STANDARD

EQUIPMENT SUPPLY CONTRACT

between
Rupali Polyester Limited, Lahore, Pakistan
Hereinafter called the PURCHASER,
and
Rolls-Royce Power Engineering Plc
hereinafter called the SUPPLIER,

Purchaser Contract Ref No.

Supplier Contract Reference No.

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INDEX
1

DEFINITIONS............................................................................................................................................... 3

ELEMENTS OF THE CONTRACT............................................................................................................... 5

SCOPE OF SUPPLY.................................................................................................................................... 5

DELIVERY.................................................................................................................................................... 7

OFFICIAL APPROVALS............................................................................................................................... 8

REPRESENTATIVES.................................................................................................................................... 8

INFORMATION, DRAWINGS AND DATA.................................................................................................... 8

VARIATIONS TO EQUIPMENT SUPPLY..................................................................................................... 8

PROJECT TIME SCHEDULE....................................................................................................................... 9

10

TRANSFER OF TITLE AND RISK............................................................................................................... 9

11

WARRANTY............................................................................................................................................... 10

12

INSTALLATION, COMMISSIONING, TEST AND PROVISIONAL TAKE OVER........................................11

13

FINAL ACCEPTANCE................................................................................................................................ 12

14.

PERFORMANCE........................................................................................................................................

145

CONTRACT PRICE.................................................................................................................................... 12

156

TERMS OF PAYMENT............................................................................................................................... 12

167

CUSTOMS, IMPORT DUTIES, TAXES AND OTHER CHARGES.............................................................13

178

BANK GUARANTEE.................................................................................................................................. 13

189

LIQUIDATED DAMAGES LIABILITY......................................................................................................... 14

1920

LIABILITY.................................................................................................................................................... 14

2021

PERFORMANCE AND RELIABILITY

TESTS.

22.

SUSPENSION................................................................................................... Error! Bookmark not defined.

213

TERMINATION OF THE CONTRACT........................................................................................................ 15

224

FORCE MAJEURE..................................................................................................................................... 17

235

ARBITRATION........................................................................................................................................... 18

246

ASSIGNMENT.................................................................................................. Error! Bookmark not defined.

257

ENTIRE AGREEMENT............................................................................................................................... 18
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268

RIGHTS OF THIRD PARTIES.................................................................................................................... 18

279

APPLICABLE LAW.................................................................................................................................... 19

3028

PATENTS AND USE OF DOCUMENTATION............................................................................................. 19

2931

EFFECTIVE DATE OF CONTRACT........................................................................................................... 19

302

LEGAL ADDRESSES AND AUTHORISED REPRESENTATIVES............................................................19

APPENDICES......................................................................................................................................................... 19
Preamble
I

WHEREAS the SUPPLIER is a Rolls-Royce Power Engineering, a company duly organised

and existing under the Laws of England, whose registered office is at Moor Lane, Derby,
England, DE24 8BJ, and whose trading address is Sandland Court, Pilgrim Centre, Brickhill
Drive, Bedford, England, MK41 7PZpublic company limited by shares incorporated and existing
under the laws of the Islamic Republic of Pakistan and has its head office
at________________________________; and

II.

WHEREAS the PURCHASER is RUPALI POLEYSTER LIMITED a public company limited by

shares incorporated and existing under the laws of the Islamic Republic of Pakistan and having
its head office at241-242 Upper Mall Scheme, Anand Road, Lahore, Pakistan
________________________________a company incorporated and existing under the laws of
the ________________ having its head office at ________________ ____ _____
_______________; and

III.

WHEREAS the PURCHASER intends to purchase EQUIPMENT from the SUPPLIER, and
SUPERVISION from the INSTALLATION ADVISOR appointed by the SUPPLIER, which is
highly developed and tested to each customers specific requirements. SUPPLIERs
EQUIUPMENT is designed for stationary, continuous duty operation, and characterized by
particularly high efficiencies, low emissions and high durability and reliability; and

IV.

WHEREAS the PURCHASER has/is going to purchase(d) certain EQUIPMENT and services
from the SUPPLIER and/or its SUB-SUPPLIERS and SUPERVISON from the INSTALLATION
ADVISOR (S), so that the PURCHASER will get the whole plant for generation of electricity,
which will work in harmony and in a synchronized manner with the existing power plant of the
PURCHASER.

NOW THEREFORE, IN CONSIDERATION OF THE PROMISES AND MUTUAL AGREEMENT HEREIN

CONTAINED THE PARTIES AGREE AS FOLLOWS:
1

DEFINITIONS

The following terms with capital letters shall have the meanings defined below unless in any particular
instance the CONTRACT expressly indicates otherwise. Words importing persons include corporations
and words importing the singular include the plural and vice versa where the context requires.
1.1

ACCEPTANCE- Shall mean the event of signing a certificate of the EQUIPMENT; it shall also mean
the event on which, according to the stipulations of the CONTRACT, PURCHASER accepts the
EQUIPMENT after the successfully completion of the PERFORMANCE TESTS.all the
EQUIPMENT is deemed to be accepted.

1.2

APPLICABLE RULES - Shall mean IEC codes, standards and regulations as far as this CONTRACT
provides for their application to the performance of the CONTRACT and Laws and Regulations
being in force in Pakistan to the extent they are mandatory for the performance of the CONTRACT.
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1.3

AMENDMENT - Shall mean a document signed by the PARTIES, which introduces modifications to
the CONTRACT or any CONTRACT element in accordance with Article 8.

1.4

BANK GUARANTEE Shall mean the BANK GUARANTEE referred to in Article 17.

1.5

BATTERY LIMITS- Shall mean as defined in Appendix 10

CHANGE ORDER Shall mean any request by the PURCHASER to the SUPPLIER for a change,
modification, addition or deletion with respect to the EQUIPMENT that affects the CONTRACT PRICE, the
PROJECT TIME SCHEDULE (APPENDIX 1), any of the Performance Guarantees or any material right or
obligation of either PARTY.
1.6

CONTRACT - Shall mean all the terms and provisions appearing in the Articles of this document .

1.7

CONTRACT PRICE - Shall mean the fixed amount to be paid by PURCHASER to SUPPLIER for the
EQUIPMENT as described in CONTRACT PRICE AND TERMS OF PAYMENT SCHEDULE
(APPENDIX 3).

1.8

COMMISSIONING- Shall mean the successful operation of the EQUIPMENT until PROVISIONAL
TAKE OVER, duringafter which period the PERFORMANCE AND RELIABILITY TESTS will also
take place.

1.9

DELIVERABLE(S) - Shall mean Combined Cycle Equipment Generator Sets and Steam Turbine
as per Scope of Supply & Technical Specification .

1.10

DELIVERY - Shall mean terms as defined in Article 4 and the SPECIAL CONDITIONS.

1.11

EQUIPMENT Shall mean Combined Cycle Equipment Generator Sets and Steam TurbineTurbocharged Gas Engine Generator Sets
as per Scope of Supply & Technical Specification
(APPENDIX 9 ).equipment supplied by the SUPPLIER under this CONTRACT

1.12 ENGINEERING- Shall mean SUPPLIERs performance of detail and basic engineering under the
CONTRACT in respect of the Equipment in accordance with the APPENDIX 9.
1.13

ERECTION- Shall mean the installation by PURCHASER, of all equipment and materials forming all
together the EQUIPMENT , including MECHANICAL TESTSCOMMISSIONING, under the
SUPERVISION of the INSTALLATION ADVISOR appointed by the SUPPLIER and in accordance
with the written instructions contained in the Technical Specifications;

1.14

FACTORY TEST - Shall mean testing of EQUIPMENTDELIVERABLE(S) as defined in Technical

Specification.

1.15

FINAL ACCEPTANCE Shall mean the time at which the PURCHASER accepts the EQUIPMENT
after the expiration of the WARRANTY PERIOD

1.16

INSTALLATION ADVISOR (S) Shall mean the INSTALLATION ADVISOR appointed by the
SUPPLIER for carrying out the SUPERVISION work with adequate technical knowledge and
experience to fulfil the obligations under the CONTRACT. INSTALLATION ADVISOR shall be
assigned/delegated by SUPPLIER pursuant to this CONTRACT to perform SUPERVISION on the
SITE in Pakistan as per Article 1.28, Article 3.4 and APPENDIX 1 and APPENDIX 9.

