XXXXXXX AND XXXXX SHIPBUILDING
AND HEAVY INDUSTRIES LIMITED
and
GLOBAL MARINE INTERNATIONAL SERVICES CORPORATION
SHIPBUILDING CONTRACT
relating to
Hull No: 1739
INDEX
PARTIES
CLAUSE 1 INTERPRETATION
Definitions
General Interpretation
CLAUSE 2 DESCRIPTION
Principal Particulars
Yard Number
CLAUSE 3 DESIGN RESPONSIBILITY
Owner's Responsibilities
Builder's Responsibilities
Continuing Liability of Builder
Owner's Proprietary Rights
Builder's Proprietary Rights
CLAUSE 4 CLASS AND REGULATIONS
Classification Society and Class
Changes to Classification Requirements
CLAUSE 5 CONSTRUCTION, MATERIALS AND INSPECTION
Construction
Subcontracting
Standard of Construction
Use of Substitute Materials
Lightship Weight and Center of Gravity
Departures from Contemplated Construction
Provision of Lightship Weight Updates
Preparation of Critical Path Project Schedule and
Construction
Critical Path Analysis
Variation of Contractual Price
Right to attend tests and trials
Supervision and Inspection by Owner's
Authorized Representative
Defective Workmanship
Resolution of Disputes by Classification Society
Provision of Offices and Office Equipment
Payment for office facilities
Access to Vessel and Builder's Yard
Standards applicable to Project Managers
Replacement of Authorized Representatives
CLAUSE 6 MODIFICATIONS
Change Request by Owner
Builder's Acceptance and Confirmation
Builder's Proposal
Timing of Owner's Response
Request for Further Information
Change Request by Builder
Changes to Regulatory Requirements
Authority of Project Managers
Owner's Directive
Referral to Appeals Board
Dispute resolution
Classification Society
Appeals Board
Effect of Disputes
Denomination of Project Change Orders and
Directives
CLAUSE 7 OWNER FURNISHED EQUIPMENT
Delivery
Risk
Notice of Arrival and Expenses of Delivery
Storage
Inspection by Builder
Owner's Right to Interest
CLAUSE 8 PRICE AND TERMS OF PAYMENT
Price
Guarantees
Installment Schedule
Notice of Installments Falling Due
Submission of Stage Certificates and Invoices
Payment of increases in the Contract Price
Terms of Payment
Set off of Liquidated Damages
Failure to Take Delivery
CLAUSE 9 PROPERTY AND JURISDICTION
Vesting of Property, Allocation of Risk and
Builder's Lien
Labeling of the Vessel
OFE
Appropriation of Vessel parts
Assembly other than at Builder's Yard
CLAUSE 10 INSURANCE
Owner to Insure
Builder to Insure
Payment of deductible
Insurance Recoveries
Total Loss of Vessel
Partial Loss of Vessel
Other insurances to be effected
Provision of copies of insurances effected
Risk of Vessel
CLAUSE 11 TRIALS AND PERFORMANCE
Arrangements for Trials
Notice of Sea Trials
Failure of Owner's Representative to attend
Unfavourable Weather Conditions
Fuel Consumption
Vessel not Complying with Specifications
Punch List of Defects
CLAUSE 12 DELIVERY
Time and Place
Valid Tender of Delivery
Removal of Vessel
Builder's Bonus and Liquidated Damages
Incomplete Work
CLAUSE 13 FORCE MAJEURE
Force Majeure Delays
Notice of Delays
Revised Contract Delivery Date
Owner's Rights
CLAUSE 14 DEFAULT OF THE OWNER
Events of Default
Builder's right to Cancel
Remedies following cancellation
Claims against Owner
Exercise of such rights
CLAUSE 15 DEFAULT OF THE BUILDER
Events of Default
Owner's Right to Cancel or take possession
Parent Company Guarantee and Letter of Credit
Vesting of Title
Sub-Contract Right
OFE
Set Off
Termination Without Cause
CLAUSE 16 GUARANTEE
Builder's Guarantee
Notice of Guarantee Claims
Inspection by Builder
Transportation of Builder
Remedies
Guarantees from Subcontractors
Holding of Sub-Contract Rights
Exclusion of Implied Guarantees
Builder's Warranty that Works Free from
Encumbrances
Exceptions and Limitations
Guarantee Engineer
Limitation of Guarantees
CLAUSE 17 INDEMNITIES FOR INFORMATION SUPPLIED
Builder's Indemnity
Owner's Indemnity
CLAUSE 18 TAXES AND DUTIES
For account of Builder
For account of Owners
Other Taxes
CLAUSE 19 HEALTH AND SAFETY ENVIRONMENT AND EMPLOYMENT
Precedence of Local Legislation
Compliance with Applicable Government Regulations
Sub-Contractors
CLAUSE 20 LAW AND ARBITRATION
CLAUSE 21 ASSIGNMENT
CLAUSE 22 NOTICES AND COMMUNICATIONS
CLAUSE 23 WAIVER
CLAUSE 24 ENTIRE CONTRACT AND AMENDMENTS
CLAUSE 25 LIABILITY AND INDEMNIFICATION
Definitions
Builder's Responsibilities
Owner's Responsibilities
Consequential Damages
Limit of Indemnities
Allocation of risk
Extension of Indemnities
Range of liabilities
CLAUSE 26 BENEFIT OF INDEMNITIES
Extended to Owner Group
Extended to Builder Group
Agencies for Giving and Receiving Indemnities
EXECUTION
FIRST SCHEDULE - STAGE CERTIFICATE
SECOND SCHEDULE - FINAL STAGE CERTIFICATE
THIRD SCHEDULE - LETTER OF CREDIT
FOURTH SCHEDULE - PARENT COMPANY GUARANTEE
FIFTH SCHEDULE - BUILDER'S PROPOSAL
SIXTH SCHEDULE - CHANGE ORDER REQUEST
SEVENTH SCHEDULE - PROJECT CHANGE ORDER
EIGHTH SCHEDULE - OWNER FURNISHED EQUIPMENT
NINTH SCHEDULE - SPECIFICATIONS
TENTH SCHEDULE - SUBCONTRACTORS LIST
ELEVENTH SCHEDULE - MAKER'S LIST
TWELFTH SCHEDULE - ADJUSTMENTS OF CONTRACT PRICE
BETWEEN ACTUAL AND ESTIMATED STEEL WEIGHTS
THIRTEENTH SCHEDULE -BUILDER'S RATES FOR
PROVISION OF OFFICE FACILITIES
FOURTEENTH SCHEDULE - HEALTH AND SAFETY PROVISIONS
FIFTEENTH SCHEDULE - "PHASE 2 BASIC DESIGN
PACKAGE"
SIXTEENTH SCHEDULE - INSURANCE
THIS CONTRACT is made the 27th day of February,
One Thousand, Nine Hundred and Ninety Eight between:
(1) XXXXXXX AND XXXXX SHIPBUILDING AND HEAVY INDUSTRIES LIMITED,
a company organized and existing under the laws of Northern
Ireland and having its principal office at Queen's Island,
Belfast, Northern Ireland BT3 9DU (hereinafter called the
"Builder"); and
(2) GLOBAL MARINE INTERNATIONAL SERVICES CORPORATION, a Bahamian
company and having its principal office at c/o McKinney,
Xxxxxxxx & Xxxxxx, Xxxxxx House, 0 Xxxxxx Xxxxxx, X.X. Box
N. 3937, Nassau, Bahamas, (hereinafter called the "Owner").
WHEREBY IT IS AGREED that the Builder will construct,
complete and deliver to the Owner the Vessel described herein and
the Owner shall duly pay the Builder therefor all in accordance
with the following Clauses of this Contract:
CLAUSE 1 - INTERPRETATION
1.1 In this Contract
1.1.1 "Authorized Representative(s)" shall mean any
person who has been advised in writing by the
Owner Project Manager to the Builder or (as the
case may be) by the Builder Project Manager to the
Owner as having authority to act for the Owner or
(as the case may be) the Builder, and the extent
of such authority shall be defined in such advice;
1.1.2 "Appeals Board" shall mean a board comprised in
accordance with Clause 6.10;
1.1.3 NOT USED
1.1.4 "Builder Project Manager" shall mean the person
appointed by Builder, and Notified in writing to
the Owner as having authority to act on behalf of
Builder, in the discharge of Builder's obligations
hereunder. The authority of Builder Project
Manager includes, but is not limited to, the
authority to sign Project Change Orders pursuant
to Clause 6. Builder Project Manager may appoint
Authorized Representatives to act on behalf of
Builder, and shall Notify Owner in writing of such
appointment, defining in such Notice the extent of
the authority of each Authorized Representative;
1.1.5 "Builder's Proposal" shall mean a document in the
form set out at Schedule Five hereto;
1.1.6 Builder's Quarterly Invoices" shall mean invoices,
other than invoices for installment payments of
the Contract Price referred to in Clause 8,
submitted by the Builder to the Owner on a
quarterly basis and in accordance with the
provisions of Clause 8 which shall include, but
not be limited to, facilities charges for
telephone and other services and charges as more
specifically described in Clauses 5.15, 5.16 and
8.10.
1.1.7 "Builders Yard" shall mean the premises of the
Builder at Queen's Island, Belfast, Northern
Ireland;
1.1.8 "Change Order Request" shall mean a request in the
form set out at Schedule Six hereto;
1.1.9 "Classification Society" shall mean the American
Bureau of Shipping (also referred to as "ABS");
1.1.10 "Constructability" shall mean, in the context of
the Builder's obligations under Clause 3.2(a),
that the Vessel is physically capable of being
built on the basis of the Phase 2 Basic Design
Package. However, confirmation by the Builder of
such constructability shall not of itself give
rise to any different obligation of the Builder
under this Contract in relation to the performance
characteristics of the Vessel than that which
would otherwise have applied as part of the Works;
1.1.11 "Contract Delivery Date" shall mean 10th October
One Thousand Nine Hundred and Ninety-Nine as from
time to time extended pursuant to this Contract by
Permissible Delay;
1.1.12 "Contract Price" shall mean the price stipulated
in Clause 8.1 as amended by the provisions of this
Contract or any Amendment thereof;
1.1.13 "Delivery" and "Delivery Date" shall mean the date
upon which the Vessel is delivered to and accepted
by the Owner in accordance with the provisions of
Clause 12.2;
1.1.14 "Force Majeure" shall mean any of the
circumstances specified in Clause 13.1;
1.1.15 "Guarantee Period" shall mean the period referred
to in Clause 16.1;
1.1.16 "Letter of Credit" shall mean a letter of credit
in the maximum amount of United States Dollars
Thirty Million (US$30,000,000) substantially in
the form set out at Schedule Three executed by a
first class Bank acceptable in all respects to the
Owner;
1.1.17 "Makers List" shall mean the list attached at
Schedule Eleven hereto;
1.1.18 "Notice" shall mean formal notice as further
provided in Clause 22;
1.1.19 "Owner Furnished Equipment" or "OFE" shall mean
any item of equipment outfit and/or stores for the
Vessel on the list attached at Schedule Eight
hereto and as may otherwise be provided for in the
Specifications;
1.1.20 "Owner Subcontractor" or "Owner Supplier" shall
mean any person under contract to the Owner in
connection with the performance of any of the
obligations of Owner hereunder;
1.1.21 "Owner Project Manager" shall mean the person
appointed by Owner, and Notified in writing to the
Builder as having authority to act on behalf of
Owner, in the discharge of Owner's obligations
hereunder. The authority of Owner Project Manager
includes, but is not limited to, the authority to
sign Project Change Orders pursuant to Clause 6.
