensions (length x width x height) and volume
of each packaging case, time of each shipment, identification of basic
lots and additional lots, shipping port, name of dangerous or inflammable
Equipment and IMO No., and
(b) special requirements and precautions to be taken for
transportation and storage of dangerous or inflammable Equipment.
22.2.4 The date of "on board bill of lading" shall be deemed to be the
actual delivery date of the respective Equipment.
22.2.5 Not later than days before the readiness of each
shipment,
22.2.5.1 The Supplier shall notify the Buyer by cable/telex/ fax of
the following information:
(a) Contract number
(b) Date of readiness of the Equipment
(c) Total volume
(d) Total gross weight
(e) Total number of packages
(f) Shipping port
(g) Name, total gross weight and measurement of each package of the
over-sized or over-weight Equipment
(h) Name and IMO number of the dangerous or inflammable Equipment
22.2.5.2 At the same time the Supplier shall submit to the Buyer the
following documents, each in six (6) copies:
(a) The detailed list of the shipment covering the Contract number,
item number, name of the Equipment, specification, type, quantity, total
price, the dimensions of each package (length X width X height), total
number of packages and name of shipping port
(b) Overall packing sketch for each package of the over-sized or
over-weight Equipment
(C) Description covering names, properties, special protective
measures and way of handling an accident for any dangerous or inflammable
Equipment
(d) Description of the special precautions to be taken for the
Equipment with a special requirement for temperature, shock, etc. during
the transportation
Another copy of the said documents shall be submitted to the forward
agent of the Buyer at the port of destination as a basis for arranging
transportation, loading and unloading of the Equipment by the Buyer.
22.2.6 Each discrete part of the Equipment shall be shipped as a
whole. Their special tools for erection and easily worn out parts shall be
dispatched along with the Equipment concerned. In case that any Equipment
which are normally to be shipped on deck, the Supplier shall be
responsible for their proper packing and take special protective measures.
22.2.7 At the latest days before the arrival of the carrying
vessel at the shipping port, the Buyer shall notify the Supplier by
cable/telex/fax of the name of the carrying vessel, expected date of
arrival, age and classification of the vessel, shipping agent and other
information necessary for the shipment (in case of substitution of the
vessel or alteration of the shipping schedule, the Buyer or its shipping
agent shall duly inform the Supplier to this effect).
22.2.8 In the event of the Supplier's failure in effecting shipment
upon the arrival of the Buyer's vessel at the shipping port, the
demurrage, dead freight and other relevant charges thus incurred shall be
for the Supplier's account. Such charges shall be calculated and settled
in accordance with the relevant documents issued by the shipping company.
22.2.9 Provided the Supplier has the Equipment ready for shipment by
the expected date of arrival of the carrying vessel, and the Buyer's
vessel fails to arrive at the loading port within days after the
expected date of shipment, the storage charges, insurance premium,
interest and all the other additional expenses thus incurred by the
Supplier within the said days shall be for the Supplier's account.
The storage charges, insurance premium, interest and all the other
additional expenses thus incurred by the Supplier from the 31st day shall
be reimbursed by the Buyer against the Supplier's invoice accompanied with
the necessary accounting documents certifying the expenses incurred and
the reimbursement shall be made within days after receipt of the
Supplier's invoice by the Buyer. In this case the Supplier shall be
relieved from the delivery time guarantees specified in Article 26
(Delivery Time Guarantees) hereof.
If the Buyer and the Supplier agree, the Supplier may deliver the
above Equipment on CIF port basis at the Buyer's account. The Buyer
shall reimburse freight and insurance premium against the Supplier's
invoice accompanied with the necessary accounting documents certifying the
expenses incurred and the reimbursement shall be made within twenty (20)
days after receipt of the Supplier's invoice by the Buyer.
If the above Equipment is not delivered on board due to the Buyer's
reason within months from the expected date of delivery, the Buyer
shall make the payment for the said Equipment and the risk therefor shall
be transferred from the Supplier to the Buyer.
However, the Supplier shall deliver the Equipment on board the
carrying vessel at the Supplier's own expenses in accordance with the
Buyer's notification as soon as arrival of the vessel at the shipping
port.
22.2.10 Within working days after each shipment is effected
the Supplier shall inform the Buyer by cable/telex/fax of the Contract
number, the date and number of bill of lading, name of the carrying
vessel, name of the Equipment, total price, total number of packages,
total weight and total volume of the Equipment. For each large piece of
Equipment or dangerous Equipment, if any, as mentioned in Article 22.2.5.1
hereof, measurement (length x width x height) shall be additionally
informed.
22.2.11 After the Last Major Shipment is achieved the Buyer and the
Supplier shall conclude the protocol which confirms the achievement of the
Last Major Shipment. The date of the Last Major Shipment shall be the date
of the bill of lading for the Equipment of the last basic lot identified
in the final delivery schedule.
(Alternative: CIF basis)
22.2 Delivery
22.2.1 The Equipment shall be delivered on CIF port basis in
accordance with Incoterms.
The Supplier shall complete the basic lot of delivery of the Equipment
in accordance with the final delivery schedule specified in Article 22.2.3
hereof. In addition to the above basic lots the Supplier shall deliver the
following lots, however these additional lots shall not be considered as
one of the above basic lots.
(1) Foundation templates and anchor bolts of the Equipment shall be
delivered in lot(s) within months from the Effective
Date.
(2) Catalyst(s), chemical(s) and/or lubricant oil which are to be
supplied by the Supplier in accordance with Appendix 7-1 (Scope of Works
and Supply) hereto shall be delivered in lot(s) not later than
months before the commencement of the Commissioning.
(3) .
The total gross weight is approximately metric tons and the
total volume is approximately cubic meters.
22.2.2 Within months after the Effective Date, the Supplier
shall submit to the Buyer;
(a) the preliminary delivery schedule in six (6) copies which
specifies the Contract number, item number, name of the Equipment,
quantity, total price, approximate total gross weight, approximate total
volume, time of each shipment, shipping port, and name of dangerous or
inflammable Equipment, and
(b) approximate dimensions (length, width and height) of the
over-sized or over-weighted Equipment.
The maximum limit of the weight of each inseparable integrated
Equipment is metric tons while the maximum limit of measurement is
X X meters.
22.2.3 Not later than months before the first delivery, the
Supplier shall submit to the Buyer,
(a) the final delivery schedule in six (6) copies, which specifies the
Contract number, despatch number, item number, name of the Equipment,
quantity, total price, approximate total gross and net weight, approximate
total volume, approximate dimensions (length X width X height) and volume
of each packaging case, time of each shipment, identification of basic
lots and additional lots, shipping port, name of dangerous or inflammable
Equipment and IMO No., and
(b) special requirements and precautions to be taken for
transportation and storage of dangerous or inflammable Equipment.
22.2.4 The date of "on board bill of lading" shall be deemed to be the
actual delivery date of the respective Equipment.
22.2.5 Not later than days before the readiness of each
shipment.
22.2.5.1 The Supplier shall notify the Buyer by cable/telex/ fax of
the following information:
(a) Contract number
(b) Date of readiness of the Equipment
(c) Total volume
(d) Total gross weight
(e) Total number of packages
(f) Shipping port
(g) Name, total gross weight and measurement of each package of the
over-sized or over-weight Equipment
(h) Name and IMO number of the dangerous or inflammable Equipment
22.2.5.2 At the same time the Supplier shall submit to the Buyer the
following documents, each in six (6) copies:
(a) The detailed list of the shipment covering the Contract number,
item number, name of the Equipment, specification, type, quantity, total
price, the dimensions of each package (length X width X height), total
number of packages and name of shipping port
(b) Overall packing sketch for each package of the over-sized or
over-weight Equipment
(c) Description covering names, properties, special protective
measures and way of handling an accident for any dangerous or inflammable
Equipment
(d) Description of the special precautions to be taken for the
Equipment with a special requirement for temperature, shock, etc. during
the transportation
Another copy of the said documents shall be submitted to the forward
agent of the Buyer at the port of destination as a basis for arranging
transportation, loading and unloading of the Equipment by the Buyer.