1.17

MECHANICAL COMPLETION- Shall mean the state and/or the date when all EQUIPMENT has
been erected and installed

1.18

MECHANICAL TESTS Shall mean the running of individual equipment and materials (including the
EQUIPMENT), with water, electricity, air, no-load tests, loop tests, and/or whatever else is required
to check and to verify the MECHANICAL COMPLETION and the mechanical readiness of all the
equipment and materials (including the EQUIPMENT) for START-UP under the SUPERVISION of
the INSTALLATION ADVISOR appointed by SUPPLIER;
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1.19

PARTY or PARTIES - Shall mean either the PURCHASER or the SUPPLIER or both, as the wording
indicates.

1.20

PERFORMANCE TESTS - Shall mean the formal procedure of continuous operation of the
EQUIPMENT for the purpose of demonstrating fulfilment of SUPPLIERs WARRANTY as per Article
11 below, tests executed according toall as stipulated and provided for in the provisions of
Commissioning Procedure,Article 21 below.

1.21

PRODUCT(S) - Shall mean electrical power as the context may provided, specified and guaranteed
in Appendix 11 for the industrial/commercial use in the Industry

1.22

PROJECT TIME SCHEDULE (APPENDIX 1) - Shall mean the schedule for delivery, ERECTION,
COMISSIONING, PERFORMANCE TESTS and ACCEPTANCE of the EQUIPMENT.

1.23

PROVISIONAL TAKE OVER- Shall mean the successful completion of the Commissioning, Start Up
and Test Run.

1.24

PURCHASER - Shall mean Gulf Electric Power Ltd RUPALI POLEYSTER LIMITED a public
company limited by shares incorporated and existing under the laws of the Islamic Republic of
Pakistan and having its head office at________________________________

1.25

RISK - Shall mean as defined per DELIVERY term and Incoterms 2000.

1.26

SITE - Shall mean the actual place where the EQUIPMENT is to be erected.

1.27

SPARE PARTS- Shall mean those items which are mutually agreed between the SUPPLIER and the
PURCHASER to be the replacement parts of the EQUIPMENT as per APPENDIX 12.

1.28

SPECIAL CONDITIONS Shall mean the agreed deviations to the terms and conditions of the
CONTRACT as set out in the SPECIAL CONDITIONS.

1.29

SUB-SUPPLIER(S) - Shall mean all persons and companies and their employees, used by the
SUPPLIER in accordance with the CONTRACT, and in accordance with the list provided by the
Supplier to the Purchaser in advance, to perform effective delivery, ERECTION,
COMMISSIONING, PERFORMANCE TESTS and ACCEPTANCE of the EQUIPMENT supply.

1.30

SUPERVISION Shall mean the technical services, direction, instructions, advise, guidance, and
supervision by the INSTALLATION ADVISOR for the purposes of ERECTION, MECHANICAL
TESTS, MECHANICAL COMPLETION, COMMISSIONING, START-UP, operation and conduct of
PERFORMANCE AND RELIABILITY TESTS of the EQUIPMENT till PROVISIONAL TAKE OVERtill
ACCEPTANCE as specified in Article 3.4 and Article 21, and it shall be the responsibility of the
SUPPLIER as detailed in Article 3.4.

1.31

SUPPLIER - Shall mean Rolls-Royce Power Engineering, a company duly organised and existing
under the Laws of England, whose registered office is at Moor Lane, Derby, England, DE24 8BJ,
and whose trading address is Sandland Court, Pilgrim Centre, Brickhill Drive, Bedford, England,
MK41 7PZ.

1.32
1.33

1.34
1.35

1.36

SUPERVISION Shall mean the technical services, direction, instructions, advise, guidance, and
supervision for the purposes of ERECTION, MECHANICAL TESTS, MECHANICAL COMPLETION,
COMMISSIONING, START-UP, operation and conduct of PERFORMANCE AND RELIABILITY
TESTS of the EQUIPMENT till PROVISIONAL TAKE OVER as specified in Article 3.3.
SUPERVISOR(S) Shall mean any person(s) assigned/delegated by SUPPLIER pursuant to this
CONTRACT to perform SUPERVISION on the SITE in Pakistan as per Article 1.29, Article 3 and
APPENDIX 1 and APPENDIX 9. .
WARRANTY PERIOD Shall mean the period defined in Article 11.2
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WORK or WORKS - Shall mean all the EQUIPMENT and any services to be supplied by the
SUPPLIER under this CONTRACT.
ELEMENTS OF THE CONTRACT
The CONTRACT is made up of the documents listed below:
SPECIAL CONDITIONS
The CONTRACT
Appendices

2.2
3

The order of precedence of documents is as listed above.

SCOPE OF SUPPLY

3.1

The SUPPLIER undertakes to design, engineer, manufacture and deliver the EQUIPMENT
according to the Scope of Supply and the Technical Specification as specified in Appendix 9.

3.2

The SUPPLIER shall, in accordance with this CONTRACT and with due care and diligence, carry
out deliver the EQUIPMENT supply within the PROJECT TIME SCHEDULE (APPENDIX 1).

3.3

SUPPLIER shall supply the consumables SPARE PARTS for up to [----]16000 hours of
plantEQUIPMENT operation along with COMMISSIONING spares as defined in APPENDIX _12_ for
operations along with COMMISSIONING SPARE PARTS as specified in APPENDIX 9 and the
PURCHASER shall rely on the list of such SPARE PARTS supplied by the SUPPLIER.

3.4

SUPPLIER undertakes that SUPERVISION shall be conducted by the INSTALLATION ADVISOR (S)
on the SUPPLIERs behalf and the SUPPLIER shall be entirely responsible for such SUPERVISION.
For this purpose the SUPPLIER shall appoint the INSTALLATION ADVISOR and such
SUPERVISION by the SUPPLIERINSTALLATION ADVISOR shall include the following:

3.4.1

SUPERVISION of Erection, MECHANICAL COMPLETION, START-UP, COMMISSIONING and

PERFORMANCE AND RELIABILITY TEST of the EQUIPMENT during up to PROVISIONAL
TAKING OVER. Cost of such SUPERVISION is included in the CONTRACT PRICE.

3.4.2

SUPERVISION of piping works, including fabrication at the SITE during ERECTION of the
EQUIPMENT so as to ensure that the EQUIPMENT can achieve the Performance values as
specified in APPENDIX 11.

3.4.3

Assistance in working out and updating of the EQUIPMENT START-UP schedule from the view
point of EQUIPMENT PROVISIONAL TAKING OVER.

3.4.4

Fine tuning of process control and other instrumentation of the EQUIPMENT.

3.4.5

Any other supervisorINSTALLATION ADVISORY services required to be provided to the

PURCHASER in order to accomplish ERECTION and COMMISSIONING of the EQUIPMENT
within the BATTERY LIMIT.

3.4.6

The SUPERVISORSINSTALLATION ADVISOR (S) of the SUPPLIER shall have sufficient

command of the English language and shall give proper and correct advice, assistance and
instructions in the English language.

3.4.7

The INSTALLATION ADVISOR (S) appointed by the SUPPLIER shall bring along with them any
special tools which are required for the performance of their duties.

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3.4.8 .
3.4.9
3.4.10
3.5.7 The Supervisors of the SUPPLIER shall bring along with them any special tools
which are required for the performance of their dutiesThe SUPPLIER shall ensure that the INSTALLATION
ADVISOR (S) also bring along with them any special tools required for the performance of their services or duties
as defined in this CONTRACT and its APPENDICES.
.
3.5

During the whole period of SUPERVISION of the EQUIPMENT by the INSTALLATION ADVISOR,
such SUPERVISION shall be under the charge of the SUPPLIERINSTALLATION ADVISOR and the
PURCHASER shall not act in any manner contrary to the instructions, guidance and advice issued
by the SUPERVISORS ofINSTALLATION ADVISOR (S) appointed by the SUPPLIER.

3.6

In the event, the advice and instructions of the SUPERVISORSINSTALLATION ADVISOR (S)
ofappointed by the SUPPLIERS are not followed or complied with, at the earliest opportunity as
soon as the defect is located by the said SUPERVISORSINSTALLATION ADVISOR (S), then the
SUPERVISORSINSTALLATION ADVISOR (S) of the SUPPLIER shall make a report in writing to the
PURCHASER and the PURCHASER shall as soon as possible rectify the defect.