Owner Project Manager may appoint Authorized
Representatives to act on behalf of Owner, and
shall notify Builder in writing of such
appointment, defining in such Notice the extent of
the authority of each Authorized Representative;
1.1.22 "Parent Company Guarantee" shall be a guarantee in
the form set out at Schedule Four hereto and
executed by the Parent Company Guarantor;
1.1.23 "Parent Company Guarantor" shall mean Xxxxxxx and
Xxxxx Holdings plc, a company having its
registered office at Queen's Island, Belfast, BT3
9DU;
1.1.24 "Permissible Delay" shall mean a delay in the
Delivery of the Vessel on account of causes which
under the terms of this Contract permit
postponement of the Contract Delivery Date which
delay shall be documented by a Project Change
Order countersigned by Owner;
1.1.25 "Port of entry Northern Ireland" shall mean the
point at which the OFE arrives on the territory of
Northern Ireland whether by air or freight;
1.1.26 "Project Change Order" shall mean a document in
the form set out at the Seventh Schedule hereto;
1.1.27 "Regulatory Bodies" shall mean the authorities,
imposing rules and regulations with which the
construction and outfit of the Vessel must comply
in accordance with the Specifications;
1.1.28 "Specifications" shall mean the specifications,
plans and drawings signed by the Builder and the
Owner and attached at the Ninth Schedule hereto
and identified as forming an integral part of this
Contract or such revised or supplemental
specifications, plans or drawings as may
subsequently be agreed between the Owner and the
Builder and signed by the Builder Project Manager
and the Owner Project Manager, in accordance with
Clause 6 and "Specified" shall mean stipulated in
the Specifications;
1.1.29 "Subcontract(s)" shall mean any contract entered
into by Builder for the construction or
manufacture of any materials, machinery, services
or equipment for the Works;
1.1.30 "Subcontractor(s)" shall mean any person under
contract to the Builder for the construction, or
manufacture of any materials, machinery, services
or equipment for the Works;
1.1.31 "Subcontractor's List" shall mean the List
attached at the Tenth Schedule hereto;
1.1.32 "Supplier" shall mean any person under contract to
the Builder for the supply of any materials,
machinery, services or equipment for the Works;
1.1.33 "Valid Tender of Delivery" shall mean a tender of
the Vessel for Delivery in accordance with Clause
12.2;
1.1.34 "Vessel" means the vessel bearing Hull No.1739
which is the subject of this Contract and
generally as described in Clause 2 with all the
machinery, outfit, materials and equipment
appurtenant thereto.
1.1.35 "Work" or "Works" means the works and services
(which expressions shall include the supply of
materials and equipment) to be performed by the
Builder or, to the extent permitted by Clause 5.2,
by its Subcontractors or Suppliers under this
Contract.
1.2 The order of precedence for the documents forming this
Contract shall be:
1.2.1 in case of any inconsistency between any provision
of this Contract and the Specifications, this
Contract shall prevail; and
1.2.2 in case of any inconsistency between the
Specifications and a plan or drawing, the
Specifications shall prevail; and
1.2.3 in case of any inconsistency between one plan or
drawing and another plan or drawing, the later in
date shall prevail;
1.3 Any reference to a Clause is to a Clause of this Contract.
1.4 The Index and Clause headings appearing in this Contract are
inserted for convenience of reference only and shall not
affect the construction of this Contract.
CLAUSE 2 - DESCRIPTION
2.1 The Builder shall construct and deliver to the Owner a
completely outfitted and equipped Drill-ship (being, subject to
Clause 3, of the Owner's design) which is capable of operating as
a dynamically positioned drilling unit in water depths up to
12,000 feet and as otherwise provided for herein and in the
Specifications, including supplying and installing all
materials, labor, machinery, equipment, furnishings, fittings, as
specified in the Specifications save and except to the extent of
Owner Furnished Equipment. In the case of Owner Furnished
Equipment, the Builder shall install same and provide the
necessary foundations, wiring, piping and successfully- tested
and commissioned interface connections to ensure the Owner
Furnished Equipment functions as complete operational systems.
Upon Delivery, the Vessel and all its parts and appurtenances
shall be complete as specified hereinafter.
2.2 The Vessel shall have the Hull No.1739 and this number shall
be placed on the Vessel, her materials and outfit during
construction.
CLAUSE 3 - DESIGN
3.1 The Owner shall be responsible, at no cost to the Builder,
for:
(a) the preparation of the drawings and plans for the
Vessel which drawings and plans are called the "Phase 2
Basic Design Package", a list of which is at Schedule
Fifteen hereto;
(b) obtaining the approval of the Classification Society
and the Regulatory Bodies to the Phase 2 Basic Design
Package; and
(c) furnishing the Builder, in a timely manner, with the
Phase 2 Basic Design Package, and any modifications
thereto as a result of obtaining the approvals
described in (b) above.
The Builder acknowledges that, at the date of this Contract, it
is in receipt of the Phase 2 Basic Design Package together with
evidence of the status of approvals of the Classification
Society.
3.2 The Builder, as part of the Works and at no additional cost
to the Owner, shall be responsible for:
(a) confirming the Constructability of the Phase 2 Basic
Design Package, as provided to it by the Owner, to
ensure that it provides an appropriate basis to perform
the Works hereunder, and, in particular, that the
construction and completion of the Vessel is in
accordance with this Contract and the Specifications.
Builder shall, immediately on discovery of any such
inconsistencies, advise the Owner Project Manager in
writing of any inconsistencies in the Phase 2 Basic
Design Package relative to the Constructability of the
Vessel; and
(b) the preparation of Builder's construction plans and
drawings (the "Builder's Working Drawings") based upon
the Phase 2 Basic Design Package. Such plans and
drawings shall, if required, be submitted to the Owner
and the Classification Society for approval in
accordance with the provisions of this Contract and the
Specifications; and
(c) the performance of the Works on the basis of such plans
and drawings as from time to time are approved by the
Classification Society and the Owner under paragraph
(b) above; and
(d) using all reasonable endeavors to discover any
inaccuracies in plans, drawings, and data provided by
the Owner, or provided by a third party acting on
behalf of the Owner, for the purposes of the Works.
3.3 Builder shall be and remain liable hereunder for:
(a) any defect or deficiency in the preparation of the
Builder's Working Drawings, whether or not the same
have been approved by the Owner or the Classification
Society, save to the extent that such defect or
deficiency is caused by inaccuracies in plans, drawings
and/or data supplied by Owner, unless the Builder shall
have failed to use all reasonable endeavours to
discover detectable inaccuracies in such plans,
drawings or data; and
(b) any design work undertaken by Builder in connection
with a Project Change Order.
3.4 The design of the Vessel and all plans and drawings relating
to the Vessel and all intellectual property rights in the same
(such design, plans and drawings and all intellectual property
rights in the same being herein called the "Owner I.P.R.") shall
at all times be and remain the sole and exclusive property of the
Owner who reserves all proprietary rights in and to the same.
The Builder will not obtain any rights of ownership or other
proprietary rights in connection therewith or any part thereof
and will not act in any way to indicate to any third party that
he has any right in or to.
The Builder shall only be entitled to use the Owner I.P.R.
for the sole purpose of (and for no other purpose than)
performing the Works.
3.5 Notwithstanding anything to the contrary in Clause 3.4
above, the Builder shall retain ownership of all Builder's
Working Drawings and all ownership and intellectual property
rights thereto, except for those which have been developed
directly from drawings, plans or other information supplied by
Owner, Owner Subcontractor, Owner Supplier, or the Phase 2 Basic
Design Package. For the avoidance of doubt, Owner shall own all
Builder's Working Drawings and all ownership and intellectual
property rights thereto, inclusive of those approved by the
Classification Society, which have been developed directly from
drawings, plans or other information supplied by the Owner, Owner
Subcontractor, Owner Supplier or the Phase 2 Basic Design
Package. With respect to all Builder's Working Drawings,
regardless of ownership, the Builder shall:
(a) make copies thereof available to the Owner or
Classification Society (and Owner shall be entitled to
make the same available to Owner Subcontractor or Owner
Supplier or any third party for the purposes described
in this Clause) in the course of performance of the
Works or, at the request of the Owner, to assist the
Owner, or any third party, in the operation, repair or
maintenance of the Vessel after delivery; and
(b) not design or build any drillship or similar vessel to
the Vessel on the basis of "Owner IPR"; and
(c) not disclose Owner IPR nor Builder's Working Drawings
to third parties whether to enable them to effect such
design of any drillship or vessel similar to the Vessel
or otherwise.
CLAUSE 4 - CLASS AND REGULATIONS
4.1 The Vessel shall be built to ABS rules and under their
survey to Class A1-E Mobile Offshore Drilling Unit - DPS-3
AMS, ACCU, R2S and to the specified rules and regulations of the
Regulatory Bodies, including any alterations and modifications
thereto published as at the date of signature of this Contract
and including rules or regulations announced but not in effect on
the date of signature of this Contract provided that they are
scheduled to come into effect prior to the Contract Delivery
Date, so as to enable the Vessel to be registered under the
Panamanian Flag. All fees and charges incidental to
classification and to compliance with the specified rules and
regulations of Regulatory Bodies and the requirements of this
Contract payable in connection with the construction of the
Vessel shall be for the account of the Builder, except for fees,
charges and expenses of the Classification Society incidental to
the approval of the Phase 2 Basic Design Package and registration
of the Vessel which shall be for account of the Owner.