22.2.6 Each discrete part of the Equipment shall be shipped as a
whole. Their special tools for erection and easily worn out parts shall be
dispatched along with the Equipment concerned. In case that any Equipment
which are normally to be shipped on deck, the Supplier shall be
responsible for their proper packing and take special protective measures.
22.2.7 The Supplier shall procure and maintain the Marine Cargo
Insurance for the Equipment at the Supplier's cost, which insurance shall
cover "all risks" and "war risk" with amount of one hundred and ten (110)
percent of the invoice value of each Equipment from manufacturer's
warehouse to warehouse at the destination port basis.
If any Equipment is damaged or lost in the course of transportation
due to any accident, the Supplier shall assist the Buyer to claim for
compensation against insurance company.
22.2.8 Within working days after each shipment is effected
the Supplier shall inform the Buyer by cable/telex/fax of the Contract
number, the date and number of bill of lading, name of the carrying
vessel, name of the Equipment, total price, total number of packages,
total weight and total volume of the Equipment. For each large piece of
Equipment or dangerous Equipment, if any, as mentioned in Article 22.2.5.1
hereof, measurement (length X width X height) shall be additionally
informed.
22.2.9 If unloading of the Equipment at the port of destination delays
due to port congestion, then the Supplier shall immediately inform the
Buyer of the situation. If the Supplier is requested by shipping company
to pay demurrage the Buyer shall reimburse the said demurrage to the
Supplier against the Supplier's invoice accompanied with the necessary
accounting documents certifying amount of the demurrage and the
reimbursement shall be made within days after receipt of the
Supplier's invoice by the Buyer.
22.2.10 The Buyer shall receive the Equipment delivered to the
destination port upon arrival of the cargo. Before the unloading of the
Equipment at the destination port will be commenced, the Buyer shall
finish all necessary formalities with the port authorities concerned, and
other arrangement at the port to receive the Equipment. Any excess costs
incurred by the Supplier due to the Buyer's default or negligence to
fulfill his obligation herein shall be for the Buyer's account.
22.2.11 After the Last Major Shipment is achieved the Buyer and the
Supplier shall conclude the protocol which confirms the achievement of the
Last Major Shipment. The date of the Last Major Shipment shall be the date
of the bill of lading for the Equipment of the last basic lot identified
in the final delivery schedule.
22.3 Packing and Marking
22.3.1 The Supplier shall have the Equipment properly packed in wooden
cases and shall take measures to protect the Equipment from moisture,
rain, rust, corrosion and shock, etc. according to their different shapes
and special features so as to withstand numerous handling, loading and
unloading as well as long-distance sea and inland transportation to ensure
the safe arrival of the Equipment at the Contract Plant without any damage
or corrosion.
22.3.2 The Supplier shall mark the following on two (2) sides of each
packaging case of the Equipment with indelible paint in conspicuous
English printed words:
(a) Contract No.:
(b) Shipping Mark:
(c) Destination:
(d) Consignee:
(e) Case No. \Bale No.:
(f) Gross\Net Weight (Kg):
(g) Measurement (length X width X height in Cm):
22.3.3 Should the Equipment weight or more than metric
tons, gravity and hoisting position shall be marked in English with
international trade transportation practice marks and illustrative marks
so as to facilitate loading, unloading and handling.
In accordance with characteristics and different requirements in
loading, unloading and transportation of the Equipment, the packaging case
shall be conspicuously marked with "Handle With Care", "Right Side Up",
"Keep Dry" or etc. in English and with appropriate international trade
practice marks and illustrative marks.
22.3.4 The shipping marks under Article 22.3.3 hereof shall be
indicated with metal labels for the Equipment delivered without packaging
case.
For the Equipment loaded on deck, sufficient shores or chocks should
be provided by the Supplier.
22.3.5 The loose accessories in package or bundle shall be labeled by
the Supplier, which label indicates the Contract number, name of the
Equipment and name of the said accessories. Spare parts and tools shall be
marked with the words "Spare Parts" or "Tools" besides the above
particulars.
22.3.6 The following documents shall be enclosed in each package of
the Equipment:
(1) Packing list in two (2) copies;
(2) Overall assembling drawings for machines and parts which need to
be assembled at the Contract Plant in two (2) copies.
22.3.7 Should the Equipment be damaged or lost due to the Supplier's
improper packing and/or inadequate protective measures before shipping,
the Supplier shall be responsible for repair or replacement therefor.
22.4 Customs Clearance
The Buyer shall, at its own expense, handle all imported Equipment at
the point(s) of import and any formalities for customs clearance.
Article 23. Test and Inspection
23.1 The Supplier shall, at its own expense, carry out at the place of
manufacture all such test and/or inspection of the Equipment as are
specified in the Contract.
23.2 The Buyer shall be entitled to attend the aforesaid test and/or
inspection by its own duly authorized and designated inspector, provided
that the Buyer shall bear all costs and expenses incurred in connection
with such attendance including, but not limited to, all traveling and
board and lodging expenses.
23.3 Whenever the Supplier is ready to carry out any such test and/or
inspection, the Supplier shall give a reasonable advance notice of such
test and/or inspection and of the place and time thereof. The Supplier
shall obtain from any relevant third party or manufacturer any necessary
permission or consent to enable the Buyer's inspector to attend the test
and/or inspection.
23.4 The Supplier shall provide the Buyer with a report of the results
of any such test and/or inspection.
If the Buyer's inspector fails to attend the test and/or inspection,
or if it is agreed between the parties that the Buyer's inspector shall
not do so, then the Supplier may proceed with the test and/or inspection
in the absence of the Buyer's inspector and provide the Buyer with a
report of the results thereof.
23.5 The Buyer may require the Supplier to carry out any test and/or
inspection not described in the Contract, provided that no such test
and/or inspection impedes the progress of the Works and/or the Supplier's
performance of its other obligations under the Contract, and provided
further that the Supplier's reasonable costs and expense incurred in the
carrying out of such test and/or inspection shall be added to the Contract
Price.
23.6 If any Equipment fails to pass any test and/or inspection, the
Supplier shall either rectify or replace such Equipment and shall repeat
the test and/or inspection upon giving a notice under Article 23.3 above.
23.7 If any dispute or difference of opinion shall arise between the
parties in connection with or arising out of the test and/or inspection of
the Equipment which cannot be settled between the parties within a
reasonable period of time, it may be referred to an Expert for
determination in accordance with Article 7.2 (Reference to Expert) hereof.
If such dispute or difference is referred to an Expert, the Buyer shall
give instructions as to whether or not and, if so, how the Works are to
proceed. The Supplier shall proceed with the Works in accordance with the
Buyer's instructions, provided that if the Expert upholds the Supplier's
argument and if no notice has been given by the Buyer under Article 7.2.3
hereof, then the Supplier shall be reimbursed by the Buyer for any
additional costs incurred by reason of such instructions and shall be
relieved of such responsibility or liability in connection with the
dispute and the execution of the instructions as the Expert shall decide
and the Time for Delivery shall be extended accordingly.
23.8 The Supplier shall afford the Buyer, at the latter's expense,
access at any reasonable time to any place where the Equipment are being
manufactured in order to inspect the progress and the manner of
manufacture, provided that the Buyer shall give the Supplier a reasonable
prior notice.