3.7

Additionally the SUPPLIER shall ensure that:

3.7.1

SUPPLIER shall not, except with the prior approval of PURCHASER, deliver any EQUIPMENTS
manufactured by any Sub-Supplier outside [___________] other than those stated in the SUBSUPPLIERS list to be provided by the SUPPLIER to the PURCHASER. However, the parties
shall further agree on those suppliers in [___________] and abroad, which cannot be changed
without PURCHASER's prior approval.

3.8

Any EQUIPMENT or materials required to construct the EQUIPMENT within PURCHASERs

BATTERY LIMITS so as to fulfil the Performance values as specified Annex 11 and which are not
specified in advance by the SUPPLIER to the PURCHASER shall be provided by the SUPPLIER,
free of any costs, to the PURCHASER, and at SUPPLIERs own expense, DDP Karachi seaport. In
case of delivery of such additional equipment or material not specified in PURCHASER will render
all required assistance for customs clearance.

3.9

That the EQUIPMENT is designed to meet all physical conditions at the SITE, including, but not
limited to the kind of climate and utilities etc. available thereon. In this connection the SUPPLIER
shall send a questionnaire requesting for the required information in respect of the above to the
PURCHASER and the PURCHASER shall provide such required information to the SUPPLIER to
the extent that such information can be reasonably obtained in Pakistan.

3.10

The SUPPLIER shall also bring along with them any special tools required for the performance of
their services or duties as defined in this CONTRACT and its APPENDICES.
The SUPPLIER shall bring along with them any special tools which are required for the performance
of their duties.

3.11
4

DELIVERY

4.1

DELIVERY term shall be according to Incoterms 2000 and as qualified in the SPECIAL
CONDITIONS

4.2

The Purchaser shall inform Supplier in writing two weeks after the signing of Contract of its
requirements as regards the format and contents of the packing lists and shipping invoices and on
any important matters to be taken into consideration in this respect. Supplier shall prepare the
packing lists and shipping invoices accordingly and shall send to the PURCHASER by courier
service or telefax the packing lists and shipping invoices prepared by Supplier for shipment actually
dispatched as soon as practical, but in any event prior to submission of these documents to the
bank.

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4.3

EQUIPMENT shall be packed to our standard packing specification as per export standard sea
worthy packing which is fit for the purpose offor transport of such like equipment. An international
inspection company, acceptable to the Supplier will supervise the packaging procedure. A report
regarding the quality of the packaging procedure and completeness of the Equipment will be
forwarded to the Purchaser. All costs arising from these services will be borne by the Supplier.

4.4

SUPPLIER shall provide the following documentation commercial invoice, packing list, European
Certificate of Origin (if required) Bill of Lading and any other documents required by the
PURCHASER for the importation of the EQUIPMENT.

4.5

Any EQUIPMENT or material which is required within the BATTERY LIMITS to fulfil the Performance
Values as mentioned in Article 14_and APPENDIX 11 of this CONTRACT will be delivered CFR
Karachi Pakistan within the CONTRACT PRICE according to INCOTERMS 2000. If the SUPPLIER
is responsible for any shortages or errors in Scope of Supply as specified in APPENDIX 9, the
SUPPLIER shall deliver the missing parts DPP SITE Pakistan.

4.6

Delivery of the Technical Specification will be effected by Courier Service CPT to the Head Office of
the PURCHASER.

4.7

All cases shall be opened at the SITE by the PURCHASER upon arrival of the EQUIPMENT at the
SITE. PURCHASER will look for visible outside damage which may have occurred to the cases (or
other packing, or to the EQUIPMENTS as may be visible from the outside) during transportation and
report any such damages detected by telefax or by e-mail to SUPPLIER. Such damage shall, if
SUPPLIER so requests, be certified henceforth by an authorized insurance agent to be nominated
by SUPPLIER, before the equipments concerned shall be kept intact as received until such
inspection has taken place or has been waived by SUPPLIER.

4.8

If SUPPLIER should not reply to any notification of damage within [twenty (20) days] after receipt of
PURCHASERs notification, and/or if SUPPLIER does not dispatch its insurance agent or own
personnel to inspect the damage within another [twenty (20)] days, PURCHASER may proceed to
carry out such checking of the damage to the EQUIPMENT as PURCHASER may deem appropriate
and shall issue a material receiving report incorporating the results of such checking to SUPPLIER
and the findings of PURCHASER stated in such material receiving report shall be accepted as
conclusive by SUPPLIER.

4.9

If at the opening of the cases any damage to the EQUIPMENT or any discrepancy between the
contents of the case and the description in the relevant documents, or any short shipment, are
found, or if any items in the case cannot be identified by PURCHASER, PURCHASER will call the
SUPPLIERs representatives available at the SITE to be a witness of such findings or to assist
PURCHASER to identify the items concerned; in such case the PURCHASER and the SUPPLIER
shall prepare and sign the material receiving report jointly.

4.10 Should completion of delivery of the EQUIPMENT as per this section be delayed beyond the delivery dates
specified in this CONTRACT due to causes not excused by the provisions of this CONTRACT, the PURCHASER
is entitled to liquidated damages of specified in Article 19 for each [full week] of delay. If the delivery of the
EQUIPMENT is delayed beyond [twelve (12) weeks] the PURCHASER shall have the right to terminate the
CONTRACT.
4.11

5
5.1

The payment of Liquidated Damages shall not absolve the SUPPLIER from its obligations to deliver
the delayed portion of the EQUIPMENT and/or Technical Specification.
OFFICIAL APPROVALS
The EQUIPMENT shall comply with applicable regulations and requirements of the authorities within
the country of construction of the EQUIPMENT, valid on the effective date of this CONTRACT.
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The SUPPLIER shall provide the applicable documentation related to the EQUIPMENT in
accordance with Document Submittal Schedule, The PURCHASER is responsible for obtaining all
necessary approvals, permits, licences within the country of construction of the EQUIPMENT .
REPRESENTATIVES
For the EQUIPMENT supply phase of the project the SUPPLIER and PURCHASER shall name
Project Managers for the project co-ordination.

INFORMATION, DRAWINGS AND DATA

7.1

The PURCHASER is responsible for providing required information for the SUPPLIER to fulfil his
obligations according to Document Submittal Schedule, as specified in the same document.

7.2

The SUPPLIER will send technical specifications of the main equipmentEQUIPMENT in accordance
with Drawing Submittal Schedule, . Any comments the PURCHASER might have to these drawings
shall be remitted within fourteen (14) days after receipt, otherwise they are be deemed to be
approved.

7.3

The PURCHASER is entitled to physically review relevant progress of the manufacture of the
DELIVERABLE(S)EQUIPMENT. For this purpose the PURCHASER having provided reasonable
notice to the SUPPLIER shall have access to the said workshop during normal business hours, but
without interfering with the progress of the EQUIPMENT manufacture.

7.4

The SUPPLIER shall give the PURCHASER notice in writing at least two (2) weeks before any
factory test of the DELIVERABLE(S)EQUIPMENT that are subject to factory test and which must
be at least one (1) month before the dispatch ex works.

7.5

The SUPPLIER shall be responsible for any discrepancies, errors and omissions in his drawings
and information, whether the PURCHASER has approved them or not.

7.6

The PURCHASER shall be responsible for the drawings and information supplied in writing by the
PURCHASER, and shall pay any additional cost incurred by the SUPPLIER due to alterations of the
EQUIPMENT, which result from incorrect or incomplete drawings and information.

7.7

The PARTIES to the CONTRACT shall use SI-units in documentation and correspondence.

VARIATIONS TO EQUIPMENT SUPPLY

8.1

The SUPPLIER may undertake minor variations in the form of technical modifications of the
EQUIPMENT and shall inform the PURCHASER thereof, provided these modifications do not result
in additional costs to the PURCHASER or in a delay of the EQUIPMENT supply or affect the
intended performance of the EQUIPMENT. For major variations the PURCHASERS approval shall
be obtained.

8.2

The PURCHASER may place CHANGE ORDER (S) at any time, provided such changes are
technically feasible and acceptable to the SUPPLIER. No CHANGE ORDER shall, together with any
change/modification already ordered, involve a net addition to or reduction from the CONTRACT
PRICE of more than 15% unless the SUPPLIER and PURCHASER agree in writing.

8.2.1

A CHANGE ORDER shall define in writing explicitly the changes required.

8.2.2

Within three (3) weeks after receipt of such CHANGE ORDER the SUPPLIER shall offer in
writing an AMENDMENT to this CONTRACT, defining the necessary changes to the
EQUIPMENT, the PROJECT TIME SCHEDULE (APPENDIX 1) and any other terms of this
CONTRACT and the additional price for such changes, if any.
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8.2.3

Within further two (2) weeks the PARTIES shall agree in writing upon an AMENDMENT
incorporating the changes.