4.2 If, after the date of signature of this Contract, any
requirements of the Classification Society or of the Regulatory
Bodies, with which the construction of the Vessel is required to
conform including requirements announced prior to the date of
signature of this Contract and scheduled to come into effect
prior to the Contract Delivery Date, are altered or changed by
the Classification Society or Regulatory Bodies and the parties
are unable to obtain a dispensation therefrom or waiver of
compliance therewith, the Builder shall comply with any such
alterations or changes (if any) in the construction of the Vessel
occasioned thereby, and any modifications or alterations to the
Contract Price and/or Contract Delivery Date, arising out of the
changes in the rules or regulations shall be determined in
accordance with Clause 6.
CLAUSE 5 - CONSTRUCTION, MATERIALS AND INSPECTION
5.1 The Builder shall commence performance of the Works and
shall proceed with the same with all due diligence, so as to
achieve the completion of the Works and Delivery of the Vessel in
accordance with this Contract and the Specifications and the
Contract Delivery Date.
5.2 The Builder may sub-contract any portion of the Work of the
Vessel to any of the Subcontractors or Suppliers respectively
specified and/or listed in the Subcontractor's List or Maker's
List attached at schedules Ten and Eleven respectively, but shall
not otherwise be entitled to sub-contract such Work without the
Owner's consent which shall not be unreasonably withheld.
5.3 Subject to all the terms of this Contract, the Vessel, her
machinery, outfit, equipment, materials and workmanship shall be
in accordance with this Contract and the Specifications and shall
otherwise be in conformity with first class commercial
shipbuilding practice, as applicable in Western Europe.
5.4 If any specified materials are not available when required
for incorporation in the Vessel, the Builder shall be at liberty
to use other suitable materials in substitution therefor subject
to the approval of the Owner which approval shall not be
unreasonably withheld and (where applicable) to the approval of
the Classification Society and other Regulatory Bodies. If such
approvals are forthcoming, any consequent modification or change
shall be dealt with in accordance with the provisions of Clause
6.
5.5 Within thirty (30) days of the signature of this Contract,
Owner shall supply to Builder all available estimates of weight
and center of gravity of OFE items. Further, Owner shall, upon
its receipt, supply Builder with certified vendor drawings for
OFE as soon as is practically possible. Within sixty (60) days
of the signature of this Contract, Builder shall derive an
estimate of steel weight and the center of gravity of the Vessel
from the Phase 2 Basic Design Package. Within one hundred and
twenty (120) days of the signature of this Contract, Builder
shall submit to the Owner for approval a complete estimate of the
estimated weight and center of gravity of the Vessel. Agreement
shall be reached as quickly as possible between Builder and Owner
as to the baseline lightship weight and center of gravity (herein
referred to as "Baseline Lightship Weight" and "Center of
Gravity"). Any changes in the weight and/or center of gravity as
a result of changes in OFE, shall be dealt with under the change
order procedure in accordance with Clause 6.
5.6 Departures from the construction contemplated in the above
agreement which affect the Baseline Lightship Weight and Center
of Gravity shall not be undertaken until Builder has submitted to
the Owner his estimate of the effect on the lightship weight and
center of gravity of the Vessel and obtained written approval of
Owner to proceed with the departure. Individual departures from
any agreed weight group of 227KG (500lb) or less shall not
require written approval.
5.7 The Builder shall continuously update the lightship weight
as working drawings are produced and approved and the weight of
the equipment becomes available. After the date of the agreement
of the Baseline Lightship Weight and Center of Gravity of the
Vessel, as provided for in Clause 5.5 above, Builder shall submit
to Owner a monthly report which details:
(i) an update of the comprehensive lightship weight and
center of gravity of the Vessel; and
(ii) a tabulation of all departures from the Baseline
Lightship Weight and Center of Gravity of the Vessel
which details their respective cumulative effects
thereto.
5.8 The Builder shall prepare a Primavera level 3 critical path
project schedule within thirty (30) days of signature of this
Contract for submission to Owner, and shall give information to
and cooperate with the Owner Project Manager and the Owner in
this respect in order that all parties are thoroughly familiar
with the progress made and to be made in order that the Vessel
may be completed by the Contract Delivery Date. The scheduled
delivery dates and all delivery requirements of items of
equipment which can affect the critical path project schedule
shall be clearly identified in such critical path project
schedule. The project schedule shall include a critical path
analysis and be updated monthly and submitted to Owner in
conjunction with the monthly report referred to in Clause 5.7
above.
5.9 To the extent that the actual steel weight of the completed
Vessel, as defined in Schedule Twelve hereto, differs from the
estimated steel weights set out at Schedule Twelve hereto the
Contract Price shall be adjusted in accordance with the rates set
out in that Schedule.
5.10 During construction of the Vessel the Builder will permit
Owner's Authorized Representatives to attend tests and trials
which shall be advised in writing to Owner Project Manager as
follows:
(i) in the case of a test or trial where a representative
of Owner Supplier must be present, Builder shall give
thirty (30) days provisional advisement, and seven (7)
days definite advisement of such trial; and
(ii) in the case of a test or trial for which a formal
procedure with acceptance/rejection criteria is
applicable, Builder shall give seventy-two (72) hours
advisement of such trial;
(iii)in the case of a day to day inspection, Builder shall
give reasonable notice and shall use its best
endeavours to give such advisement at least the day
before such test or trial.
Such examination and inspection shall in no way diminish, affect
or impair the obligations, guarantees or undertakings of the
Builder in relation to the due and proper execution of the Work
or the materials employed or guarantees hereinafter mentioned.
The failure of an Owner's Authorized Representative to attend any
test or trial, after receipt of reasonable notice as above, shall
be deemed a waiver of Owner's right to attend same, however
Builder shall furnish to Owner the results of such tests and
trials as soon as practicable thereafter.
5.11 The Builder will also permit Owner's Authorized
Representatives to have access during all working hours to the
facilities of the Builder and its Subcontractors where the Works
are being carried out.
5.12 If during construction and prior to dock and sea trials
the Owner, its Project Manager or Authorized Representatives
becomes aware of any defect or omission in the Vessel or its
machinery arising out of the Works they shall as soon as
practicable specify the same in writing to the Builder Project
Manager and
(i) if the Builder agrees the alleged defect or omission or
if under Clause 6.9 the Classification Society so
decides, the Builder shall at its own cost rectify any
such defect or omission; and
(ii) in any event Owner shall have the right to issue a
directive instructing Builder to rectify the defect or
omission. Builder shall comply with such directive but
such compliance shall not prejudice either Party's
rights under Clause 5.13.
5.13 Any dispute which may arise between Owner and Builder during
the construction of the Vessel in relation to the workmanship,
materials or conformity with the Specifications shall be resolved
in accordance with Clauses 6.9 and 6.10 or if not so resolved,
may be referred to arbitration in accordance with Clause 20.
5.14 The Builder shall provide, without cost to Owner, the
following:
(i) a single office facility at the Builder's Yard, for
fifteen (15) people to enable the Owner Project Manager
and Owner's Authorized Representatives to carry out
their duties. Such facility will comprise suitable
office fittings including drawing tables, stools,
desks, chairs, filing cabinets, toilets, lighting,
heating, hot and cold running water, cleaning, the
installation of telephone (comprising four (4) outside
lines and three (3) internal lines) and fax services
all free of charge to the Owner; and
(ii) Builder shall also supply a heated portable office on
or near the Vessel, with one (1) shipyard phone, one
(1) desk and four (4) chairs; and
(iii)all facilities for a further fifteen (15) people
including offices, heating and light, telephones,
drawing tables, stools, desks, chairs, filing cabinets,
toilets, hot and cold running water facilities, as may
be required for the Owner's operations personnel. Such
facilities for Owner's operations personnel shall be
provided six (6) months prior to the Contract Delivery
Date.
5.15 Telephone rental and unit charges and the installation and
use of any additional communication services or any other
additional accommodation or services or equipment as may be
provided by the Builder at the Owner's request shall be paid for
by the Owner against the Builder's Quarterly Invoices. Builder
shall invoice Owner at its cost without uplift or premium for the
charges mentioned above.
5.16 The Builder shall permit Owner's operations personnel, Owner
Subcontractors and Owner Suppliers, all necessary and appropriate
access to the Vessel for outfitting and rig up purposes. Owner
Project Manager and Builder Project Manager shall liaise and
shall co-operate with each other to minimize any disruption.
Owner's operations personnel, Owner Subcontractors and Owner
Suppliers shall be permitted ready access to the Builder's Yard
to enable them to carry out and complete their work to ensure
that the Vessel is fully operational at Delivery. The Builder
shall provide the necessary facilities and support, which shall
be paid by Owner against Builder's Quarterly Invoices in
accordance with the schedule of rates, attached at Schedule
Thirteen hereto.
5.17 The Owner undertakes that its Project Manager and
Authorized Representatives shall carry out their duties hereunder
in accordance with first class commercial shipbuilding practice
as applicable in Western Europe and in such a way as to avoid any
unnecessary increase in building cost or delay in the Builder's
construction programme.
5.18 Either party shall have the right by written Notice to
request the other to replace its Project Manager or any of its
Authorized Representatives if they are reasonably deemed by the
objecting party to be unsuitable or unsatisfactory for the proper
progress of the Vessel's construction. If the party in receipt
of such Notice shall agree, the replacement of such Project
Manager or Authorized Representative shall take place as soon as
reasonably practicable.
CLAUSE 6 - MODIFICATIONS AND CHANGE ORDERS
6.1 Owner may, at any time prior to Delivery of the Vessel,
issue a Change Order Request in writing to the Builder,
instructing the Builder to modify or change the Specifications.
6.2 If the Builder considers such modification or change can be
carried out without alteration to the Contract Price or Contract
Delivery Date, the Builder shall, within five (5) days confirm
this in writing to the Owner and proceed with such modification
or change.
6.3 If the Builder considers such modification or change cannot
be carried out without alteration to the Contract Price or
Contract Delivery Date, the Builder shall within five (5) days or
where the extent of the modification or change requires a longer
period, such longer period as the parties shall agree, submit to
the Owner in writing a Builder's Proposal which shall detail:
(i) the amount of any increase or decrease to the Contract
Price, representing the reasonable cost or saving for
the relevant modification or change; and
(ii) the extent of any reasonable extension or advancement
in the Contract Delivery Date of the Vessel occasioned
by such change or modification;
(iii)any other impact on the Specifications (including
without limitation, the Baseline Light ShipWeight or
Center of Gravity of the Vessel).