23.9 The Supplier agrees that neither the execution of a test and/or
inspection of the Equipment, nor the attendance by the Buyer's inspector
nor the issue of any test certificate pursuant to Article 23.4 above shall
release the Supplier from any other responsibilities under the Contract.
23.10 The Buyer shall conduct open package inspection on the Equipment
after its arrival at the Contract Plant and shall prepare inspection
record and inspection report. In case the law of the Buyer's country
requires mandatory inspection, the Buyer shall arrange an authoritative
inspection institution for mandatory inspection to issue an inspection
certificate. The expenses thus incurred shall be borne by the Buyer.
The said authoritative inspection institution in the Buyer's country
shall be .
23.11 The Supplier shall be entitled at his own expense to send his
inspectors or inspectors of the notary third party organization (herein
collectively referred to as Supplier's Inspector) to take part in the open
package inspection. The Buyer shall inform the Supplier of the date of
respective open package inspection in due time and render assistance to
the Supplier's Inspectors in arranging the entry visas.
23.12 In case the Supplier's Inspectors are unable to join the
respective open package inspection due to reason attributable to the
Supplier, the Buyer shall have the right to proceed the relevant open
package inspection independently or to invite the authoritative inspection
institution to perform open package inspection.
23.13 Should any shortage, defect, damage of the Equipment or improper
package be found in open package inspection, detailed record shall be made
and signed by the representatives of both parties. In case the Supplier's
responsibility is ascertained, the said record shall be taken as an
effective evidence for the Buyer to claim replacement, repair or
supplement. In case the Buyer's responsibility is ascertained, the
Supplier shall make replacement, repair or supplement at the earliest time
possible at the Buyer's expense.
23.14 If the Buyer considers that the inspection of the Equipment by
disassembling thereof is necessary, the Buyer may perform such
disassembling inspection, provided that the Buyer and the Supplier shall
mutually agree to such inspection in advance, the Supplier's engineer(s)
may witness such inspection and the Buyer shall perform such inspection in
accordance with the relevant technical documents supplied by the Supplier
at that time.
However, in any event the following Equipment shall not be
disassembled:
Instrument Equipment
Electrical Equipment
Rotating Equipment
Computer
23.15 After the open-package inspection, the Buyer shall properly
re-pack and store the Equipment in accordance with the instructions of the
Supplier's engineer(s).
23.16 The open package inspection shall not release the Supplier from
defect liability under Article 27 (Defect Liability) hereof.
Article 24. Erection and Precommissioning
24.1
24.1.1 The erection and the Precommissioning shall be carried out by
the Buyer with the Supplier's Technical Services in accordance with
Appendix 7-5 (The Supplier's Engineer's Technical Services and Working
Conditions).
24.1.2 The Supplier shall provide the Technical Services on the
erection and the Precommissioning of the Contract Plant. The Supplier's
Engineer shall give detailed explanation of methods and requirements of
the erection and the Precommissioning to the Buyer's personnel who are
taking part in the erection and the Precommissioning. The important
technical explanation shall be given in written form.
24.1.3 Each party shall nominate within sixty (60) days before the
beginning of the erection, one general representative to deal with all
matters in connection with the Works at the Contract Plant during the
period from erection up to the Acceptance of the Contract Plant. Such
Supplier's general representative shall arrive at the Contract Plant
day prior to the beginning of the erection. The general
representatives of both parties shall fully cooperate to prepare working
schedule and to analyze the problems and difference, which are to be
clarified and solved through friendly consultation. Further description
with regard to the general representatives of the Buyer and the Supplier
at the Contract Plant are referred to in Appendix 7-5 (The Supplier's
Engineer's Technical Services and Working Conditions) hereto.
24.2 As soon as the Contract Plant has, in the opinion of the Buyer
and the Supplier, been completed mechanically and structurally and put in
a tight and clean condition, the Supplier and the Buyer shall confirm
completion of the erection in writing.
24.3 Within seven (7) days after the confirmation of completion of the
erection under Article 24.2 above the Buyer shall supply the operating and
maintenance personnel specified in Appendix 7-1 (Scope of Works and
Supply) hereto for the Precommissioning of the Contract Plant.
Pursuant to Appendix 7-1 (Scope of Works and Supply) hereto, the Buyer
shall also provide, within the said seven (7) day period, the raw
materials, utilities, lubricants, chemicals, catalysts, facilities,
services and other matters required for the Precommissioning of the
Contract Plant.
24.4 As soon as is reasonably practicable after the operating and
maintenance personnel have been supplied by the Buyer and the raw
materials, utilities, lubricants, chemicals, catalysts, facilities, and
services and other matters have been provided by the Buyer in accordance
with Article 24.3 above, the Buyer shall commence the Precommissioning of
the Contract Plant in preparation for the Commissioning.
24.5 Within seven (7) days after all works in respect of the
Precommissioning are completed and, in the opinion of the Buyer and the
Supplier, the Contract Plant is ready for the Commissioning, the Buyer and
the Supplier shall confirm the readiness for the Commissioning in writing.
Article 25. Commissioning and Acceptance
25.1 Commissioning
25.1.1 The Commissioning of the Contract Plant shall be performed by
the Buyer immediately after the confirmation of the readiness for the
Commissioning under Article 24.5 hereof. The Commissioning period shall be
months after commencement of the Commissioning.
25.1.2 During the Commissioning, the Buyer shall supply the operating
and maintenance personnel, raw materials, utilities, lubricants,
chemicals, catalysts, maintenance tools, laboratory, testing facilities,
facilities, services and other matters required for the operation of the
Contract Plant as specified in Appendix 7-1 (Scope of Works and Supply)
hereto.
25.1.3 During the Commissioning, the Supplier's Engineer shall provide
the Buyer's engineer with the Technical Services in accordance with
Appendix 7-5 (The Supplier's Engineer's Technical Services and Working
Conditions) hereto.
25.1.4 All the sampling and analytical tests during the Commissioning
period shall be done at the presence of the representatives of both
parties and the detailed record shall be made. The Supplier's Engineer,
shall have the right to access to the laboratory and testing facilities
for sampling and analyzing.
25.1.5 During the Commissioning period, the Buyer's stored spare parts
shall be used for the replacement of defective Equipment, if any. Should
the spare parts be used due to Supplier's reason, they shall be
replenished by the Supplier in time.
25.1.6 When the Buyer and the Supplier consider that the Contract
Plant has been operated under stable conditions, the Buyer and the
Supplier shall confirm that the Contract Plant is ready for the
Performance Test.
25.2 Performance Test
25.2.1 Immediately after the confirmation under Article 25.1. 6 above,
the Performance Test (and repeated run thereof) shall be conducted by the
Buyer during the Commissioning of the Contract Plant to ascertain whether
the Contract Plant can attain the Process Performance Guarantees specified
in Appendix 5 (Process Performance Guarantees) hereto in accordance with
Article 28 (Process Performance Guarantees) hereof.
25.2.2 If, for reasons not attributable to the Supplier, the
Performance Test of the Contract Plant cannot be successfully completed
within months from date of the Last Major Shipment, the Supplier
shall be deemed to have fulfilled its obligations with respect to the
Process Performance Guarantees specified in Appendix 5 (Process
Performance Guarantees) hereto and Articles 28.3 and 28.4 hereof shall not
apply.
25.2.3 During the Performance Test, the Supplier's Engineer shall
provide the Buyer's engineer with the Technical Services on the
Performance Test of the Contract Plant in accordance with Appendix 7-5
(The Supplier's Engineer's Technical Services and Working Conditions)
hereto.