8.2.4

Until an AMENDMENT is agreed upon, the SUPPLIER shall proceed with the EQUIPMENT
supply as if no changes were implied.

8.3

When it is necessary to change the EQUIPMENT due to a change in the APPLICABLE RULES
becoming effective or taking place after the formal signing of the CONTRACT the PURCHASER is
required to raise a CHANGE ORDER in accordance with article 8.2 above.
PROJECT TIME SCHEDULE

9.1

The EQUIPMENT shall be delivered in accordance with the PROJECT TIME SCHEDULE
(APPENDIX 1).

9.2

If, by reason of any CHANGE ORDER pursuant to Article 8, or of any act or omission on the part of
the PURCHASER or of any industrial dispute or by reason beyond the reasonable control of the
SUPPLIER arising after the signing of the CONTRACT, the SUPPLIER shall be delayed in the
completion of the EQUIPMENT supply , where such delay occurs then provided that the SUPPLIER
shall as soon as reasonably practicable have given to the PURCHASER notice of his claim for an
extension of time with full supporting details, the PURCHASER shall on receipt of such notice grant
the SUPPLIER from time to time in writing either prospectively or retrospectively such extension of
time as may be reasonable.

10

TRANSFER OF TITLE AND RISK

10.1

RISK of loss and damage to the EQUIPMENT shall be transferred to the PURCHASER according to
the DELIVERY term when the EQUIPMENT is delivered at SITE.

10.2

Title to the EQUIPMENT shall be transferred to the PURCHASER at the time of DELIVERY at SITE.

10.3

In case of any damage to the EQUIPMENT or any part thereof the SUPPLIER shall up to final
ACCEPTANCE arrange for the repair of the EQUIPMENT or part concerned, or deliver replacement
for such EQUIPMENT or part thereof DDP SITE at its own cost and expense as specified in the
CONTRACT. In case of any shortage or discrepancy the SUPPLIER shall clarify the same. In case
of any short shipment or wrong shipment of the EQUIPMENT or any part thereof SUPPLIER shall
deliver such short shipped or wrongly shipped EQUIPMENT or part thereof up to acceptance DDP
SITE at its own cost and expense as specified in the CONTRACT. However, SUPPLIER may include
any such short shipped or wrongly shipped EQUIPMENT or part thereof in the next scheduled
shipment (DDU) Karachi if this does not have any adverse effect on the ERECTION schedules.

10.4

PURCHASER will accept the repair of the Equipment only under the following conditions:
a)
The repair does not effect the overall life time of the EQUIPMENT.
b)
The repair does not reduce the efficiency of the EQUIPMENT.

10.5

In case of any loss of EQUIPMENT or part thereof in the absence of which any
SUPERVISORINSTALLATION ADVISOR(S) present at the SITE cannot perform, or continue to
perform, his services, the SUPERVISORINSTALLATION ADVISOR(S) shall immediately be sent
back to [____________] (or to his other usual place of residence) until such time when their services
are required after the replacement of the lost EQUIPMENT or part thereof, provided that the decision
to send the SUPERVISORINSTALLATION ADVISOR(S) back shall be made by mutual consultation
between SUPPLIER and PURCHASER and only if the replacement cannot be made readily
available within such short time that sending back the SUPERVISORINSTALLATION ADVISOR(S)
would not be justified economically.

10.6

The SUPPLIER shall continue to perform its obligations under the CONTRACT during the time
required for replacement of the lost relevant EQUIPMENT or part thereof.

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By way of clarification it is agreed that the transfer of risk and ownership of the EQUIPMENT shall
not in any manner, absolve the SUPPLIER of its other obligations and liabilities under the
CONTRACT.
WARRANTY

11.1

The SUPPLIER warrants that the EQUIPMENT is new, un-tampered and in compliance with the
specifications of the CONTRACT and is free from any defects in design, materials or workmanship
and is of satisfactory quality and fit for the purpose . and is capable to Performance Values indicated
in Appendix 11.

11.2

The SUPPLIER warrants the EQUIPMENT for the WARRANTY PERIOD, a period of thirty six
eighteen (1836) months commencing from the date the DELIVERABLE(S) is/are declared ready for
dispatch from SUPPLIERS factory, or eighteen twelve (128) months from the date of
PROVISIONAL TAKE OVER whichever is the earlier.

11.3

Under the warranty the SUPPLIER will at his sole discretion, shall repair or, if necessary, replace, at
no charge, those parts that, during the WARRANTY PERIOD, fail owing either to defective design,
materials or workmanship. Exceptions are failures due to normal wear and tear, overload, misuse,
repairs or maintenance by others than the SUPPLIER without its written consent, or mal-operation in
contradiction with the SUPPLIER'S operation manuals.

11.4

The SUPPLIER shall rectify defects for which the SUPPLIER is responsible according to this
Article, within the shortest timeone month that is reasonably practical or, such other time to be
agreed in advance between the SUPPLIER and the PURCHASER. The costs for the rectifying the
defects shall be born by the SUPPLIER. If the SUPPLIER neglects to rectify such defects within the
agreed time, the PURCHASER is entitled to execute the work necessary to rectify the defect at cost
and risk to the SUPPLIER, fourteen (14) days after written notice is given to that effect. SUPPLIER
shall not be liable for any direct or indirect loss or damage or any claim whatsoever arising out of
any defect After such rectification the EQUIPMENT shall be capable to achieve the Performance
Values listed in Appendix 11

11.5

If, during the WARRANTY PERIOD, any part of the EQUIPMENT, is replaced or repaired, the
guarantee period as above for that part is extended by six (6) months. The SUPPLIER'S
responsibility for any replaced or repaired part of the WORK will in any event cease to apply after
two (2) years from PROVISIONAL TAKE OVER.

11.6

The PURCHASER shall inform the SUPPLIER without delays of any defects found in the
EQUIPMENT.

11.7

During the warranty period, the SUPPLIER shall have the rights of access to the EQUIPMENT,
provided that he has informed the PURCHASER duly in advance.

11.8

The PURCHASER accepts that the express benefits of warranties granted to the PURCHASER
under this Clause 11 together with the express remedies provided to the PURCHASER in respect
of the EQUIPMENT provided under this Contract, represent the entire responsibility and liability of
the SUPPLIER in respect of all warranties express or implied whether statutory or otherwise and any
other obligations and liabilities whatsoever of SUPPLIER in respect of the EQUIPMENT provided
under this Contract.

11.9

The PURCHASER accepts that the express benefits of warranties granted to the PURCHASER
under this Clause 11 together with the express remedies provided to the PURCHASER in respect
of the EQUIPMENT provided under this Contract, represent the entire responsibility and liability of
the SUPPLIER in respect of all warranties express or implied whether statutory or otherwise and any
other obligations and liabilities whatsoever of SUPPLIER in respect of the EQUIPMENT provided
under this Contract.

11.10

The EQUIPMENT will be of SUPPLIER's latest design, brand new (except for running-in tests) and
fit for the purpose and will, in general, be manufactured in [---------------], or by the
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manufacturers/SUB-SUPPLIERS outside [--------------] stated in the list provided by the SUPPLIER to

the PURCHASER.

11.11

The SUPPLIER further warrants that:

11.9.1

The SUPERVISION will be provided by the INSTALLATION ADVISOR (S) appointed by the
SUPPLIER with all due skill, experience, knowledge and expertise and in accordance with
sound practices and procedures;

11.11.1 To the extent that breach of the warranty as per sub-clause 11.9.1 above has led to damage to
the EQUIPMENT, SUPPLIER shall be liable to rectify the damage and/or replace the damaged
portion, DDP SITE.
11.12

LUBE OIL CONSUMPTION

11.13

If the Lube oil consumption of the EQUIPMENT is not attainable as guaranteed in APPENDIX 11,
measured during the test run at SITE and calculated on the mechanical continuous rated output of
the EQUIPMENT and this is due to reasons solely attributable to the SUPPLIER and SUPPLIER has
failed to repair the EQUIPMENT at his own cost to achieve the guaranteed figures within [ 90 days],
the SUPPLIER shall be liable to pay Liquidated Damages for each [0.1 g/kWh] of average excess
lube oil consumption, a sum equivalent to cost of lubricating oil for one (1) full year per [0.1 g/kWh].
The total liability of SUPPLIER in this account shall not exceed [1%] of the CONTRACT PRICE.