6.4 Within five (5) days, or where the extent of the
modification or change justifies a different period, and in
particular where the Builder deems the item or component to be
modified or changed to be critical to the timely construction of
the Vessel, such other period as the parties shall agree, of
receipt of a Builder Proposal, Owner shall advise Builder in
writing of its acceptance or rejection of the Builder's Proposal.
If the Builder's Proposal is accepted, the Owner shall
countersign a Project Change Order submitted by Builder.
6.5 Owner shall have, in the event that it does not accept the
Builder's Proposal, the right to request such further information
or documentation to substantiate the Builder's Proposal, which
Builder shall promptly supply. Any dispute which may arise
between Owner and Builder during the construction of the vessel
in relation to any modification or change to the Specification,
Contract Price or Contract Delivery Date shall be resolved in
accordance with Clauses 6.9 and 6.10, or if not so resolved may
be referred to arbitration in accordance with Clause 20.
6.6 In the event that the Builder wishes to propose a
modification or change to the Specifications, the Builder shall
advise Owner Project Manager in writing of the suggested
modification or change, and shall submit a Builder's Proposal
complying in all respects with Clause 6.3 above. The Owner shall
have the right to reject or accept the suggested modification or
change in its discretion. In the event of an acceptance, the
Owner shall countersign the Project Change Order submitted by the
Builder.
6.7 Paragraphs 6.2, 6.3 and 6.4 shall apply mutatis mutandis, in
the event that, following the signature of this Contract, any
alterations or modifications are made to the laws, rules,
regulations and enactments (including any rules or regulation or
alterations or modifications thereto announced but not in effect
on the date of signature of this Contract and provided they are
scheduled to come into effect prior to the Contract Delivery
Date), to which the construction of the Vessel is required to
conform, save that each party on becoming aware of such
modification, deletion or addition shall forthwith advise the
other in writing.
6.8 The Builder Project Manager and the Owner Project Manager,
respectively, shall have authority to bind the Builder and Owner,
respectively, in relation to this Clause.
6.9 During the performance of the Works, and prior to the
Delivery of the Vessel, if the value of any dispute in respect of
any matter referred to in Clause 5.12, 5.13, 6.5 or 13.3 is not
more than United States Dollars fifty thousand (US$50,000) (or
equivalent), it shall be referred to the Senior Representative of
the Classification Society on site, acting as an expert and not
as an arbitrator, whose decision shall be final and binding on
the parties. If the value of the dispute exceeds United States
Dollars fifty thousand (US$50,000) (or equivalent), the parties
may by mutual agreement refer the dispute to the Senior
Representative of the Classification Society on site acting as an
expert and not as an arbitrator whose decision, in the event of
such referral, shall be final and binding on the parties.
With respect to any dispute of any matter referred to in Clause
6.5 only which is not more than United States Dollars fifty
thousand (US$50,000) (or equivalent) if the dispute mechanism
outlined hereinabove should be deemed unsatisfactory by either
Party, the Parties will endeavour to establish a mutually-agreed
dispute resolution mechanism for such disputes. Failing the
establishment of the Parties of a mutually-agreed dispute
resolution mechanism for such Clause 6.5 disputes, any and all
such disputes may be referred by either Party to arbitration in
accordance with the terms and conditions of Clause 20 hereof.
6.10 Owner and Builder shall use all reasonable efforts to agree
the necessary alteration to the Contract Delivery Date, Contract
Price or Specifications arising as a consequence of the proposed
modification or change but, if no agreement can be reached,
either party may refer the dispute to an Appeals Board. Such
Appeals Board shall consist of one representative of each party
who is not part of the day to day activities involved in the
performance of the Works. If the Appeal's Board is unable to
reach an agreed decision either party shall be entitled to
initiate arbitration procedures under Clause 20.
6.11 Notwithstanding that Builder Proposal has not been issued or
that a Project Change Order has not been countersigned by Owner
in relation thereto, Owner shall at any time have the right to
issue a directive instructing Builder to proceed with the change
to the Specifications in question. Builder shall comply with
such directive, but such compliance shall not prejudice either
party's rights to refer the dispute to the Senior Representative
of the Classification Society on site in accordance with Clause
6.9, or to the Appeals Board as set forth in Clause 6.10 or to
initiate arbitration proceedings as set forth in Clause 20
hereunder.
6.12 All Project Change Orders and/or the value for any directive
issued by Owner hereunder this Clause 6 shall be denominated in
US Dollars. The US Dollar figure shall be based on the official
exchange rate for British Pounds Sterling in effect at the time
the Project Change Order is signed by both Parties or the Owner
directive is issued.
CLAUSE 7 - OWNER FURNISHED EQUIPMENT
7.1 Owner shall deliver to Builder's Yard all items of Owner
Furnished Equipment in accordance with the delivery date for
such item specified in the initial Primavera critical path
project schedule (as amended from time to time by Permissible
Delay), (the "OFE Scheduled Delivery Date").
7.2 All items of Owner Furnished Equipment shall be at Builder's
risk from arrival at the dock or gates of the Builder's Yard.
7.3 NOT USED
7.4 From time of arrival at Builder's Yard, the Builder shall,
at its own cost, transport and store all items of Owner Furnished
Equipment in secure and appropriate storage in accordance with
Owner Supplier's manual and instructions (and/or Owner's
instructions) in the minimum number of separate warehouse(s) or
area(s) practicable, taking care that the same shall not be
damaged, and shall clearly mark all items of Owner Furnished
Equipment as such and as the property of the Owner.
7.5 On arrival of each item of Owner Furnished Equipment at the
Builder's Yard, the Builder shall inspect the same to ensure that
the items contain no obvious defects or signs of damage, and
shall measure and review the same to ensure that they are in
accordance with the relevant Owner Supplier's specified
dimensions and interfaces. Builder shall promptly advise Owner
Project Manager in writing of any items which are damaged or do
not appear to be in accordance with such specified dimensions or
interfaces.
7.6 Provided that Owner has delivered the item of Owner
Furnished Equipment on or before the OFE Scheduled Delivery Date,
where the value of such an item exceeds United States Dollars
five hundred thousand (US$ 500,000) and unless so instructed by
Owner, where such item is not installed within sixty (60) days
following the Scheduled Delivery Date, Builder shall pay to Owner
interest at the rate of one half per cent (0.5%) of the price of
such item pro rata per month calculated daily from and including
the sixty-first (61st) day and paid monthly. Owner shall be
entitled to set off all sums due to it pursuant to this Clause
against the installment of the Contract Price payable pursuant to
Clause 8.3.5.
CLAUSE 8 - PRICE AND TERMS OF PAYMENT
8.1 The total cost for Drillship No 1739 shall be United States
Dollars Two Hundred and Sixty Seven Million, Seven Hundred and
Ninety Four Thousand, Two Hundred Thirty Four (US$267,794,234)
comprised as follows:
A United States Dollars One Hundred and Sixty One
Million, Five Hundred Eighty Five Thousand, Two Hundred
Thirty Four (US$161,585,234) (the "Contract Price") for
detail design, procurement (exclusive of OFE, see
below), construction, installation of all equipment,
commissioning and setting to work of the total
drillship, all according to this Contract.
B United States Dollars One Hundred Six Million, Two
Hundred Nine Thousand (US$106,209,000) for OFE. Unless
otherwise mutually agreed the Owner shall be
responsible for all payments due in respect of OFE to
Owner Suppliers and Owner Subcontractors.
8.2 Builder shall provide the Parent Company Guarantee and the
Letter of Credit (attached in the forms of the Third and Fourth
Schedules, respectively) to Owner at the date of signature of
this Contract.
8.3 Provided that Owner has received the Parent Company
Guarantee and Letter of Credit, payment of the Contract Price
shall be made by installments from or on behalf of the Owner to
the Builder as follows:-
8.3.1 Twenty percent (20%) of the Contract Price on
signature of this Contract within seven (7) days
of Owner's receipt of Builder's invoice;
8.3.2 Twenty percent (20%) of the Contract Price at the
start of preparation, intended to be the
continuous cutting of steel but not before March
2, 1998;
8.3.3 Twenty percent (20%) of the Contract Price on keel
laying of a minimum of five hundred (500) tons of
steel, but not before September 1, 1998;
8.3.4 Twenty percent (20%) of the Contract Price at
floatation of the Vessel in a condition where it
can be floated without requiring new docking, but
not before April 15, 1999; and
8.3.5 Twenty percent (20%) of the Contract Price, plus
or minus any increases or decreases occasioned in
accordance with the provisions of this Contract or
any Amendment thereof which have not previously
been accounted for by adjustment of this or any
earlier installments, at Delivery of the Vessel,
estimated to be October 10, 1999.
8.4 The Builder shall by not less than seven (7) days advance
Notice in writing advise the Owner of the date upon which any of
the installments referred to in Clauses 8.3.2 to 8.3.5 hereof
shall become payable.
8.5 Payment of each of the installments at 8.3.2 to 8.3.4 above
shall be subject to the receipt by the Owner of
(i) a Stage Certificate (in the form set out in the First
Schedule hereto) signed by the Builder and
countersigned by the Owner and
(ii) following such counter-signature, the Builder's invoice
in the amount of the relevant installment.
8.6 Notwithstanding Clause 8.1, if the aggregate of any
increases in the Contract Price for the Vessel resulting from the
operation of Clause 6 or any Amendment to this Contract amounts
to an increase of more than two percent (2%) in the Contract
Price at any time during the construction of the Vessel (such
increase over and above two (2%) percent being called the
"Excess"), the following shall apply:
(i) if there shall be an Excess on or before payment of the
installment referred to in Clause 8.3.2, forty (40%)
per cent of the Excess shall be paid together with such
installment and sixty (60%) per cent shall be paid in
equal proportions with the installments referred to in
Clauses 8.3.3. to 8.3.5;
(ii) if there shall be an Excess after payment of the
installment referred to in Clause 8.3.2, but on or
before payment of the installment referred to in Clause
8.3.3, sixty (60%) per cent of the Excess shall be paid
together with such installment and forty (40%) per
cent shall be paid in equal proportions with the
installments referred to in Clauses 8.3.4. to 8.3.5;
(iii)if there shall be an Excess after payment of the
installment referred to in Clause 8.3.3, but on or
before payment of the installment referred to in
Clause 8.3.4, eighty (80%) per cent of the Excess shall
be paid together with such installment and twenty
(20%) per cent shall be paid with the installment
referred to in Clause 8.3.5;
For the avoidance of doubt, any Excess occurring following the
payment of the installment referred to in Clause 8.3.4 and/or any
increases that, in aggregate, do not exceed two per cent (2%)
shall be paid together with the installment referred to in Clause
8.3.5.