25.2.4 Any Performance Test shall be carried out in accordance with
the standards, methods, conditions, procedures and orders which are
specified in Appendix 5 (Process Performance Guarantees) hereto, as well
as the technical advice and instructions of the Supplier's Engineer as
specified in Appendix 7-5 (The Supplier's Engineer's Technical Services
and Working Conditions) hereto.
All guarantee figures to be tested are specified in Appendix 5
(Process Performance Guarantees) hereto. The Performance Test shall be
completed in days.
25.2.5 The progress and the result of the Performance Test shall be
recorded in detail by both parties. Within three days after the completion
of the Performance Test, the said report of the Performance Test shall be
confirmed and signed by the representatives of the Buyer and the Supplier.
25.3 Acceptance
25.3.1 Acceptance shall occur in respect of the Contract Plant when:
(a) the Performance Test has been successfully completed and the
Process Performance Guarantees specified in Appendix 5 (Process
Performance Guarantees) hereto are met; or
(b) the Performance Test has not been successfully completed for
reasons not attributable to the Supplier within months from the
date of the Last Major Shipment as specified in Article 25. 2.2 above; or
(c) the Supplier has paid the liquidated damages specified in Article
28.4 (Failure to Meet Performance Guarantees) hereof;
25.3.2 At any time after any of the events set out in Article 25.3.1
above has occurred, the Supplier may give a notice to the Buyer requesting
the issue of an Acceptance Certificate in respect of the Contract Plant as
at the date of such notice.
25.3.3 The Buyer shall within seven (7) days after receipt of the
Supplier's notice issue such Acceptance Certificate.
25.3.4 If, within seven (7) days after receipt of the Supplier' s
notice, the Buyer fails to issue the Acceptance Certificate or fails to
inform the Supplier in writing of the justifiable reasons why the Buyer
has not issued the Acceptance Certificate, the Contract Plant thereof
shall be deemed to have been accepted as at the date of the Supplier's
said notice.
PART VI Guarantees and Liabilities
Article 26. Delivery Time Guarantee
26.1 Delivery Time Guarantee
The Supplier guarantees that it shall deliver to the Buyer;
(a) each such basic lot of the Equipment within such corresponding
Time for Delivery, as referred to in Article 22.2.1 hereof and finally
fixed in the final delivery schedule pursuant to Article 22.2.3 hereof,
and
(b) each such basic item of the Technical Documents whose Time for
Delivery is guaranteed as specified in Appendix 7-4 (Time Schedule) hereto
within the corresponding Time for Delivery specified therein,
subject, however, to any extension of each such Time for Delivery to
which the Supplier shall be entitled under Article 37 (Extension of Time
for Delivery) hereof.
26.2 Late Delivery of Equipment
If the Supplier fails to deliver to the Buyer any portion of the
Equipment included in such a basic lot within such corresponding Time for
Delivery, as specified in Article 26.1 (Delivery Time Guarantee) above or
any extension thereof under Article 37 (Extension of Time for Delivery)
hereof, the Supplier shall pay to the Buyer liquidated damages for each
such delayed portion of the Equipment at the following rates for every
week of delay, providing that fractions of four days or more shall be
counted as one week and fraction(s) of less than four days shall be
omitted:
(a) For the first four weeks of delay:
per cent ( %) of the invoiced amount of the delayed
portion of the Equipment per week
(b) For the second four weeks of delay following the first four weeks
of delay:
per cent ( %) of the invoiced amount of the delayed
portion of the Equipment per week
(c) For the ninth and subsequent week(s) of delay:
per cent ( %) of the invoiced amount of the delayed
portion of the Equipment per week
Such monies shall be paid as liquidated damages and not as a penalty.
The total aggregate amount of such liquidated damages shall in no event
exceed per cent ( %) of the Contract Price for the
Equipment specified in Article 12 (Contract Price and Technical Service
Fee) hereof.
26.3 Late Delivery of Technical Documents
If the Supplier fails to deliver to the Buyer any basic item of the
Technical Documents specified in Appendix 7-4 (Time Schedule) hereto whose
Time for Delivery is guaranteed under Article 26.1 (Delivery Time
Guarantee) above within the corresponding Time for Delivery specified in
Appendix 7-4 (Time Schedule) hereto or any extension thereof under Article
37 (Extension of Time for Delivery) hereof, the Supplier shall pay to the
Buyer liquidated damages for each such delayed basic item of the Technical
Documents at the following rates for every week of delay, providing that
fractions of four days or more shall be counted as one week and
fraction(s) of less than four days shall be omitted:
(a) For the first four weeks of delay:
percent ( %) of the Total Design Fee specified in
Article 12 (Contract Price and Technical Service Fee) hereof per week
(b) For the second four weeks of delay following the first four weeks
of delay:
percent ( %) of the aforesaid Total Design Fee per
week
(c) For the ninth and subsequent week(s) of delay:
percent ( %) of the aforesaid Total Design Fee per
week
Such monies shall be paid as liquidated damages and not as a penalty.
The total aggregate amount of such liquidated damages shall in no event
exceed per cent ( %) of the aforesaid Total Design Fee.
26.4 Payment of Liquidated Damages
The payment of liquidated damages under Articles 26.2 (Late Delivery
of Equipment) and 26.3 (Late Delivery of Technical Documents) above shall
be in complete satisfaction of the Supplier's obligation to deliver to the
Buyer the relevant Equipment or the relevant Technical Documents within
the corresponding Time for Delivery specified in Article 26.1 (Delivery
Time Guarantee) above or any extension thereof under Article 37 (Extension
of Time for Delivery) hereof and the Supplier shall have no further
liability whatsoever to the Buyer in respect thereof.
However, such payment of liquidated damages shall not in any way
relieve the Supplier from any of its obligations to deliver to the Buyer
the Equipment and the Technical Documents or from any other obligations
and liabilities of the Supplier under the Contract.
Save for liquidated damages payable under Articles 26.2 (Late Delivery
of Equipment) and 26.3 (Late Delivery of Technical Documents) above, the
failure by the Supplier to attain any milestone or other act, matter or
thing by any such date or within any such time, as specified in Appendix
7-4 (Time Schedule) hereto and/or other program of the Works prepared
pursuant to Article 19 (Work Program) hereof shall not render the Supplier
liable for any loss or damage thereby suffered by the Buyer.
Article 27. Defect Liability
27.1 Guarantees and Defect Liability Period
27.1.1 The Supplier guarantees that;
(a) the Equipment or any part thereof shall be free from defects in
design, materials and workmanship,
(b) the Technical Documents or any part thereof, except for those
which are of preliminary nature or to be delivered to the Buyer by the
Supplier for the Buyer's information, shall be correct and have
consistency in the contents thereof and shall be sufficient to enable the
internationally competent recognized engineers to understand the contents
thereof, and
(c) the technical advice and instructions given in writing by the
Supplier's Engineer during his performance of the Technical Services shall
be correct.
27.1.2 The period of the validity of the guarantees given by the
Supplier under Article 27.1.1 above, i.e. the Defect Liability Period
defined in Article 1 (Definitions) hereof, shall commence from the date of
delivery of the relevant Equipment, the date of delivery of the relevant
Technical Documents or the date of provision of the relevant technical
advice or instructions given in writing by the Supplier's Engineer at the
Contract Plant, as the case may be, and shall end upon the expiry of
months from the date of the Last Major Shipment or twelve (12)
months from the date of the Acceptance of the Contract Plant, whichever
comes earlier, subject, however, to any extension under Article 27.2.7
hereof.
27.2 Defect Liability for Equipment
27.2.1 If, during the Defect Liability Period, any defect should be
found in the design, materials or workmanship of the Equipment or any part
thereof, the Supplier shall promptly and at its cost repair, replace or
otherwise make good (as the Supplier shall at its discretion determine)
such defect as well as any damage to the Equipment caused by such defect.