Conditions of measurement for average lube oil.

Start of measurement > 1000 operating hours after COMMISSIONING

Measurement must be carried out over a period of min. 500oh (min. 12 hours after each start) at a
constant performance and of the EQUIPMENT between 75%-100%.

For the above the SUPPLIER shall have three attempts to set right any deficiency.

Costs arising out of the Lube Oil measurement will be not covered by the SUPPLIER,.

If the SUPPLIER requires its personnel during the test run then SUPPLIER may do so at its own
costs and expenses.

12

INSTALLATION, COMMISSIONING, TEST AND PROVISIONAL TAKE OVER

12.1

SUPPLIER shall provide a suitably qualified installation advisor.

12.2

SUPPLIER shall provide suitably qualified commissioning engineer(s).

12.3

Commissioning, Start Up, Test Run, PERFORMANCE AND RELIABILITY TESTS and
PROVISIONAL TAKE OVER of the supplied EQUIPMENT shall be executed in accordance with the
Commissioning Procedure and Article 21 below.

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12.4

Until PROVISIONAL TAKE OVER, The PURCHASER shall only operate the EQUIPMENT with
written approval from the SUPPLIER. Any operation without the consent of the SUPPLIER, shall be
considered as acceptance of PROVISIONAL TAKE OVER by the PURCHASER.

12.5

The COMMISSIONING of the EQUIPMENT is limited to [24 working] days ([eight hours] per day). In
case of delay for reasons not attributable to SUPPLIER but attributable to PURCHASER, the costs
of additional working days are to be borne by the PURCHASER. In the case of delay caused by
reasons attributable to SUPPLIER and not attributable to PURCHASER the cost of the additional
working days shall be borned by the SUPPLIER. In the case of delay caused by reasons attributable
to neither SUPPLIER nor PURCHASER an amicable solution shall be found.. the PURCHASER
shall inform the SUPPLIER in writing about the date of readines s of START UP and
COMMISSIONING by giving [thirty (30)] days notice in advance.. [Five (5)] days before START UP
and COMMISSIONING the SUPERVISORINSTALLATION ADVISOR shall send to the SUPPLIER
and the PURCHASER the completed installation check list, confirming that the mounting and
installation has been finalized according to SUPPLIERS Technical Specifications and project related
documentation and that all Site facilities necessary for EQUIPMENT operation are ready for
continuous and uninterrupted operation.

12.6 If and when tested the EQUIPMENT fails on COMMISSIONING, START-UP, tests run or fails to achieve the
MACHENICAL COMPLETION the SUPPLIER shall be afforded a period of one month or such
other period as otherwise agreed between the PARTIES, during which the SUPPLIER at its own
costs and expenses can repair, correct and/or adjust the EQUIPMENT, at its own cost and
expense, so the EQUIPMENT achieve the COMMISSIONING, START-UP, tests run or achieve the
MACHENICAL COMPLETION. During such period the SUPPLIER shall be liable to pay the
PURCHASER liquidated damages of @ 0.50 % of the CONTRACT PRICE for each full week
which on aggregate shall not exceed in any event 5% of the CONTRACT PRICE during which the
SUPPLIER carried out the repairs. If the SUPPLIER fails to rectify such defects within such time
period, the PURCHASER may grant an extension of time to SUPPLIER to rectify such defects and
charge liquidated damages at the rate mentioned herein above or the PURCHASER may
terminate the CONTRACT and shall be entitled to compensation as mentioned in Article 23.
13
13.1

14

FINAL ACCEPTANCE
The PURCHASER shall without delay give his FINAL ACCEPTANCE of the EQUIPMENT after the
expiration of the WARRANTY PERIOD, after which all obligations of the PARTIES under this
CONTRACT will come to an end.

PERFORMANCE
14.1

SUPPLIER guarantees that if tested in accordance with APPENDIX 5 the EQUIPMENT shall
achieve the Performance values set-forth in APPENDIX 11 of this CONTRACT.

14.2

If and when tested the EQUIPMENT fails to achieve the performance values as per APPENDIX 11
the SUPPLIER shall be afforded a period of one month or such other period as otherwise agreed
between the PARTIES, during which the SUPPLIER can repair, correct and/or adjust the
Equipment, at its own cost and expense, so the EQUIPMENT achieves the Performance Values
as per APPENDIX 11. If on retesting the EQUIPMENT again fails to meeting the Performance
Values as per Appendix 11 but achieves the MINIMUM PERFORMANCE values as specified in
Appendix 11, the SUPPLIER shall be liable to pay liquidated damages as per Article 19. if the
EQUIPMENT achieves the MINIMUM PERFORMANCE then the PURCHASER against the
liquidated damages as mentioned in Article 19 will PROVISIONALLY TAKE OVER the
EQUIPMENT.

14.3
MINIMUM PERFORMANCE shall be achieved, if the Performance Values set-forth in Appendix 11.
If the SUPPLIER fails to achieve the MINIMUM PERFORMANCE, the Supplier shall have failed to
perform and PURCHASER in which case, shall be entitled to terminate the CONTRACT and the
SUPPLIER shall be required to pay back the CONTRACT PRICE and an additional 30% of the
CONTRACT PRICE. The Supplier shall dismantle and remove the Equipment from the Site at its own
cost and expense.
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CONTRACT PRICE

15.1

The PURCHASER agrees to buy from the SUPPLIER and the SUPPLIER agrees to supply, sell and
render the PURCHASER the EQUIPMENT (s), SPARE PART(s), SUPERVISION and other services
to be rendered/ procured by the SUPPLIER as per the Scope of Supply and Technical
Specifications.shall without any dispute pay to the SUPPLIER for the EQUIPMENT specified in this
CONTRACT, the CONTRACT PRICE as set out in the CONTRACT PRICE AND TERMS OF
PAYMENT SCHEDULE (APPENDIX 3) but subject to variations to the CONTRACT PRICE in
accordance with the provisions of the CONTRACT.

15.2

The CONTRACT PRICE excludes any duties, taxes or levies except those withholding taxes which
the PURCHASER is bound by law of Pakistan to deduct.

15.3

The CONTRACT PRICE for the agreed scope of supply is fixed CFR Karachi Pakistan, according to
INCOTERMS 2000.

16

TERMS OF PAYMENT

16.1

The SUPPLIER shall be paid in accordance terms set out in the CONTRACT PRICE AND TERMS
OF PAYMENT SCHEDULE (APPENDIX 3)

16.2

The CONTRACT PRICE shall be paid to SUPPLIER at the time and in the manner set forth below:

16.2.1 100% payable at sight under the irrevocable and confirmed Letter of Credit (L/C) agaist
presentation of clean bill of lading, commercial invoice, packing list, 4510% BANK GUARANTEE
and certificate of origin issued by first class _________ Bank.
16.2.2 All payment shall be made in ______ only without any deduction, upon presentation of the
specified documents against a confirmed, irrevocable L/C issued by the Pakistani Bank confirmed
by __________ Bank.
16.2.3 L/C shall be established by the PURCHASER and shgall become operative latest within [15] days
from the Effective date of this CONTRACT.
16.2.4 All L/C charges outside the country of SUPPLIER shall be on PURCHASER account except for
confoirmation charges, which are on SUPPLIER account.
17

CUSTOMS, IMPORT DUTIES, TAXES AND OTHER CHARGES

17.1

The PURCHASER shall pay all applicable customs, import duties taxes and other charges due on
the EQUIPMENT, and any replacement parts sent under warranty, payable upon its importation into
Pakistan

17.2

The SUPPLIER shall bear all taxes, assessments, duties, levies or charges in the country (s) of
manufacture of the EQUIPMENT

17.3

All amounts stated to be payable by PURCHASER pursuant to this CONTRACT exclude any value
added tax (VAT), sales tax, service tax, taxes on turnover or similar taxes. If the supply of
EQUIPMENT is chargeable to any value added tax, sales tax, service tax, taxes on turnover or
similar taxes, in Pakistan such taxes will be paid and borne by the PURCHASER.

17.4

PURCHASER shall pay and bear all other taxes, assessments, duties, levies or charges by
whomsoever levied in Pakistan subject to Article 17.5 and 17.6, below.