8.7 The amount of each of the installments referred to in Clause
8.3 hereof shall be paid in US Dollars free of bank charges
together with any VAT and other tax or duty then payable by the
Owner direct to the Builder's Account No: by xxxxxx's draft or
telegraphic transfer within seven (7) days following receipt by
Owner of the Builder's invoice in accordance with Clause 8.5,
and, if not so paid shall (without prejudice to any other rights
of the Builder in respect of non payment) bear interest from the
due date until payment at the rate of two percent (2%) over one
month LIBOR from time to time for the particular currency.
8.8 Any amounts for bonuses or liquidated damages under Clause
12 shall be calculated and determined on or before Delivery of
the Vessel and shall be payable on the Delivery Date, and Owner
shall be entitled to net-off such amount(s) against the
installment referred to in Clause 8.3.5 above.
8.9 If the Owner fails to take delivery upon a Valid Tender of
Delivery by the Builder, the Owner shall nevertheless make full
and final payment on the date of such valid tender of Delivery
and shall thereafter reimburse the Builder for all costs and
expenses which the Builder reasonably incurs by reason of the
Owner's failure to take Delivery.
8.10 Other sums due to Builder by Owner hereunder this Contract,
except those payable for bonus or by Amendment, shall be the
subject of Builder's Quarterly Invoices. For each quarter ending
after the date of the signing of this Contract Builder, shall
prepare and submit to Owner an invoice covering sums for and
including, but not limited to, additional services which are
requested by Owner, but are not provided for in any Project
Change Order, and facilities usage for Owner's Subcontractors and
Owner's Suppliers provided for in Clause 5.16, above. Upon its
receipt of Builder's Quarterly Invoices, Owner shall pay the
undisputed portion within thirty (30) days. Undisputed amounts
of Builder's Quarterly Invoices beyond the thirty (30) day period
shall bear interest at the rate of two per cent (2%) over
one-month LIBOR from time to time for the particular currency.
CLAUSE 9 - PROPERTY AND JURISDICTION
9.1 Upon payment of the sum due under Clause 8.3.1 the Vessel,
as it is constructed, and all machinery, equipment and materials
whether wholly or partially finished or unfinished from time to
time appropriated or intended for it in the Builder's Yard or
elsewhere shall become and remain the absolute property of the
Owner (but at the risk of the Builder) notwithstanding that any
such machinery, equipment and materials shall subsequently be
worked upon by the Builder or its Subcontractors or otherwise
processed or incorporated into the Vessel and shall not be within
the ownership or disposition of the Builder, but the Builder
shall at all times have a lien thereon for any part of the
Contract Price which is unpaid and for any sums due from time to
time in accordance with this Contract provided that such lien
shall not continue or be enforceable by or on behalf of the
Builder in any of the circumstances described in Clauses 15.1 or
15.2.
9.2 Immediately upon machinery, equipment or material becoming
the property of the Owner under the provisions of Clause 9.1 the
Builder shall place or cause to be placed thereon the yard number
of the Vessel and shall place such number at the bow of the
Vessel and shall take all reasonable steps to cause all
machinery, equipment and materials for the Vessel to be numbered
as aforesaid by itself or its Subcontractors.
9.3 Any items, other than Owner Furnished Equipment (which shall
be and remain the property of the Owner), not used in the
construction of the Vessel shall after Delivery revert to and
become the property of the Builder.
9.4 Without prejudice to the rights of Owner as provided in
Clause 15, any engines, boilers, machinery or materials which are
part of the Vessel or which are appropriated thereto shall not
after delivery to the premises of the Builder be removed outside
the Builder's Yard except for the purposes of effecting repairs
thereto or obtaining replacements therefor.
9.5 Without prejudice to the rights of Owner as provided in
Clause 15, the Vessel shall not be assembled or floated other
than at the Builder's Yard without the prior approval of the
Owner.
CLAUSE 10 - INSURANCE
10.1 Owner and Builder respectively shall each effect the
insurances listed at the Sixteenth Schedule hereto, on the terms
and conditions therein set out and shall, within fourteen (14)
days of signature of this Contract supply each other with copies
of all such insurances effected.
10.2 Owner's Builder's risk insurance referred to in Schedule 16
contains a deductible of United States Dollars two hundred
thousand (US$ 200,000). Builder shall therefore, in addition to
the insurances listed at Schedule 16, procure insurance from the
date of signature of this Contract in the joint names of Owner
and Builder, in the amount of United States Dollars two hundred
thousand (US$200,000) in respect of each and every claim, with a
deductible of United States Dollars fifty thousand (US$50,000).
10.3 In the event that the Vessel should suffer partial damage
between the date of signature of this Contract and the Delivery
Date, Owner shall be liable to pay to Builder the first United
States Dollars fifty thousand (US$50,000) payable under each and
every claim if the event which has given rise to the claim occurs
as a result of the sole fault of Owner.
10.4 In the event of an actual, constructive, compromised or
arranged total loss of the Vessel prior to the Delivery of the
Vessel, either the Owner or the Builder shall be entitled to
terminate this Contract by serving upon the Builder or the Owner
as the case may be, written Notice of termination, such Notice to
be dispatched within thirty days of the date upon which the
insurers accept that the Vessel has become an actual,
constructive, compromised or arranged total loss.
10.5 In the event of any loss or damage being sustained by the
Vessel prior to Delivery which does not constitute an actual,
constructive, compromised or arranged total loss the Builder
shall repair and make good that loss or damage (hereinafter
referred to as a "partial loss") to the approval of the
Classification Society and reasonable approval of the Owner so
that the Vessel in all respects meets the requirements of this
Contract at the Specifications.
10.6 The proceeds of any claim shall be dealt with as follows:-
10.6.1 in the case of a partial loss, when the insurers are
satisfied that the Builder has made good the loss or damage the
occurrence of which had given rise to the claim or when the
insurers are satisfied that the Builder has made sufficient
progress in repairing or making good the loss or damage the
occurrence of which had given rise to the claim, then the
insurers shall pay to the Builder the whole proceeds where the
repairs are complete or such part of the proceeds as the insurers
may decide as a payment on account of the partial repair.
10.6.2 in the event of an actual, constructive, compromised or
arranged total loss, if refund has not been made pursuant to
Clause 15, any amounts received and retained by the Owner out of
the insurance proceeds shall be set off against any liability of
Builder to Owner pursuant to Clause 15 hereof, and, to the extent
such refund has been made, any proceeds shall be paid to Builder.
CLAUSE 11 - TRIALS AND PERFORMANCE
11.1 Prior to the Vessel's delivery to, and acceptance by the
Owner, the Vessel shall undergo sea trials during a single trip,
at a place appointed by the Builder and in accordance with the
provisions of Specifications. The Vessel shall also undergo dock
trials in accordance with the provisions of the Specifications.
11.2 The Owner shall receive from the Builder at least thirty
(30) days provisional Notice and seven (7) days definite Notice
of the time and place of the sea trials of the Vessel.
11.3 The Authorized Representatives of the Owner who will attend
and witness the performance of the Vessel during such sea trials
shall be present on the date specified in such notice. Failure
of the Owner or any of the Authorized Representatives to be
present after due notice of not less than seven (7) days shall
render the Owner liable for the costs of the abortive sea trial
arrangements and shall constitute a Permissible Delay extending
the Contract Delivery Date of the Vessel by the period of delay
caused by such failure to be present which extension shall be
effected by a Project Change Order in accordance with Clause 6.
11.4 In the event of the weather on the date specified for the
sea trials being in the reasonable opinion of either party
unfavorable, then the same shall take place on the first
available day thereafter that weather conditions permit. If
during the sea trials such changes in weather shall occur as
would, in the opinion of either party , have precluded any
commencement of the sea trials had the change in weather occurred
before the sea trials had started then, in such event, either
party shall have the option to discontinue the sea trials and
require that the date for the sea trials be postponed until the
first favorable day next following unless the Owner shall agree
to accept the Vessel on the basis of the sea trials made prior to
such sudden change in weather condition. Any delay in sea trials
caused by adverse weather conditions shall be a Force Majeure
delay within the terms of Clause 13.
11.5 Prior to dock and sea trials the Owner shall select the fuel
oil and main engine lubricating oils in compliance with the
Specifications and machinery manufacturer's recommendations,
whereupon the Builder shall provide the Vessel with the required
quantity of fuel oil, lubricating oils, grease and other stores
necessary for the conduct of such dock and sea trials. Upon
Delivery of the Vessel, the Owner shall pay to the Builder a sum
equal to the cost of fuel oil and such lubricating oils, greases
and other stores used during such trials and any such fuel oil,
lubricating oils, greases and other stores on board the Vessel at
Delivery.
11.6 If the Vessel fails any of the dock or sea trials for which
the Builder is responsible, the Builder shall rectify any defects
in respect of the Works which caused such failure and shall
conduct additional trials until the Vessel meets or exceeds the
applicable testing criteria.
11.7 No later than two (2) weeks prior to the anticipated
Delivery Date the Owner and the Builder shall prepare a final
punch list of defects. If such list cannot be agreed, any
dispute shall be resolved in accordance with Clauses 6.9 and 6.10
or, if not so resolved, may be referred to arbitration in
accordance with Clause 20.
This sub-clause is without prejudice to Builder's obligation to
deliver the Vessel in accordance with the Contract and the
Specifications.
CLAUSE 12 - DELIVERY
12.1 The Vessel shall be delivered to the Owner by the Builder at
the Builder's Yard on or before the Contract Delivery Date.
12.2 Provided that:
(i) the Vessel is in compliance with the requirements of
the Contract and the Specifications; and
(ii) all the Certificates referred to below are tendered
then Delivery of the Vessel shall be forthwith effected by the
concurrent signature by the Owner and the Builder of a
Certificate of Delivery acknowledging delivery of the Vessel by
the Builder and acceptance thereof by the Owner.
Upon Delivery of the Vessel the Builder shall hand to the Owner,
the Builder's Certificate, the Certificate of the Classification
Society, all other Certificates required to enable the Owner to
operate the Vessel and all other certificates, provisional
certificates and protocols. If the Builder is unable to provide a
final Classification Society Certificate at Delivery he shall be
entitled to provide an interim certificate, provided that the
Builder shall furnish Owner with the final certificate as
promptly as possible thereafter.