Provided that the Supplier shall not be responsible for the repair,
replacement or making good of any defect of or any damage to the Equipment
arising out of or resulting from any of the following causes:
(a) Improper design, engineering, storage, transportation, handling,
installation, erection, operation or maintenance of the Contract Plant by
or on behalf of the Buyer
(b) Any defect or deficiency in the equipment, machinery, materials
and other supplies for the Contract Plant supplied by or on behalf of the
Buyer
(c) Operation of the Contract Plant outside the specifications
provided in the Contract
(d) Failure on the part of the Buyer to follow and conform to the
Technical Documents and other recommendations, advice and instructions
provided by the Supplier or the Supplier's Engineer under the Contract
(e) Erosion or corrosion
(f) Normal wear and tear
27.2.2 The Supplier's obligations under this Article 27.2 (Defect
Liability for Equipment) shall not apply to;
(a) any equipment, machinery, material, and other supply which are
supplied by or on behalf of the Buyer under Article 10.3 hereof,
(b) any part of the Equipment which are normally consumed in operation
or which have a normal life shorter than the Defect Liability Period,
(c) any design, specification or other data designated, supplied or
specified by or on behalf of the Buyer or any matter for which the
Supplier has disclaimed responsibility hereunder, or
(d) any other material supplied or any work executed by or on behalf
of the Buyer, except for the work executed by the Buyer under Article
27.2.6 below.
27.2.3 The Buyer shall give the Supplier a notice stating the nature
of any such defect together with all available evidence thereof promptly
following the discovery thereof. The Buyer shall afford all reasonable
opportunity for the Supplier to inspect any such defect.
27.2.4 The Buyer shall afford the Supplier all necessary access to the
Contract Plant to enable the Supplier to perform its obligations under
this Article 27.2 (Defect Liability for Equipment).
The Supplier may with the consent of the Buyer remove from the
Contract Plant the Equipment or any part thereof which is defective if the
nature of the defect and/or any damage to the Equipment caused by the
defect is such that repairs cannot be expeditiously carried out at the
Contract Plant.
27.2.5 If the repair or replacement or making good is of such a
character that it may affect the efficiency of the Equipment or any part
thereof, the Buyer may give to the Supplier a notice requiring that tests
shall be made by the Supplier of the defective part of the Equipment
immediately on completion of such remedial work whereupon the Supplier
shall carry out such tests.
If such part fails the tests, the Supplier shall carry out further
repair, replacement or making good (as the case may be) until that part of
the Equipment passes such tests. The tests shall be agreed by the Buyer
and the Supplier.
27.2.6 If the Supplier fails to commence the work necessary to remedy
such defect or any damage to the Equipment caused by such defect within a
reasonable time, the Buyer may carry out such work in a reasonable manner,
and the reasonable direct costs incurred by the Buyer in connection
therewith shall be paid to the Buyer by the Supplier, providing that the
labor costs included in such costs shall be calculated based on the local
costs incurred in the country in which the Contract Plant is to be
constructed.
27.2.7 If the Equipment or any part thereof cannot be used by reason
of such defect and/or making good of such defect, the Defect Liability
Period of the Equipment or such part, as the case may be, shall be
extended by a period equal to the period during which the Equipment or
such part cannot be used by the Buyer due to any of the aforesaid reasons.
27.3 Defect Liability for Technical Documents
27.3.1 If, during the Defect Liability Period, any error or mistake
should be found in the Technical Documents or any part thereof;
(a) the Supplier shall promptly and at its cost correct such error or
mistake and re-deliver to the Buyer the Technical Documents or part(s)
thereof so corrected, and repair, replace or otherwise make good (as the
Supplier shall at its discretion determine) any such defect in, or any
such damage to, the Equipment or any part thereof, as caused by the said
error or mistake in the Technical Documents or any part thereof, subject
to the same conditions as set forth in Articles 27.2.1 through 27.2.7
above inclusive, or
(b) the Supplier shall be liable for, and pay to the Buyer, reasonable
direct costs incurred by the Buyer in repairing, replacing or otherwise
making good (as the Supplier shall at its discretion determine) any such
defect in, or any such damage to, any part of the Contract Plant other
than the Equipment supplied, or the works for the Contract Plant executed,
by or on behalf of the Buyer, as caused by the said error or mistake in
the Technical Documents or any part thereof, providing that the labor
costs included therein shall be calculated based on the local costs
incurred in the country in which the Contract Plant is to be constructed.
Provided that the Supplier shall not be responsible for any such error
or mistake in the Technical Documents or any part thereof as caused by
inaccurate drawings, data or information furnished to the Supplier by the
Buyer and for any defect in, or damage to, any part of the Contract Plant
or the works for the Contract Plant executed by or on behalf of the Buyer
or any other loss or damage incurred by the Buyer, arising out of or
resulting from any such error or mistake in the Technical Documents or any
part thereof as caused by inaccurate drawings, data or information
furnished to the Supplier by the Buyer, or any failure on the part of the
Buyer to fully comply with the Technical Documents.
27.3.2 The Buyer shall give the Supplier a notice stating the nature
of any error or mistake in the Technical Documents or any part thereof and
of any such defect in, or any such damage to, any part of the Contract
Plant or the works for the Contract Plant executed, by or on behalf of the
Buyer, as caused by the said error or mistake in the Technical Documents
or any part thereof, promptly following the discovery thereof. The Buyer
shall afford all reasonable opportunity for the Supplier to inspect any
such error or mistake or any such defect or damage.
27.3.3 Notwithstanding anything to the contrary provided in the
Contract, the aggregate liability of the Supplier to the Buyer arising out
of or in connection with the Technical Documents under this Article 27.3
(Defect Liability for Technical Documents), except for the liability to
correct the erroneous or defective Technical Documents and re-deliver the
Technical Documents so corrected and to repair, replace or otherwise make
good any defect in, or any damage to, the Equipment or any part thereof
under Article 27.3.1 above, shall not exceed per cent
( %) of the Total Design Fee specified in Article 12 (Contract
Price and Technical Service Fee) hereof.
27.4 Defect Liability for Technical Services
27.4.1 If, during the Defect Liability Period, any error or mistake
should be found in the technical advice and instructions given in writing
by the Supplier's Engineer during his performance of the Technical
Services;
(a) the Supplier shall promptly and at its cost reperform the
Technical Services related to such erroneous or mistaken written technical
advice or instructions and repair, replace or otherwise make good (as the
Supplier shall at its discretion determine) any such defect in, or any
such damage to, the Equipment or any part thereof, as caused by the said
error or mistake in the written technical advice or instructions, subject
to the same conditions as set forth in Articles 27.2.1 through 27.2.7
above inclusive, or
(b) the Supplier shall be liable for, and pay to the Buyer, reasonable
direct cost incurred by the Buyer in repairing, replacing or otherwise
making good (as the Supplier shall at its discretion determine) any such
defect in, or any such damage to, any part of the Contract Plant other
than the Equipment supplied, or the works for the Contract Plant executed,
by or on behalf of the Buyer, as caused by the said error or mistake in
the written technical advice or instructions, providing that the labor
costs included therein shall be calculated based on the local costs
incurred in the country in which the Contract Plant is to be constructed.