17.5

Both Parties agree to co-operate to eliminate or reduce any applicable taxes, duties, interests,
penalties or similar charges which may be payable by either Party, including, where applicable,
providing or issuing the necessary documentation to support or secure exemptions or recoveries.
Furthermore, if as a result of a change in law or a change in the tax practice of any tax authority,
either Party becomes subject to additional taxes, duties or similar charges which increases their
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financial liability during the term of this CONTRACT, both Parties will negotiate in good faith to
attempt to reduce or eliminate such additional taxes, duties and similar charges. This is provided
that neither Party need take any steps, which in its reasonable opinion and acting in good faith
would increase its obligations or would be prejudicial or adverse to it (whether in respect of tax
affairs or otherwise).
17.6

17.7
17.8

17.9

Both Parties agree to co-operate to eliminate or reduce any applicable taxes, duties, interests,
penalties or similar charges which may be payable by either Party, including, where applicable,
providing or issuing the necessary documentation to support or secure exemptions or recoveries.
Furthermore, if as a result of a change in law or a change in the tax practice of any tax authority,
either Party becomes subject to additional taxes, duties or similar charges which increases their
financial liability during the term of this CONTRACT, both Parties will negotiate in good faith to
attempt to reduce or eliminate such additional taxes, duties and similar charges. This is provided
that neither Party need take any steps, which in its reasonable opinion and acting in good faith
would increase its obligations or would be prejudicial or adverse to it (whether in respect of tax
affairs or otherwise).
If SUPPLIER shall effectively obtain a credit against any British taxes payable on the basis of taxes
paid by PURCHASER on behalf of SUPPLIER in Pakistan, which are evidenced by tax receipts, in
the English language, handed over to SUPPLIER, then SUPPLIER shall pass on to PURCHASER
the net benefit of such tax credit and reimburse to PURCHASER the corresponding amount of such
tax credit.
The all or any income tax due towards the SUPPLIER in relation to this CONTRACT whether in
Pakistan or outside Pakistan shall be sole responsibility of the SUPPLIER.

18
18.1

BANK GUARANTEE
The SUPPLIER shall arrange a bank guarantee, in favour of the PURCHASER as follows:
A performance bank guarantee equal to 4510% ( forty fiveten percent) of the CONTRACT PRICE
to be issued to the PURCHASER within 30 days of signing the contract, the wording as per
Performance Bank Guarantee (Appendix 4).The performance bank guarantee shall be valid to
the end of the WARRANTY period.

19

LIQUIDATED DAMAGES LIABILITY

19.1

In no event shall the sum of Liquidated Damages Liability detailed under this Article 198 exceed
157,5% (seven point five fifteen per cent) of the CONTRACT PRICE.

19.2

This CONTRACT establishes the following Liquidated Damage Liability:

19.2.1 Late DELIVERY of the DELIVERABLE(S)EQUIPMENT 0.25% of value of Equipment to be

shipped for each complete week of delay. Maximum damages payable will be 5% of the
CONTRACT PRICE.
19.2.2

Electrical power 0,5% of CONTRACT PRICE for each full percentage lack of electrical power
(values achieved during Performance Tests prior to PROVISIONAL TAKE OVER). Maximum
damages payable will be 5% of the CONTRACT PRICE.

19.2.3

Fuel consumption 0,5% of CONTRACT PRICE for each full 1% increase in fuel consumption
(values achieved during Performance Tests prior to PROVISIONAL TAKE OVER) Maximum
damages payable will be 5% the of CONTRACT PRICE.

19.2.4 MINIMUM PERFORMANCE if EQUIPMENT achieve the MINIMUM PERFORMANCE the

SUPPLIER shall pay ___% of the CONTRACT PRICE as liquidated damages for each 1% of full
electric power below the Performance Values as specified in the APPENDIX 11.

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19.2.5

19.3

If any repair or modification to be carried under this CONTRACT to achieve the Performance
Values or for any other purposes which cause delay in complying with the PROJECT TIME
SCHEDULE the SUPPLIER shall pay liquidated damages of ___% of the CONTRACT PRICE.
Maximum damages payable will be 5% the of CONTRACT PRICE.
Liquidated damages for delay and/or lack of performance shall constitute the SUPPLIERS exclusive
obligation and the PURCHASERS sole remedy for any and all delays and/or lack of performance of
the SUPPLIER in the performance of its contractual obligations hereunder.

19.4

The payment of liquidated damages, shall be due within four (4) weeks after receipt of a written
statement from the PURCHASER claiming his undisputed rights to receive liquidated damages
under the CONTRACT.

19.5

The PURCHASERS right to liquidated damages shall be forfeited if such request has not been
submitted within six (6) months after PROVISIONAL TAKE OVER.

20

LIABILITY

20.1

Any liability of the SUPPLIER with respect to death, or injury or damages of any kind to any person,
is subject to and governed by the provisions of the law applicable in the country of the location of the
EQUIPMENT where such death or injury or damage occurs.

20.2

The SUPPLIER shall, subject to Article 1920.3, be liable to the PURCHASER for any physical loss
of or damage to the EQUIPMENT or property of the PURCHASER caused directly or indirectly by
the fault of the SUPPLIER during the performance of the SUPPLIERS obligations under the
CONTRACT.

20.3

Except for the SUPPLIERS liability as per Article 1920.1 above, the liability of the SUPPLIER as
stated 1920.2 shall not, in any circumstances, exceed 35% of the CONTRACT value. If the
SUPPLIER incurs liability exceeding the said amount, the PURCHASER shall indemnify, defend and
hold the SUPPLIER harmless.

20.4

The limit as specified at Article 20.3 above shall not include SUPPLIERs liability
a)

under section 3 (Scope of Supply and Technical Specification)

b)

under ArticleSection 11 & Article section 14 (Warranties and Performance)

d)

under Article 8.3 (repair or replacement under the Mechanical Guarantee for
the EQUIPMENT ), and

e)
f)

in case of willful acts and willful negligence.

in case of failure to achieve the Minimum Performance as per section 14.3.

20.5

Neither PARTY shall, in any event or under any circumstances, be liable to the other PARTY for any
loss of use or production, unavailability of the EQUIPMENT, loss of profit, cost of capital, loss of
interest or revenues, cost of purchased or replacement power or for any direct, indirect or
consequential damages or losses whatsoever.

20.6

Any liability of the SUPPLIER shall cease at the end of the respective WARRANTY PERIOD,
applicable for the part of WORKS due to which the damage was caused.

20.7

The limitations and exclusions stated under this Article shall apply for any liability of the SUPPLIER
under the CONTRACT, in tort, under any theory of strict liability or otherwise. The limitations and
exclusions stated under this Article do, however, not apply to damages or loss caused by wilful act
on the part of the SUPPLIER. Nor do the limitations and exclusions stated under this Article apply
to damages or loss caused by wilful act on the part of the PURCHASER.

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PERFORMANCE TESTS AND RELIABILITY TESTS

21.1
21.1 Precondition:
During all test runs SUPPLIERs engines will run parallel with existing generators of the
PURCHASER.
Test run in speed mode: with all engines, PURCHASER provides load sharing signal according to
interface list and electrical overview from SUPPLIER. In case of a mechanical governor on the
PURCHASERS engines, test run with droop cooperation (lower frequency on full load).
Test run in power mode: with all engines of SUPPLIERs (All SUPPLIERS engines are set to a
fixed value of 90-100% of nominal power) and fluctuation will be covered with existing engines of
PURCHASER.

In case less electrical load or natural gas is available, the PERFORMANCE TEST(S)
should be accomplished on a unit by unit basis. Time for testing must be notified by
SUPPLIER to PURCHASER at least two (2) weeks in advance.
Note: Only possible if PURCHASERs engines are able to run with load sharing line,
power mode.
(According to the precondition in the TECHNICAL SPECIFICATIONS)
21.2 Performance Test Run
Testing of the EQUIPMENT shall include a SUPPLIERs guided [72] hours non-stop test
run (excluding oil consumption), operated by PURCHASERs personnel in order to show
performance mentioned in item ________ of this CONTRACT. COMMISSIONING
engineer of the SUPPLIER is only obliged to stay [8 hours] per day at SITE, which is up
to him when he will be available. If the engine fails to perform at the test run,
COMMISSIONING engineer has [6] hours time to solve the problem, without that the test
period counts from zero again. If COMMISSIONING engineer needs more than [6] hours,
then the test run will be started again. If engine is not able to fulfil the test run due to any
other reason, which is not caused by the SUPPLIER, COMMISSIONING engineer is not
obliged to wait until the test run can be carried out. If test run should be carried out at
later stage, PURCHASER bears cost for travel to the SITE and the accommodation costs
in advance unless postponement is caused due SUPPLIERs fault. After successful test
run the SUPPLIER and PURCHASER will sign the Form of Equipment Acceptance
Report.
21.3 Reliability Test Run:
This Reliability Test Run will last [15 days] and will take place immediately after the [72]
hours Performance Test Run. This Reliability Test Run will be supervised by the
SUPPLIER. During the last (3) three days of this Reliability Test Run Genset data can
be collected.
22

SUSPENSION

22.1

22.1 The PURCHASER may for its convenience or for any other reason whatsoever suspend the
carrying out of the manufacture of the EQUIPMENT by the SUPPLIER in whole or in part, at any
time, by giving written notice thereof to the SUPPLIER specifying the nature, effective date and
anticipated duration of such suspension and the SUPPLIER shall without undue delay give full effect
to and comply with such notice of suspension.