If the relevant certificates, provisional certificates and/or
protocols are not available due to delay in the provision by
Owner, Owner Subcontractors or Owner Suppliers of the operations
manuals including stability book, necessary to obtain the same,
provided such delay was not occasioned by failure of Builder or
its Subcontractors or Suppliers, to provide Owner, in a timely
manner, with the necessary information and data to compile such
operations manuals, Builder shall nevertheless be deemed,
provided it has complied in all other respects with this Clause
12.2, to have achieved a Valid Tender of Delivery
12.3 The Owner shall take possession of the Vessel immediately
upon Delivery and, except as otherwise mutually agreed in writing
in advance, remove the Vessel within seven (7) days of Delivery
from the Builder's Yard. If Owner fails to remove the Vessel
within seven (7) days, Owner shall reimburse Builder for any
actual and direct costs incurred by Builder as a result of such
failure to remove after seven (7) days.
12.4 Upon Delivery of the Vessel, the following shall occur:
12.4. 1If Delivery occurs on or before fifteen (15) days
prior to the Contract Delivery Date, Owner shall pay to
Builder the sum of United States Dollars Three Million (USD
$3,000,000) as a bonus for early delivery;
12.4.2 If Delivery occurs between the period of fourteen
(14) days prior to Contract Delivery Date and fifteen (15)
days after Contract Delivery Date, the bonus referred to in
Section 12.5.1, above, shall be reduced by the sum of United
States Dollars One Hundred Thousand (USD $100,000) per day
such that no bonus may be earned by the Builder after the
expiry of such thirty (30) days.
12.4.3 There shall be a grace period of fifteen (15) days
from the sixteenth (16th) through the thirtieth (30th) day
after the Contract Delivery Date where no bonus may be
earned by the Builder and no liquidated damages shall become
due and payable to the Owner.
12.4.4 If Delivery occurs on or after the thirty-first
day after the Contract Delivery Date, Builder shall pay to
the Owner as liquidated damages, but not as a penalty, the
sum of United States Dollars Fifty Thousand (USD $50,000)
per day for a period not to exceed thirty (30) days.
12.4.5 If Delivery occurs on or after the sixty-first
(61st) day after the Contract Delivery Date, Builder shall
pay to Owner as liquidated damages, but not as a penalty,
the sum of United States Dollars One Hundred Thousand (USD
$100,000) per day for a period not to exceed thirty (30)
days.
12.4.6 If Delivery has not occurred within the period of
ninety (90) days after the Contract Delivery Date, no
further or other liquidated damages shall be payable by
Builder and Builder's liability to pay liquidated damages
under this Clause 12.5 shall be limited to the aggregate
amount of United States Dollars, Four Million Five Hundred
Thousand (USD $4,500,000), payable under clauses 12.4.4 and
12.4.5 the liquidated damages payable thereunder being, for
the avoidance of doubt, cumulative. In this event, Owner
shall be entitled to exercise the rights and remedies
available to it under Clause 15.
12.5 If any items on the Vessel are incomplete when the Vessel is
otherwise ready for Delivery and the Owner and the Builder agree
that such items:
(i) do not materially affect the operation of the Vessel;
and
(ii) are not likely to cause damage or deterioration; and
(iii)do not constitute such a number that whilst not
individually giving rise to such material effect, nor
likely to cause damage or deterioration, are in
aggregate material to the condition of the Vessel,
then the Owner will take Delivery of the Vessel. Owner shall in
any event have such items completed in a manner to be mutually
agreed upon between the Builder and the Owner. Dispatch to the
Vessel by sea freight, or if practicable by air freight in the
case of emergency, of items completed and/or received at the
Builder's Yard subsequent to departure of the Vessel therefrom
shall be at the expense of the Builder excepting items of Owner
Furnished Equipment the cost of dispatch of which shall be at
the expense of the Owner.
CLAUSE 13 - FORCE MAJEURE
13.1 A Force Majeure occurrence shall mean any of the following
occurrences beyond the control and without the fault or
negligence of the party affected and which by the exercise of
reasonable diligence the said party is unable to prevent or
provide against and which delays the construction of the Vessel:
13.1.1 Act of God, fire, inclement weather of abnormal
severity and/or duration;
13.1.2 war (whether declared or not), riots,
insurrections or malicious damage;
13.1.3 damage to Vessel which constitutes a partial loss
and is repaired from the proceeds of insurance under the
provisions of Clauses 10.5 and 10.6.1;
13.1.4 requisition order, control, direction,
intervention or requirement by or of any Government or body
acting under the authority of any Government;
13.1.5 cessation, curtailment or interruption of fuel,
power, gas, water or any other essential services; and
13.1.6 except where due to the fault or negligence of the
Builder or its Subcontractors or Suppliers, any delay in or short
delivery of, or defects in materials machinery services or
equipment for the Vessel (provided that the Builder demonstrates
that they are critical to construction of the Vessel at the time
of delay and that they were ordered in due time);
PROVIDED HOWEVER THAT the Builder shall not be entitled to rely
upon any of the causes of delay listed in Clause 13.1 unless the
Builder has taken all reasonable steps to mitigate their effect
upon the construction of the Vessel.
13.2 The Builder shall, within two (2) days of becoming aware
that the occurrence of any event of the nature specified above
is likely to cause delay, Notify the Owner in writing thereof.
The Builder shall also advise the Owner in writing after any such
occurrence of which Notice was given in accordance with the
provisions of this Clause ceases within two (2) days of such
cessation and shall then provide the Owner with the Builder's
best estimate of the likely period of delay resulting therefrom.
Failure of the Builder to provide due Notice as provided for in
this Contract shall be deemed a waiver of Builder's right to
claim Force Majeure.
13.3 A delay to the Contract Delivery Date caused by Force
Majeure shall constitute Permissible Delay and issues as to (i)
whether an event constitutes Force Majeure and (ii) the extent of
any delay due to Force Majeure, shall be documented, agreed
and/or resolved in accordance with Clause 6. The revised
Contract Delivery Date resulting from Permissible Delays due to
Force Majeure causes shall be established by extending the
Contract Delivery Date by one day for each day of Force Majeure
calculated after making full provision for concurrent delays and
mitigation by the Builder.
13.4 In the event of a period of Force Majeure lasting more than
forty-five (45) consecutive days, or period or periods thereof of
more than sixty (60) days in the aggregate, the Owner shall be
entitled to exercise the rights afforded to it under Clause 15.2.
CLAUSE 14 - DEFAULT OF THE OWNER
14.1 The Owner shall be in default and this Contract may be
cancelled by the Builder by Notice in writing to the Owner if:
14.1.1 the Owner fails to pay any installment of the
Contract Price within seven (7) days of its
becoming due and payable in accordance with Clause
8; or
14.1.2 the Owner without due cause fails to pay all sums
due on delivery within three days of a Valid
Tender of Delivery.
Notice of cancellation by the Builder under this Clause shall be
given by facsimile and confirmed in writing and shall (unless
the Owner shall have then remedied the default) be effective
fourteen (14) days after receipt thereof by the Owner whereupon
the Builder shall be entitled to exercise the rights provided for
in Clauses 14.2 and 14.3 and in which event title to the Vessel
shall forthwith revest in the Builder, provided that the Builder
shall not be entitled to exercise such rights in respect of any
amount in dispute, where that dispute has been referred to the
Senior Representative of the Classification Society, to the
Appeals Board, or to arbitration or Court proceedings.
14.2 The Builder shall be entitled to cancel this Contract
forthwith by notice given by facsimile and confirmed in writing
upon an order being made or an effective resolution being passed
for the winding up of the Owner (otherwise than a members
voluntary winding up for the purpose of amalgamation or
reconstruction) or a receiver or administrator being appointed of
the whole or any part of the undertaking of the Owner.
14.3 If the Builder shall cancel this Contract under Clause 14.1
or 14.2 the Builder shall be entitled (in addition to interest
as provided in Clause 8.7) to the proved loss resulting from the
Owner's default. The Builder shall sell the Vessel by public
auction or tender or private sale at its discretion and shall
apply the proceeds of sale (after deducting the expenses of sale
including the cost of completing the Vessel for sale) together
with any installments of the Contract Price paid under Clause 8
as follows:
14.3.1 in satisfaction of the balance due to the Builder
under this Contract.
14.3.2the balance, if any, shall belong to the Owner.
14.4 If the proceeds of the sale of the Vessel when added to the
installments received prior to cancellation are less than the
aggregate of the Contract Price and the expenses of resale, the
deficiency shall be paid by Owner to Builder and if not so paid
shall be recoverable by action against Owner.
14.5 However, notwithstanding any of the foregoing, the Builder
shall not be entitled to exercise its rights under this Clause if
the Owner has already commenced the exercise of its rights
pursuant to Clause 15.
CLAUSE 15 - DEFAULT OF THE BUILDER
15.1 Upon the occurrence of any of the following events the
Builder shall be in default:
15.1.1 the Vessel becomes a total loss in accordance with
Clause 10.4; or
15.1.2 the Vessel is requisitioned by the British
Government; or
15.1.3 the Builder without just cause refuses to proceed
with the construction of the Vessel; or
15.1.4 an order is made or an effective resolution is
passed for the winding up of the Builder
(otherwise than a members' voluntary winding up
for the purpose of amalgamation or reconstruction)
or a receiver or administrator is appointed of the
whole or any part of the undertaking of the
Builder; or
15.1.5 If at any time during this Contract, following
receipt of request to do so from Owner, the
Builder, utilising the Primavera level 3 critical
path project schedule, is unable to demonstrate to
the Owner's satisfaction that it has sufficient
additional capacity, including sub-contracted
labor, and/or materials, and/or has developed a
recovery plan that would enable him to deliver the
Vessel within ninety (90) days following the
Contract Delivery Date and that the Builder is
implementing such plan and/or utilizing such
additional capacity and exercising all necessary
due diligence to achieve Delivery within such
period.
15.2 In circumstances of Builder's default as described in Clause
15.1 or in the circumstances set out in Clauses 12.4.6 or 13.4,
the Owner, without prejudice to its rights under the Parent
Company Guarantee, shall be entitled by Notice to the Builder
EITHER:
(i) to cancel this Contract in which event Builder shall
forthwith refund to the Owner (a) the aggregate amount
of all sums paid pursuant to Clause 8, (b) any amount
reasonably and properly paid by Owner to any Owner
Subcontractors and (c) any and all amounts reasonably
and properly paid by Owner for Owner Furnished
Equipment which has been incorporated in the Vessel,
all together with interest thereon at the rate of two
(2%) percent over one-month LIBOR from time to time for
the particular currency, calculated in each case from
the date of payment by Owner to the date such refund is
made.