Provided that the Supplier shall not be responsible for the Technical
Services related to any such erroneous or mistaken written technical
advice or instructions as caused by inaccurate drawings, data or
information furnished to the Supplier by the Buyer and for any defect in,
or damage to, any part of the Contract Plant or the works for the Contract
Plant executed by or on behalf of the Buyer or any other loss or damage
incurred by the Buyer, arising out of or resulting from any such error or
mistake in the written technical advice or instructions given by the
Supplier's Engineer as caused by inaccurate drawings, data or information
furnished to the Supplier by the Buyer, or any failure on the part of the
Buyer to fully comply with the written technical advice or instructions
given by the Supplier's Engineer, or any performance by the Buyer without
attendance of the Supplier's Engineer of any procedure, test, program or
work which are subject to the attendance of the Supplier's Engineer under
the Contract.
27.4.2 The Buyer shall give the Supplier a notice stating the nature
of any error or mistake in the aforesaid written technical advice or
instructions given by the Supplier's Engineer and of any such defect in,
or any such damage to, any part of the Equipment or any part of the
Contract Plant other than the Equipment supplied, or the works for the
Contract Plant executed, by or on behalf of the Buyer, as caused by the
said error or mistake in the written technical advice or instructions
given by the Supplier's Engineer, promptly following the discovery
thereof. The Buyer shall afford all reasonable opportunity for the
Supplier to inspect any such defect or damage.
27.4.3 Notwithstanding anything to the contrary provided in the
Contract, the aggregate liability of the Supplier to the Buyer arising out
of or in connection with the Technical Services under this Article 27.4
(Defect Liability for Technical Services), except for the liability of the
Supplier to reperform the Technical Services related to the erroneous or
mistaken written technical advice or instructions and to repair, replace
or otherwise make good any defect in, or any damage to, any part of the
Equipment under Article 27.4.1 above, shall not exceed per cent
( %) of the total sum of the Technical Service Fee which the
Supplier shall have received from the Buyer.
27.5 Except as provided in this Article 27 (Defect Liability) and
Article 32 (Loss or Damage to Property/Accident or Injury to
Workmen/Indemnification) hereof, the Supplier shall be under no liability
whatsoever and howsoever arising, and whether under the Contract or at
law, in respect of defects in the Contract Plant or the Equipment or any
part thereof, materials, design or engineering or work executed or errors
or mistakes in the Technical Documents or any part thereof or in the
Technical Services.
Article 28. Process Performance Guarantees
28.1 Process Performance Guarantees and Performance Test
The Supplier guarantees that, during the Performance Test or any
repeated run thereof, the Contract Plant shall attain the Process
Performance Guarantees specified in Appendix 5 (Process Performance
Guarantees) hereto subject to and upon the conditions specified in this
Article 28 (Process Performance Guarantees) and the said Appendix 5.
28.2 Preconditions
The Process Performance Guarantees under Article 28.1 (Process
Performance Guarantees and Performance Test) above shall be expressly
conditioned upon the following being fully satisfied or fulfilled by or on
behalf of the Buyer:
(a) Any and all supplies and works (except for those falling within
the Supplier's scope of supplies and services under the Contract), such as
design of the Contract Plant (other than the Equipment) and/or its
associated facilities to be executed by or on behalf of the Buyer,
equipment, machinery and materials for the Contract Plant (other than the
Equipment) and/or its associated facilities to be supplied by or on behalf
of the Buyer, civil, building, erection, installation and commissioning
works and operation and maintenance of the Contract Plant and/or its
associated facilities, shall be properly provided or performed by the
Buyer and shall be in accordance with the requirements under the Contract,
the Technical Documents and the technical advice and instructions given by
the Supplier's Engineer under the Contract.
(b) The Buyer shall, during the Commissioning and the Performance Test
of the Contract Plant (including any repeated run thereof) provide, at its
own expense skilled and well-trained laborers and operators, raw
materials, lubricants, consumables, other materials and supplies, tools,
testing and measuring devices and utilities in reasonably sufficient
quantity with required quality, needed for proper execution of the
Commissioning and the Performance Test (including any repeated run
thereof), in accordance with the requirements under the Contract, the
Technical Documents and the technical advice and instructions given by the
Supplier's Engineer under the Contract, and shall give the Supplier's
Engineer opportunities to check them in advance or at all reasonable times
during the Commissioning and the Performance Test (including any repeated
run thereof). The Supplier's Engineer may reject such laborers and
operators, raw materials, lubricants, consumables, other materials and
supplies, tools, testing and measuring devices and utilities which the
Supplier's Engineer deems to be unsuitable, of insufficient quality, not
suitably prepared or otherwise inadequate for the Commissioning or the
Performance Test (including any repeated run of said Performance Test).
(c) The Performance Test (including any repeated run thereof) shall be
carried out by the Buyer under the technical advice and instructions given
by the Supplier's Engineer under the Contract, in accordance with such
procedures programs, methods, testing conditions and other terms and
conditions as provided for in the Contract and in compliance with the
relevant Technical Documents.
28.3 Minimum Level
If, for reasons attributable to the Supplier, the minimum level of the
Process Performance Guarantees specified in Appendix 5 (Process
Performance Guarantees) hereto is not met either in whole or in part
during the Performance Test, the Supplier shall at its cost and expense
make such changes, modifications and/or additions to the Contract Plant or
any part thereof as may be necessary so as to meet at least the minimum
level of such guarantee, in such manner and to such extent as specified in
Articles 27.2.1, 27.3.1 and 27.4.1 above. The Supplier shall notify the
Buyer upon completion of the necessary changes, modifications and/or
additions and shall repeat the Performance Test in the same manner as that
of the first Performance Test until the minimum level of such guarantee
has been met.
28.4 Failure to Meet Performance Guarantees
If, for reasons attributable to the Supplier, the Process Performance
Guarantees specified in Appendix 5 (Process Performance Guarantees) hereto
are not attained either in whole or in part, but the minimum level of the
Process Performance Guarantees is met during the Performance Test, the
Supplier shall, at its option, either;
(a) make such changes, modifications and/or additions to the Contract
Plant or any part thereof as may be necessary in order to attain the
Process Performance Guarantees in such manner and to such extent as
specified in Articles 27.2.1, 27.3.1 and 27.4.1 above at its cost and
expense and/or offer the Buyer to change the operating conditions of the
Contract Plant whereupon a further Performance Test shall be carried out
in the same manner as that of the first Performance Test, subject,
however, to the changed operating conditions of the Contract Plant, if so
mutually agreed upon, or
(b) pay liquidated damages to the Buyer in respect of the failure to
meet the Process Performance Guarantees in accordance with Appendix 5
(Process Performance Guarantees) hereto.
If the Supplier exercises the option specified in item (a) above, and
any Performance Test carried out pursuant thereto fails to attain the
Process Performance Guarantees referred to above either in whole or in
part for reasons attributable to the Supplier, then the foregoing
procedures shall apply to the subsequent course of action and procedures
to be taken by the Supplier.
28.5 Payment of Liquidated Damages
The payment of liquidated damages under Article 28.4 (Failure to Meet
Performance Guarantees) above shall be in complete satisfaction of the
Supplier's guarantees under Article 28.1 (Process Performance Guarantees
and Performance Test) above and any other corresponding or equivalent
provision set out in the Contract (whether in Appendix 7 hereto or
otherwise) and the Supplier shall have no further liability whatsoever to
the Buyer in respect thereof. Upon the payment of such liquidated damages
by the Supplier, the Buyer shall issue the Acceptance Certificate for the
Contract Plant in respect of which the liquidated damages have been so
paid.