22.2

22.2The SUPPLIER shall be entitled to suspend the carrying out of the manufacture of the
EQUIPMENT in whole or in part by giving written notice thereof to the PURCHASER in the event
any payments to the SUPPLIER are not effected within 30 days of the due date as per Article 15.
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Upon receipt of the amount(s) due from the PURCHASER, the SUPPLIER shall resume the carrying
out of the manufacture of the EQUIPMENT forthwith.
22.3

22.3 In the event of suspension as per Articles 20.1 and 20.2 above, the PURCHASER shall pay to
the SUPPLIER all additional costs and expenses demonstrably accruing to the SUPPLIER as
consequence of the cessation and resumption of the manufacture of the EQUIPMENT including
costs for proper protection and maintenance of the EQUIPMENT. The PURCHASER shall pay such
costs and expenses monthly against invoices provided by the SUPPLIER.

22.4

In the event of suspension as per Articles 20.1 and 20.2 above, the PURCHASER shall pay any part
of the CONTRACT PRICE, which but for such failure would have become due.

22.4 In the event of suspension as per Articles 20.1 and 20.2 above liquidated damages for late delivery
shall not be due and payable for the period of the suspension.
23

TERMINATION OF THE CONTRACT

23.1
In the event of termination for default by the SUPPLIER, and termination in pursuance of
Article 22 the SUPPLIER shall give a full refund of the CONTRACT PRICE to the PURCHASER and
the PURCHASER shall make available the EQUIPMENT for collection by SUPPLIER in accordance
with EXWORKS SITE (INCOTERMS 2000) against full refund of the CONTRACT PRICE. In the
event Purchaser returns only part of the EQUIPMENT, the refund shall be reduced accordingly.
PURCHASER shall have the option to continue using the EQUIPMENT for a period not extending
beyond nine months from termination. In addition to the payment of full refund of the CONTRACT
PRICE, the SUPPLIER shall reimburse to PURCHASER any amount by which the price for
equivalent EQUIPMENT purchased by PURCHASER elsewhere for the SITE exceeds the
CONTRACT PRICE as well as expenses incurred in installation of the new equipment and removal
of the EQUIPMENT, subject to an aggregate amount equivalent to thirty percent (30%) of the
CONTRACT PRICE. Any BANK GUARANTEEs shall be returned contemporaneously.

23.2

The PURCHASER shall at any time until DELIVERY be entitled to terminate the CONTRACT for its
convenience with immediate effect upon notice thereof to the SUPPLIER, whereupon the
SUPPLIER shall take all steps to cease all further work and performance under the CONTRACT, on
the date of termination specified by the PURCHASER in his notice and to terminate all
SUBSUPPLIERS, orders or contracts with Suppliers on the best terms possible.

23.3

Following such termination by the PURCHASER, the PURCHASER shall become liable to
pay to the SUPPLIER all incurred and committed costs.
plus a handling charge of 15%.

23.4

In the event of termination for default by the SUPPLIER, and termination in pursuance of Article 22
the SUPPLIER shall give a full refund of the CONTRACT PRICE to the PURCHASER and the
PURCHASER shall make available the EQUIPMENT for collection by SUPPLIER in accordance with
EXWORKS SITE (INCOTERMS 2000) against full refund of the CONTRACT PRICE. In the event
Purchaser returns only part of the EQUIPMENT, the refund shall be reduced accordingly.
PURCHASER shall have the option to continue using the EQUIPMENT for a period not extending
beyond nine months from termination. In addition to the payment of full refund of the CONTRACT
PRICE, the SUPPLIER shall reimburse to PURCHASER any amount by which the price for
equivalent EQUIPMENT purchased by PURCHASER elsewhere for the SITE exceeds the
CONTRACT PRICE as well as expenses incurred in installation of the new equipment and removal
of the EQUIPMENT, subject to an aggregate amount equivalent to thirty percent (30%) of the
CONTRACT PRICE. Any BANK GUARANTEEs shall be returned contemporaneously.
23.5
In the event of termination for default by the PURCHASER, SUPPLIER shall be entitled to
a final payment in an amount of the CONTRACT PRICE minus cost and expense saved as a result
of the termination plus cost and expense incurred as a result of the termination (such as
preservation and storage cost). Any bank guarantees shall be returned.
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23.6

In terms of any delay in payment by either party to the other as payable pursuant to this Article 22,
the payment curing or made as a remedy shall include interest on the overdue amount accruing at
8% p.a. from and after the day the payment became overdue until the day it is paid.

23.7

The PURCHASER shall have the right to terminate the CONTRACT for any material breach by the
SUPPLIER by giving sixty thirty (630) days prior written notice to the SUPPLIER of its intention to
terminate the CONTRACT in order to allow the PARTIES to reach a mutually beneficial solution
thereof, if one of the following conditions has occurred due to reasons other than Force Majeure:

23.7.1 The DELIVERY of the DELIVERABLES according to the PROJECT TIME SCHEDULE
(APPENDIX 1), is delayed due to reasons for which the SUPPLIER is liable to pay liquidated
damages, such that the maximum damages payable are reached.
23.7.2

If the SUPPLIER becomes bankrupt or insolvent, has a receiving order against him, compounds
with his creditors, or carries on business under a receiver, trustee or manager for the benefit of
his creditors, or goes into liquidation.

23.7.3 In case of termination for breach, in accordance with this Article 21.2 the PARTIES shall meet to
agree a mutually beneficial financial settlement
23.8

The SUPPLIER shall be entitled to terminate the CONTRACT by written notice of termination
delivered to the PURCHASER provided that the SUPPLIER has given the PURCHASER sixty (60)
days prior notice of its intention to terminate the CONTRACT in order to allow the PARTIES to reach
a mutually beneficial solution and that no solution is reached; if

23.8.1 The carrying out of the CONTRACT has been suspended by the SUPPLIER for more than three
(3) months and the payments have not been effected by the PURCHASER during the said period;
or
23.8.2 The PURCHASER has issued a suspension order and the EQUIPMENT suspended are not
reinstated within six (6) months after receipt by THE SUPPLIER of the suspension order; or
23.8.3 The PURCHASER becomes bankrupt or insolvent, has a receiving order against him,
compounds with his creditors, or carries on business under a receiver, trustee or manager for the
benefit of his creditors or goes into liquidation.
23.8.4

In the event of termination in accordance with this Article 21.3 the PURCHASER shall pay the
SUPPLIER incurred and committed costs plus a handling charge of 15%.

23.9

Each of the PARTIES shall be entitled to terminate the CONTRACT by submitting sixty (60) days
prior written notice to the other PARTY in the event that one or more events of FORCE MAJEURE in
accordance with Article 22 have occurred for a period of four six (46) months or more.

23.10

In the event of termination in the event of FORCE MAJEURE, the PURCHASER shall pay to the
SUPPLIER all costs and expenses incurred by the SUPPLIER for the part of the EQUIPMENT
manufacture performed until the date of termination together with all unavoidable costs and
expenses demonstrably paid or incurred by the SUPPLIER in giving effect to such termination
(including, but not limited to, costs of removal from the SITE of all temporary equipment and
material, reimbursement for termination of contracts with SUBSUPPLIERS, and losses due to
disposal of material and equipment).

24

FORCE MAJEURE

243.1

Any delay in or failure of performance of either party hereto shall not constitute default
hereunder, or give rise to any claim in damage, if and to the extent such delay in or
failure of performance is caused by an event of Force Majeure.