However, the proceeds of any insurance claim previously
received by Owner shall be deducted from the amount to
be refunded under this sub-clause (i). Upon such
refund as aforesaid being made in full, all the
obligations, duties and liabilities of each of the
parties hereto to the other under this Contract shall
forthwith be completely discharged and title to the
Vessel shall be vested in Builder; OR
(ii) to take possession of the Vessel in its unfinished
state and complete the Vessel in accordance with this
Contract and the Specifications either at the Builder's
Yard or elsewhere, at Owner's sole option. In the event
that Owner decides to complete the Vessel at Builder's
Yard, Owner and its agents or Owner Subcontractors
shall be entitled to use Builder's Yard, buildings,
plant, machinery, tools and implements and all
materials appropriated to or ordered for the Vessel and
shall not be liable for breakage or damage thereto. In
this case, in the event that the cost of completing the
Vessel is more than the amount of the outstanding
installments, Builder shall pay to Owner on demand an
amount equal to the amount of such excess from the time
of demand with interest thereon at two (2) % per cent
over one month LIBOR from time to time for the
particular currency calculated from the date of demand
until the date of refund.
15.3 In the circumstances set out in Clause 15.2:
(i) Owner shall be entitled, in the event that it elects to
cancel this Contract pursuant to Clause 15.2(i) above,
and no refund is made in full by Builder within five
(5) days of receipt of Notice of such cancellation, to
make demand under the Letter of Credit and/or the
Parent Company Guarantee, in Owner's sole option; and
(ii) Owner shall be entitled, in the event that it elects to
take possession pursuant to Clause 15.2(ii), then or at
any time thereafter to make demand under the Letter of
Credit for the full amount thereof and to utilise the
same for the purposes of completing the Vessel (in
accordance with the terms of this Contract and the
Specifications) and shall account to Builder for any
unutilised amounts following such completion, and/or to
make demand under the Parent Company Guarantee and to
utilise all sums from time to time received thereunder
for the purposes of completing the Vessel (in
accordance with the terms of this Contract and the
Specifications).
15.4 Subject always to the provisions of Clause 15.2(ii), 15.3
and 15.5, in the event of the cancellation, rescission or
termination of this Contract by the Owner, the property in the
Vessel and all its materials, machinery and equipment shall,
following receipt by the Owner of the full amount of all
installments paid up to the date of such cancellation, rescission
or termination of the Contract and all other amounts payable by
the Builder to the Owner hereunder, be transferred to and vest in
the Builder.
15.5 In the event that the Owner elects to take possession of the
Vessel pursuant to Clause 15.2(ii), the Builder shall assign (or
procure the assignment of) the Subcontracts, Supplier contracts
and/or any rights arising thereunder to the Owner and shall do
and execute such assurances, acts and documentation required or
desirable for vesting the Subcontracts and/or any rights arising
thereunder in the Owner.
15.6 All items of Owner's Furnished Equipment not incorporated in
the Vessel shall be made available to Owner.
15.7 In the event that Owner elects to take possession of the
Vessel pursuant to Clause 15.2(ii), any sums due from Builder to
Owner by way of liquidated damages already incurred at the date
of Notice shall be set off against any remaining installments due
from Owner to Builder.
15.8 Notice of cancellation by the Owner under Clause 15.2 as a
result of Builder's default with 15.1.2, 15.1.3, or 15.1.5 shall
be given by xxxxxxxxx confirmed in writing and shall be effective
fourteen (14) days after receipt by the Builder unless the
Builder shall have demonstrated that it can speedily remedy the
default, and is exercising the necessary due diligence to do so.
Any other Notice of cancellation under 15.2 shall be effective
forthwith upon service.
15.9 TERMINATION BY OWNER WITHOUT CAUSE. Notwithstanding any
other provision herein contained Owner may, at its sole
discretion and without cause, terminate the Contract at any time
by giving written notice to Builder.
15.9.1 If Owner should elect to terminate the Contract
pursuant to Clause 15.9:
15.9.1.1 Builder, unless the notice directs otherwise,
shall cease performance of the work and shall
perform only such work as is necessary in order to
preserve and protect the permanent works, and
shall, if at Builder's Yard, store the same at
Owner's risk and expense, until such time as it is
removed from Builder's Yard.
15.9.1.2 The Builder shall deliver and transfer to the
Owner in accordance with the Owner's instructions
all materials, supplies and other items for which
Builder is entitled to receive reimbursement
according to the Contract, together with all
plans, drawings, specifications and other
documents which Owner is entitled to according to
the Contract.
15.9.1.3 Builder, shall, if requested by Owner, undertake
all reasonable endeavours to cancel any or all of
its outstanding orders or Subcontracts upon such
terms as may be approved by the Owner. When such
terms are not approved, or if Owner shall so
request, Builder shall assign such orders or
Subcontracts to Owner and take such actions as may
be necessary in order to secure for Owner the
rights of Builder therein.
15.9.2 In the event of termination by Owner in accordance
with this Clause 15.9, Owner shall pay to Builder
the following amounts in full and final settlement
of all amounts due under or in any way arising
from the amounts due under or in any way arising
from the Contract, less all amounts previously
paid:
15.9.2.1 an amount, by way of termination fee, which is six
percent (6%) of the amounts in Clauses 15.9.2.2
and 15.9.2.3, respectively and below, but is not
less than United States Dollars Five Million (US
$5,000,000);
15.9.2.2 an amount for the cost and expenses incurred by
the Builder for materials and equipment being in
conformity with the Contract and which are ordered
for incorporation into the Work, together with all
direct costs for work performed up to the date of
the notice of termination hereunder, inclusive of
overhead recovery;
15.9.2.3 an amount for all other documented costs which the
Builder is legally obliged to pay Subcontractors
or Suppliers, or in respect of liabilities or
costs which Builder has undertaken in good faith
in connection with the work; and
15.9.2.4 an amount for all costs, charges and expenses
directly attributable to the orderly close out of
the performance of the Work, such as the cost
incurred for personnel in order to satisfy the
requirements of law and labour agreements.
15.9.3 The Owner shall, within fourteen (14) days of
notice of termination, at its cost and expense,
remove the permanent works or any part thereof
from the Builder's Yard, but in no case any longer
than thirty (30) days. If any of Owner's property
remains in Builder's Yard longer than thirty (30)
days from the notice of termination under this
Clause 15.9, and Owner and Builder are unable to
mutually agree on the disposition of Owner's
property, then Builder may remove, at Owner's
expense, all remaining Owner's property which
obstructs Builder's activities within Builder's
Yard.
CLAUSE 16 - GUARANTEE
16.1 The Builder, for the whole of the Guarantee Period,
guarantees the Works against all defects which are due to
defective design (to the extent that Builder has responsibility
for such design pursuant to Clause 3), defective material, poor
workmanship and/or the Works not having been performed in
accordance with this Contract. The Guarantee Period shall be for
a period of twelve (12) months from Delivery of the Vessel
provided always that, in respect of any repairs or replacements
or such additional works as are referred to in Clause 16.6, the
Guarantee Period shall be twelve (12) months after completion of
such repairs, replacements and additional works. The Guarantee
Period shall not in any event exceed twenty four (24) months in
total from Delivery.
16.2 The Owner shall give Notice to the Builder confirmed in
writing within fourteen (14) days after discovery of any defect
by any supervisory personnel on board the Vessel for which a
claim is made under this Clause 16. The Owner's written Notice
shall include full details as to the nature of the defect and the
extent of the damage caused thereby. The Builder shall be freed
from all liability under this Clause 16 for any defects
discovered prior to the expiry of the Guarantee Period, unless
Notice thereof is given by the Owner not later than fourteen (14)
days after the expiry of the Guarantee Period. The Builder shall
have no liability in respect of defects discovered after the
expiry of the Guarantee Period.
16.3 Without prejudice to Clause 16.6, upon receipt of Notice
under Clause 16.2 the Builder shall be entitled to arrange for
inspection of the Vessel on its own behalf. The Owner shall make
available to the representatives of the Builder at such
inspection the Vessel's logbooks and any other relevant documents
and information and shall supply such certified copies of such
log books, documents and information as may reasonably be
requested by the Builder.
16.4 If Builder needs to travel to the Vessel in connection with
Clause 16, Owner shall provide transportation between shore base
and Vessel for Builder's personnel and equipment, to the extent
that Owner is able to obtain same without cost to Owner.
16.5 The Builder shall have no liability for errors, omissions
or defects in the Works arising from inaccuracy of data provided
by the Owner, or from a third party acting on behalf of the Owner
for the purposes of the Works, unless the Builder shall have
failed to use all reasonable endeavours to discover detectable
inaccuracies of said data.
16.6 The Builder shall remedy at its own expense any defect
arising during the Guarantee Period against which the Works are
guaranteed under this Contract and which is Notified by Owner to
Builder in accordance with Clause 16.2, by making all necessary
repairs and replacements and by performing such additional works
as may be required to remedy such defect (including without
prejudice to the foregoing generality the provision of such
personnel as the parties may agree). Further, if the Owner deems
that it would be inconvenient to bring the Vessel back to the
Builder's Yard, Owner shall have the right to complete repair
work at other shipyards and Builder shall pay to Owner the actual
cost to Owner of the repairs. Builder shall have the right to
be consulted prior to the commencement of such repair work by
another party, as to its extent and cost, provided that Owner
shall be entitled following notification and consultation to
effect such repairs by such other party whether or not the same
are agreed by Builder. If the repairs are carried out by a third
party, the Builder shall pay the cost of such repairs, but
Builder shall not be liable for the efficacy of the same.
16.7 The Builder shall obtain guarantees of not less than
twelve (12) months from Delivery or such longer period as Builder
is able to obtain at no extra cost from its Subcontractors or
Suppliers.
16.8 The Builder shall hold the benefit of all warranties,
guarantees, liquidated damages clauses and other rights and
remedies under contracts entered into with Subcontractors and
Suppliers in trust for and in accordance with the Owner's
instructions, and at the Owner's cost. At the end of the
Guarantee Period the Builder shall assign to the Owner the
benefit of any remaining Subcontractors' or Suppliers'
guarantee(s), or warranties.