Article 29. Patent Indemnity
29.1 The Supplier shall, until the Cut-Off Date defined in paragraph 1
of Appendix 6 (License Conditions) hereto and subject to other conditions
set out therein including, but not limited to, the limitation of liability
pursuant to paragraph 5 thereof and to the Buyer's compliance with Article
29.2 below, indemnify and hold harmless the Buyer and its employees and
officers from and against any and all suits, actions or administrative
proceedings, claims, demands, losses, damages and costs and expenses of
whatsoever nature, including attorney's fees and expenses, which the Buyer
may suffer as a result of any infringement or alleged infringement of any
patent, utility model, registered design, trademark, copyright or other
intellectual property right registered or otherwise existing at the date
of this Agreement by reason of;
(a) the execution of the Works by the Supplier or the use of the
Contract Plant in the country where the Contract Plant is to be
constructed, or
(b) the sale of the products produced by the Contract Plant in any
country except those countries which are excluded or where restrictions
are placed on the Buyer as set out in Appendix 6 (Licence Conditions)
hereto.
Provided that such indemnity shall not cover any use of the Contract
Plant or any part thereof otherwise than for the purpose indicated by or
reasonably to be inferred from the Contract or any infringement which is
due to the use of the Contract Plant or any part thereof or any products
produced thereby in association or combination with any other equipment,
plant, material or process not supplied or licensed by the Supplier
pursuant to the Contract.
29.2 If any proceeding is brought or any claim is made against the
Buyer arising out of the matters referred to in Article 29.1 above, the
Buyer shall promptly give the Supplier a notice thereof and the Supplier
may at its own expense and in the Buyer's name conduct such proceeding or
claim and any negotiation for the settlement of any such proceeding or
claim.
If the Supplier fails to notify the Buyer within twenty-eight (28)
days after receipt of such notice that it intends to conduct any such
proceeding or claim, then the Buyer shall be free to conduct the same on
its own behalf. Unless the Supplier has so failed to notify the Buyer
within the twenty-eight (28) day period, the Buyer shall make no admission
which may be prejudicial to the defense of any such proceeding or claim.
The Buyer shall, at the Supplier's request, afford all available
assistance to the Supplier in conducting such proceeding or claim, and
shall be reimbursed by the Supplier for all reasonable expenses incurred
in so doing.
29.3 The Buyer shall indemnify and hold harmless the Supplier and its
employees, officers and Sub-contractors from and against any and all
suits, actions or administrative proceedings, claims, demands, losses,
damages and costs and expenses of whatsoever nature, including attorney's
fees and expenses, which the Supplier may suffer as a result of any
infringement or alleged infringement of any patent, utility model,
registered design, trademark, copyright or other intellectual property
right registered or otherwise existing at the date of this Agreement
arising out of or in connection with any design, data, drawing,
specification, or other document or material provided or designated by or
on behalf of the Buyer.
Article 30. Limitation of Liability
30.1 Notwithstanding anything to the contrary provided in the
Contract, the aggregate liability of the Supplier to the Buyer with
respect to the defect liability under Article 27 (Defect Liability), the
patent indemnity under Article 29 (Patent Indemnity) hereof and the
liquidated damages payable to the Buyer under Articles 26.2 (Late Delivery
of Equipment), 26.3 (Late Delivery of Technical Documents) and 28.4
(Failure to Meet Performance Guarantees) hereof, except for the liability
to repair, replace or otherwise make good any defect in, or any damage to,
the Equipment or any part thereof under Articles 27.2.1, 27.3.1, 27. 4.1
and 28.3 (Minimum Level) and 28.4 (Failure to Meet Performance Guarantees)
hereof, to correct the erroneous or mistaken Technical Documents and
re-deliver the Technical Documents so corrected under Article 27.3.1
hereof and to reperform the Technical Services related to the erroneous or
mistaken written technical advice or instructions given by the Supplier's
Engineer under Article 27.4.1 hereof, shall not exceed per cent
( %) of the Contract Price.
30.2 The Supplier shall in no event be liable to the Buyer by way of
indemnity or by reason of any breach of the Contract or in tort or
otherwise for loss of or damage to any facility, equipment, machinery or
material other than the Contract Plant and for loss of use of the Contract
Plant and/or its associated facilities or any part thereof or for loss of
production, loss of profit or loss of any contract, or for any indirect,
special or consequential loss or damage that may be suffered by the Buyer
in connection with the Contract.
PART VII Risk Distribution
Article 31. Transfer of Risk of Loss and Buyership
31.1 Risk of loss of the Equipment shall be transferred from the
Supplier to the Buyer upon delivery of the Equipment as specified in
Article 22.2 (Delivery) hereof in accordance with the provisions of
Incoterms. Buyership of the Equipment shall be transferred from the
Supplier to the Buyer upon transfer of risk of loss of the Equipment as
specified above.
31.2 Risk of loss of the Technical Documents shall be transferred from
the Supplier to the Buyer upon its delivery to transportation company (in
case of air cargo) or special courier services company (in case of special
courier services). Buyership of the Technical Documents subject to
limitations specified in the relevant provisions hereof shall also be
transferred to the Buyer upon delivery of the Technical Documents as
specified above.
Article 32. Loss or Damage to Property/Accident or to Workmen/ Indemnification
32.1 Each party hereto shall waive all claims for recovery from the
other party for any death or personal injury of any of its personnel or
loss or damage to any of its property (including the Contract Plant)
arising out of, or in connection with, its performance of the Contract.
32.2 The Buyer shall indemnify and hold harmless the Supplier and the
Supplier's Engineer from all claims or suits from third parties for any
death or personal injury arising out of, or in connection with, the
performance of the Works in the Buyer's country.
32.3 The party entitled to the benefit of an indemnity under this
Article 32 shall take all reasonable measures to mitigate any loss or
damage which has occurred. If the party fails to take such measures, the
other party's liabilities shall be correspondingly reduced.
Article 33. Insurance
33.1 Each party shall at its expense take out and maintain in effect,
or cause to be taken out and maintained in effect, appropriate insurances
during the performance of the Contract.
Article 34. Change In Laws and Regulations
34.1 If, after the date of the Agreement, in any country where the
Equipment or any part thereof is to be manufactured or in the country
where the Contract Plant is located, any law, regulation, ordinance, order
or by-law having the force of law is enacted, promulgated, abrogated or
changed (which shall be deemed to include any change in interpretation or
application by the competent authorities) which subsequently affects the
costs and expenses of the Works, the Contract Price shall be
correspondingly increased or decreased to the extent that the Supplier has
thereby been affected in the performance of any of its obligations under
the Contract.
Article 35. Force Majeure
35.1 "Force Majeure" shall mean any event beyond the reasonable
control of the Buyer or the Supplier, as the case may be, and which is
unavoidable notwithstanding the reasonable care of the party affected, and
shall include, without limitation, the following:
(a) war, hostilities or warlike operations (whether a state of war be
declared or not), invasion, act of foreign enemy, civil war; or
(b) rebellion, revolution, insurrection, mutiny, usurpation of civil
or military government, conspiracy, riot, civil commotion, terrorist acts;
or
(c) confiscation, nationalization, mobilization, commandeering or
requisition by or under the order of any government or de jure or de facto
authority or ruler or any other act or failure to act of any local state
or national government authority; or
(d) strike, sabotage, lock-out, embargo, import restriction, port
congestion, lack of usual means of public transportation and
communication, industrial dispute, shipwreck, shortage or restriction of
power supply, epidemics, quarantine, plague; or
(e) earthquake, landslide, volcanic activity, fire, flood or
inundation, tidal wave, typhoon or cyclone, hurricane, storm, lightning,
or other inclement weather condition, nuclear and pressure waves, or other
natural or physical disaster; or
(f) shortage of labor, materials or utilities where caused by
circumstances that are themselves Force Majeure.
35.2 If either party is prevented, hindered or delayed from or in
performing any of its obligations under the Contract by an event of Force
Majeure, then it shall notify the other in writing of the occurrence of
such event and the circumstances thereof within fourteen (14) days after
the occurrence of such event.