243.2

"Force Majeure" for the purpose of this Article 12 shall mean the actual happening and
not mere therat or apprehension of happening in Paksitan near relevant PLANTs SITE
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of any and all events or fortuitous circumstances which directly affect SELLER and/or
its subcontractors, or BUYER's and/or his contractors in their implementation of their
respective obligations under or in connection with the CONTRACT and completion of
the relevant PLANT as per the Project Time Schedules in respect of the PLANT as
attached at ANNEX 6__ and shipment schedule and which are beyond their respective
control, such as but not limited to, strike, lockout, labour disputes, fire, explosion,
nuclear catastrophes, transportation accidents, natural disaster, earthquake, riot,
rebellion, war, government seizures, laws, or other regulations of any authority.
243.3

The aggrieved party will notify the other party in writing of any event of Force Majeure within [fourteen (14)]
days of its occurrence (or if this cannot be done for reason of Force Majeure, as soon as possible
thereafter), and as soon as possible of the consequences of such an event. Thereupon, both parties will
discuss and agree in good faith how to overcome the consequences of the Force Majeure occurred.

24.4
23.4

If Force Majeure should continue for a period in excess of [six (6)] months, both parties shall consult and
agree whether to terminate the CONTRACT or how to adapt the CONTRACT taking into consideration the
effects of Force Majeure on the Project Time Schedule. If no agreement can be reached between the
parties, each party may give notice of termination of the CONTRACT to the other party. In such case, if the
parties cannot settle the remaining mutual claims and obligations as a consequence of the termination, the
matter shall be decided by Arbitration under the terms of Article 14.
24.1

Either PARTY shall be entitled to suspend performance of his obligations under the CONTRACT to
the extent that such performance is impeded or made unreasonable by any circumstances (each of
which being defined as a FORCE MAJEURE) beyond the control of the parties such as, but not
limited to:
24.2
industrial disputes
24.3
fire, flood, storms and other natural disturbances
24.4
unavoidable accidents
24.5
un-seasonal weather
24.6
war (whether declared or not)
24.7
civil war
24.8
sabotage
24.9
extensive military mobilisation
24.10 insurrection, riots and other civil disturbances
24.11 requisition and/or seizure
24.12 embargo and/or blockade
24.13 breakages of or accident to machinery and equipment
24.14 inability to obtain permits, licences, orders, certificates or other authorisations
24.15 order of any court, commission, board or other authority having jurisdiction
24.16 restrictions in the use of power
24.17 ethical or moral circumstances in the PURCHASERS country to which the SUPPLIER is
fundamentally opposed
24.18 Sanctions imposed by the United Nations, the European Union or countries thereof, or any
other country which imposes sanctions and the SUPPLIER deems it necessary to comply with
24.19 defects or delays in deliveries by sub-suppliers caused by any such circumstances referred to
in this Article.
24.20 any other cause beyond the reasonable control of the PARTY invoking Force Majeure
24.21

If either PARTY is prevented or hindered by Force Majeure from performing any of its obligations
hereunder, the obligations of such PARTY, insofar as the obligations are affected by Force Majeure,
shall be suspended while (but only so long as) Force Majeure continues to prevent or hinder, the
performance of such obligations and only to the extent of the said prevention or hindrance. The
PARTY claiming to be affected by Force Majeure shall notify the other PARTY in writing without
delay on the intervention and on the cessation of such circumstance.

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24.22

If Force Majeure results in the suspension of all or part of the WORK , the PARTIES shall if
appropriate meet , as soon as practicable given the nature of the Force Majeure, and determine the
appropriate measures to be taken.

24.23

A circumstance referred to in the Article above, which had occurred prior to the formation of the
CONTRACT, shall give a right to suspension only if its effect on the performance of the CONTRACT
could not be foreseen at the time of the formation of the CONTRACT.

24.24

If Force Majeure prevents the PURCHASER from fulfilling his obligations, he shall compensate the
SUPPLIER for expenses incurred in securing and protecting the EQUIPMENT.

24.25

Termination in respect of Force Majeure shall be as stated in Article 21 Termination of the Contract,
particularly 21.4 and 21.5

24.26

Any delays or failure in performance by either PARTY shall not give rise to any claims for damages
or consequential loss if, and to the extent, such delay or failure is caused by Force Majeure.

25

ARBITRATION

25.1

All disputes arising between the PARTIES from or in connection with this Contract shall be settled
through consultation and negotiation between the PARTIES. If no agreement can be reached
through consultation and negotiation the following shall apply.

25.2

In the event of any dispute not being settled by consultation and negotiation, the matter shall be
settled under the Rules of Arbitration of the International Chamber of Commerce by one or more
arbitrators as agreed by the PARTIES and appointed in accordance with the said Rules of
Arbitration. The place of arbitration shall be London, England.

25.3

The arbitration proceedings shall be in the English language and will take place in London England.

25.4

The cost of the Arbitration shall be borne by the Parties hereto as determined in the award.

25.5

Any arbitration award made in such arbitration proceedings shall be final and binding on the
PARTIES hereto and shall be enforceable and valid in any court having jurisdiction thereof.

25.6
25.7
26
26.1

27
27.1

28

During the course of arbitration the PARTIES hereto shall continue to execute their respective
obligations under the CONTRACT with the exception of those under arbitration.
ASSIGNMENT AND SUB-LETTING
Either PARTY shall not assign the CONTRACT unless mutually agreed between the. The
SUPPLIER shall be responsible for all EQUIPMENT supplied by all SUB-SUPPLIERS.
ENTIRE AGREEMENT
This is the entire Agreement between the PARTIES in relation to the subject matter hereof and the
terms and conditions incorporated therein shall not be contradicted by evidence of any oral, other or
prior agreement, understanding, representation or warranties express or implied.
RIGHTS OF THIRD PARTIES

A person who is not a party to this CONTRACT shall have no right under the Contracts (Rights of Third
Parties) Act 1999 to enforce any of its terms.
29
29.1

APPLICABLE LAW
The CONTRACT shall be construed and interpreted in all respects in accordance with its own
provisions and all agreements concluded between the PARTIES in connection therewith, and,
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subsidiary, in accordance with English Pakistani law and the exclusive jurisdiction of the English
Pakistani Courts
30

PATENTS AND USE OF DOCUMENTATION

30.1

All drawings and technical documents relating to the EQUIPMENT or its manufacture submitted by
one PARTY to the other, prior or subsequent to the formation of the CONTRACT shall remain the
property of the submitting PARTY. Drawings, technical documents or other technical information
received by one PARTY shall not, without the consent of the other PARTY, be used for any other
purpose than erection, Commissioning, operation or maintenance of the EQUIPMENT. They may
not, without the consent of the submitting PARTY, otherwise be used or copied, reproduced,
transmitted or communicated to a third PARTY.

30.2

The SUPPLIER agrees to indemnify the PURCHASER against any losses, expenses,
responsibilities and claims arising from the EQUIPMENT dealt with in this CONTRACT, which
constitute an infringement of the patent rights of a third party.

31

EFFECTIVE DATE OF CONTRACT

The CONTRACT shall become valid upon the formal execution (signing) by duly authorised officers of the
PARTIES.
32

LEGAL ADDRESSES AND AUTHORISED REPRESENTATIVES

Legal addresses and authorised representatives of the PARTIES with legally binding signatures.
PURCHASER:
Purchasers Company

SUPPLIER:
Rolls-Royce Power Engineering Plc
Sandland Court
Pilgrim Centre
Brickhill Drive
Bedford
England
MK41 7PZ

_____________________________
Sign.: Name, Title

_____________________________
Sign.: Name, Title

Date:

Date:

33

xx.xx.2008

xx.xx.2008

APPENDICES

APPENDIX 1 PROJECT TIME SCHEDULE

APPENDIX 2 DOCUMENT SUBMITTAL SCHEDULE
APPENDIX 3 CONTRACT PRICE AND TERMS OF PAYMENT SCHEDULE
APPENDIX 4 PERFORMANCE GUARANTEE WORDING
APPENDIX 5 COMMISSIONING PROCEDURE
APPENDIX 6 PRE-COMMISSIONING COMPLETION FORM
APPENDIX 7 PROVISIONAL TAKEOVER CERTIFICATE
APPENDIX 8 PERFORMANCE PROTOCOL
APPENDIX 9 SCOPE OF SUPPLY AND TECHNICAL SPECIFICATION
APPENDIX 10 BATTERY LIMITS
APPENDIX 11 PERFORMANCE VALUES
APPENDIX 12 SPARE PARTS

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