35.3 The party who has given such notice shall be excused from the
performance or punctual performance of its obligations under the Contract
for so long as the relevant event of Force Majeure continues and to the
extent that such party's performance is prevented, hindered or delayed.
The Time for Delivery shall be extended in accordance with Article 37
(Extension of Time for Delivery) hereof.
35.4 The party or parties affected by the event of Force Majeure shall
use reasonable efforts to mitigate the effect thereof upon its or their
performance of the Contract and to fulfill its or their obligations under
the Contract, but without prejudice to either party's right to terminate
the Contract under Article 35.6 below.
35.5 No delay or non-performance by either party hereto caused by the
occurrence of any event of Force Majeure shall:
(a) constitute a default or breach of the Contract; or
(b) give rise to any claim for damages or additional cost or expense
occasioned thereby,
if and to the extent that such delay or non-performance is caused by
the occurrence of an event of Force Majeure.
35.6 if the performance of the Works is substantially prevented,
hindered or delayed for an aggregate period of more than one hundred and
twenty days on account of one or more events of Force Majeure during the
currency of the Contract, either party may terminate the Contract by
giving a notice to the other.
35.7 In the event of termination pursuant to Article 35.6 above, the
rights and obligations of the Buyer and the Supplier shall be as specified
in Articles 39.1.2 and 39.1.3 hereof, except that the Supplier shall have
no entitlement to profit under paragraph (e) of the said Article 39.1.3 in
respect of any unexecuted Works as at the date of termination.
35.8 Notwithstanding Article 35.5 above, Force Majeure shall not apply
to any obligation of the Buyer to make payments to the Supplier hereunder.
PART VIII Change in Contract Elements
Article 36. Change in Works
36.1 Subject to Articles 36.7 and 36.8 below, the Buyer shall have the
right to request and subsequently to order the Supplier from time to time
during the performance of the Contract to make any change, modification,
addition or deletion to, in or from the Works (hereinafter called
"Change"), provided that such Change falls within the general scope of the
Works and does not constitute unrelated work and that it is technically
practicable, taking into account both the state of advancement of the
Works and the technical compatibility of the Change envisaged with the
nature of the Works as specified in the Contract.
36.2 The Supplier may from time to time during its performance of the
Contract propose to the Buyer any Change which the Supplier considers
necessary or desirable to improve the quality, efficiency or safety of the
Works. The Buyer may at its discretion approve or reject any Change
proposed by the Supplier, provided that the Buyer shall approve any Change
proposed by the Supplier to ensure the safety of the Works.
36.3 Notwithstanding Articles 36.1 and 36.2 above, no change made
necessary due to any default of the Supplier in the performance of its
obligations under the Contract shall be deemed to be a Change and such
change shall not result in any adjustment of the Contract Price or the
Time for Delivery.
36.4 If either party proposes a Change pursuant to Articles 36. 1 and
36.2 above, the Supplier shall prepare and furnish to the Buyer as soon as
reasonably practicable a written statement setting out full details of any
such Change, the reasons therefor if proposed by the Supplier, the Works
and/or work required or no longer required, an estimate of the increase or
decrease in the Contract Price, any requisite adjustment to the Time for
Delivery, and any proposed modifications to the Contract and/or any effect
such Change would have on the Works and/or on any other provisions of the
Contract if the contemplated Change is effected, as the case may be.
36.5 If, in the case of a Change proposed by either the Buyer or the
Supplier, the Buyer and the Supplier reach agreement on all matters
identified in the written statement furnished by the Supplier pursuant to
Article 36.4 above within a reasonable time thereafter, then the Buyer
shall issue a Change order giving effect thereto (hereinafter called
"Change Order"). Such Change Order shall contain full particulars of the
Change, any adjustment of the Contract Price and/or the Time for Delivery
and all other modifications to the Contract and shall be signed by the
Buyer and the Supplier. Such Change shall thereupon be deemed to form part
of the Works.
36.6 The Supplier may object to any Change requested by the Buyer
where the aggregate effect of compliance therewith and with all other
Change Orders which have already become binding upon the Supplier under
this Article 36 would be to increase or decrease the Contract Price as
originally set forth in Article 12 (Contract Price and Technical Service
Fee) hereof by more than fifteen per cent, provided, however, that the
addition to the Contract Price of the price for any Nominated
Sub-contractor under Article 20.2 (Nominated Sub-contractor(s)) hereof
shall not be counted for this purpose. The Supplier may give a notice of
objection thereto prior to furnishing the written statement pursuant to
Article 36.4 above. If the Buyer accepts the Supplier's objection, the
Buyer shall withdraw the proposed Change and notify the Supplier in
writing thereof.
The Supplier's failure so to object shall neither affect its right to
object to any subsequent requested Changes or Change Orders hereunder, nor
affect its right to take into account, when making such subsequent
objection, the percentage increase or decrease in the Contract Price which
any Change not objected to by the Supplier represents.
36.7 If the Supplier fails to furnish the statement referred to in
Article 36.4 above within a reasonable period or, if the Buyer, after
negotiation with the Supplier, does not agree within a reasonable period
to the amount of the increase or decrease in the Contract Price, the
adjustment of the Time for Delivery, and/or any other modification to the
Contract proposed by the Supplier or to the Supplier's entitlement to
object to the Change under Article 36.6 above, the Buyer shall have the
right to decide whether or not to effect such Change, irrespective of
whether such Change has been proposed under Article 36.1 or Article 36.2
above. The Buyer may issue a written instruction to the Supplier to carry
out the Change pending agreement on such matters with the Supplier.
If an agreement is not reached between the Buyer and the Supplier
within sixty (60) days after the Buyer's instruction to carry out the
Change, concerning the increase or decrease in the Contract Price and all
of the other matters described above, either party may refer the dispute
to an Expert pursuant to Article 7.2 (Reference to Expert) hereof.
36.8 If the Buyer requests a Change and subsequently decides not to
order such Change, the Supplier shall be entitled to reimbursement of all
costs incurred by it for the work involved in preparing the statement
referred to in Article 36.4 above, provided that the Supplier has given a
prior notice to the Buyer of the approximate costs it will incur and its
intention to claim reimbursement thereof, and the Buyer has agreed that
the Supplier should proceed with the preparation of the statement on this
basis.
Article 37. Extension of Time for Delivery
37.1 The Time for Delivery shall be extended if the Supplier shall be
delayed or impeded in the performance of any of its obligations under the
Contract by reason of any of the following:
(a) any change in the Works as provided in Article 36 (Change in
Works) hereof; or
(b) any occurrence of Force Majeure as provided in Article 35 (Force
Majeure) hereof; or
(c) any suspension order given by the Buyer under Article 38
(Suspension) hereof or reduction in the rate of progress pursuant to
Article 38,2 hereof;
(d) any default or breach of the Contract by the Buyer or any
activity, act or omission of any other contractors employed by the Buyer;
or
(e) any other matter specifically mentioned in the Contract;
by such period as shall be fair and reasonable in all the
circumstances and as shall fairly reflect the delay or impediment
sustained by the Supplier.
37.2 Except where otherwise specifically provided elsewhere in the
Contract, the Supplier shall submit to the Buyer a notice of a claim for
an extension of the Time for Delivery, together with particulars of the
event or circumstance justifying such extension as soon as reasonably
practicable after the commencement of such event or circumstance. As soon
as reasonably practicable after receipt of such notice and supporting
particulars of the claim, the Buyer and the Supplier shall agree upon the
period of such extension, failing which either party may refer the dispute
to an Expert pursuant to Article 7.2 (Reference to Expert) hereof.
37.3 The Supplier shall at all times use its reasonable efforts to
minimize any delay in the performance of its obligations under the
Contract.
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