16.9 The guarantees and remedies contained in this Clause 16
concerning the defects which are covered by this Clause 16 are
the sole and exclusive guarantees and remedies in favor of the
Owner concerning such matters. All guarantees and remedies
concerning such matters which would otherwise be implied by law
(whether under the Sale of Goods Act or otherwise) and all
remedies in tort, (including but not limited to negligence), are
expressly excluded. For the avoidance of doubt, this Xxxxxx has
no application to warranties concerning title or intellectual
property rights.
16.10 The Builder warrants that the Works will be delivered
to the Owner free and clear of any liens, charges, claims,
mortgages, or other encumbrances of whatever nature upon the
Owner's title thereto, and in particular, that the Works will be
absolutely free of all burdens in the nature of imposts, taxes or
charges and the Builder shall indemnify the Owner in respect of
any liability arising as a consequence of the Builder's breach of
this sub-clause.
16.11 The Builder's guarantee does not extend to loss or
damage or expense to the extent arising from wear and tear,
perils of the sea, accident, negligence or misuse on the part of
the Owner or any third party.
16.12 The Builder has the right to appoint or nominate on
Delivery of the Vessel upon terms and conditions to be agreed a
competent guarantee engineer acceptable to the Owner to sail with
the Vessel as guarantee engineer during the whole or any part of
the Guarantee Period and, if the Owner has reason to be
dissatisfied with the guarantee engineer so appointed, shall from
time to time replace him by another competent guarantee engineer
free of cost to the Owner. The wages and expenses and
repatriation expenses of the guarantee engineer shall be paid by
the Builder . The Owner and its employees shall give such
guarantee engineer full co-operation in carrying out his duties
as the Builder's representative on board the Vessel.
16.13 Notwithstanding the foregoing the Builder's Guarantee
under this Clause 16 shall be limited to the terms of guarantees
provided to the Builder by its Subcontractors or Suppliers in the
case, where the Owner has specifically negotiated the
sub-contract or purchase order in question or where the Owner has
specifically requested a Subcontractor or Supplier not on the
Subcontractor's List or the Maker's List.
CLAUSE 17 - INDEMNITIES FOR INFORMATION SUPPLIED
17.1 The Builder shall indemnify the Owner from and against all
claims of third parties arising by reason of the use by Owner or
Owner Subcontractor or Owner Supplier of any information supplied
to Owner, Owner Subcontractors or Owner Suppliers by Builder in
connection with the performance of the Works, and from all costs
and expenses (including costs and expenses of litigation)
incurred by Owner by reason of such claim, except for claims or
liabilities arising in connection with any matter to which Clause
17.2 applies.
17.2 The Owner shall indemnify the Builder from and against all
claims of third parties arising by reason of the use by the
Builder of the Specifications and of any document or information
supplied to the Builder or its Subcontractors by the Owner, Owner
Subcontractors or Owner Suppliers in connection with the design,
construction and the building of the Vessel or the construction
or installation of the machinery or equipment thereof or the
provision of Owners Furnished Equipment and from all costs and
expense (including costs and expenses of litigation) incurred by
the Builder by reason of any such claim.
CLAUSE 18 - TAXES AND DUTIES, ETC
18.1 The Builder shall bear any taxes and duties applicable to
materials or equipment supplied by the Builder, its
Subcontractors or Suppliers.
18.2 The Owner shall bear any taxes and duties applicable to
materials or equipment supplied by the Owner, Owner
Subcontractors and Suppliers.
18.3 The Owner shall bear all other taxes, duties, commissions,
fees and expenses incurred in connection with this Contract,
including those incurred in arranging finance, mortgage
facilities and registration formalities.
CLAUSE 19 - HEALTH AND SAFETY ENVIRONMENT AND EMPLOYMENT
19.1 The Builder and Owner shall and shall cause their respective
Subcontractors and Suppliers while at the Builders Yard to
observe and comply with the Health and Safety provisions of
Schedule Fourteen hereto.
19.2 In all circumstances compliance with local legislative
requirements and/or obligations shall take precedence over the
requirements of Schedule Fourteen hereto.
19.3 The Builder and Owner and their respective Subcontractors
shall comply with all laws, rules and regulations of Government
having jurisdiction over the area in which the Works are
undertaken to the extent that they are now, or may become
applicable to them during the performance of this Contract.
CLAUSE 20 - LAW AND ARBITRATION
20.1 This Contract shall be governed by and construed in
accordance with the Law of England.
20.2 Any dispute or difference touching or concerning this
Contract or arising thereof, other than disputes to be referred
to an expert by the provisions of this Contract shall be referred
to the arbitration in London (or such other place as may be
agreed between the parties) of a single arbitrator to be
appointed by agreement between the parties or, (failing agreement
within 14 days after either party has given to the other a
written request to concur in the appointment of a single
arbitrator) of three arbitrators, one to be appointed by each
party and an umpire chosen by the two arbitrators so appointed.
Any such reference shall be a submission to arbitration in
accordance with the Arbitration Act 1996 or any statutory
variation, modification or re-enactment thereof for the time
being in force.
CLAUSE 21 - ASSIGNMENT OF CONTRACT
Except by the Owner to the ultimate parent company of Owner or an
associated company of the Owner, neither of the parties hereto
shall be entitled to assign or transfer any of its rights or
duties hereunder without prior Notice to, and the prior written
consent of, the other who shall not unreasonably withhold such
consent. PROVIDED THAT in the event of an assignment, except to
the ultimate parent company of Owner, Owner shall remain
responsible for and guarantee the performance and observance of
the assigned obligations by any such associated company. For the
purposes of this Clause associated "company" means and includes
any holding company, whether direct or indirect, or any
subsidiary, whether direct or indirect, of the Owner or of such
holding company, "holding company" and "subsidiary" having the
meanings assigned to these terms by Section 736 of the Companies
Act 1985.Any assignment permitted under this Clause shall be at
the cost of the Assignor.
CLAUSE 22 - NOTICES AND COMMUNICATIONS
22.1 Any Notice or Notification to be given hereunder to the
Owner shall be delivered to the Owner's Project Manager on site
at the Builder's Yard and :
Global Marine International Services Corporation c/o
McKinney, Xxxxxxxx & Xxxxxx
Xxxxxx House, 0 Xxxxxx Xxxxxx
P.O. Box N. 3937
Nassau, Bahamas
Attention:President
With copies to:
Global Marine International Services Corporation c/o
Global Marine UK Limited
Standbrook House, 0/0 Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X 0XX
Attention:F. L. Xxxxxxxx, Vice President
and
Global Marine Drilling Company
000 X. Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention:Xxxx X. Xxxxxxx, Manager Construction and
Marine Projects Facsimile Number:
000-000-0000
or such other person, address or facsimile number as the Owner
may from time to time by notice in writing to the Builder
designate for that purposes.
22.2 Any notice to be given hereunder to the Builder shall be
addressed to,
The Project Manager
Ship No: 1739
Xxxxxxx and Xxxxx Shipbuilding and Heavy Industries Limited
Queen's Island
BELFAST
BT3 9DU
Northern Ireland
Facsimile:01232-458515
or such other person, address or facsimile number as the Builder
may from time to time by notice in writing to the Owner designate
for that purpose.
22.3 Any Notice or other document to be given or served hereunder
may be delivered by hand or sent by facsimile or posted by
first-class mail (for inland mail) or airmail (for overseas mail)
prepaid post, addressed to the address or facsimile number of the
respective party as given in Clause 22.1 and 22.2. Any such
Notices or documents sent by post in the manner specified above
shall be deemed served two (for inland mail) or seven (for
overseas mail) business days after posting. Where a Notice or
document is transmitted by facsimile the document shall be deemed
served when transmitted by the sending party.
CLAUSE 23 - WAIVER
Any waiver by or neglect or forbearance by either party to
require or enforce any of the provisions of this Contract at any
time given by either party shall not prejudice or affect any
right of that party afterwards, with regard to any other failure
to comply with the provisions of this Contract whether or not of
a similar nature, to act strictly in accordance with the
provisions herein contained.
CLAUSE 24 - ENTIRE CONTRACT AND AMENDMENTS
This Contract constitutes the entire agreement of the Builder and
the Owner in relation to the construction and purchase of the
Vessel and neither any representation, warranty or statement made
by or on behalf of the Builder or the Owner prior to the date
hereof shall affect the terms of this Contract or the rights or
duties of the Builder or the Owner hereunder nor shall any
modification of the terms of this Contract be of any effect
unless made in writing and signed by the Owner and the Builder or
their respective Authorized Representatives or Project Managers
(in case of Project Change Orders).
CLAUSE 25 - LIABILITY AND INDEMNIFICATION
25.1 As used in Clauses 25 and 26 of this Contract:
(a)"Owner Group" means the following persons and entities,
individually and collectively:
(i) Owner, its Parent, subsidiary, affiliated, associated
Companies;
(ii) Owner Subcontractors and Owner Suppliers and other
parties contracting with Owner (excepting Builder and
Builder's Subcontractors);
(iii)The respective Officers, Directors, Employees, Agents,
Owners, Shareholders, Servants, Representatives and
Insurers of each of the parties set forth in Clauses
25.1 (a) (i) and 25.1 (a) (ii).
(b) "Builder Group" means the following persons and entities,
individually and collectively:
(i) Builder, its Parent, Subsidiary, Affiliated, Associated
Companies;
(ii) Builder's Subcontractors, Suppliers and other parties
contracting with Builder (excepting Owner); and
(iii)The respective Officers, Directors, Employees, Agents,
Owners, Shareholders, Servants, Representatives and
Insurers of each of the parties set forth in Clauses
25.1 (b) (i) and 25.1 (b) (ii).
25.2 Builder shall at all times be responsible for and shall
release, protect, indemnify, defend (including payment of
reasonable attorney's fees and costs of litigation) and hold
Owner Group harmless from and against any and all costs, losses,
liabilities, claims, demands, causes of action, damages,
penalties, judgments and awards of every kind and character,
without limit and without regard to the cause or causes thereof
or the negligence or fault of any party or parties (including
without limitation the active, passive, concurrent or solely
negligent acts or omissions of any member of Owner Group) arising
in connection herewith:
(a) In favour of the officers, directors, employees, agents,
servants, representatives or invitees of Builder Group on
account of sickness, bodily injury or death; and/or
(b) On account of damage to or loss of Builder Group equipment
or property; and/or
(c) From pollution or contamination occurring prior to Delivery
(including without limitation the control and/or removal
thereof) which originates from Builder's Yard or equipment,
the equipment of Builder's Subcontractors or materials under
the control of Builder's Subcontractors, including but not
limited to fuels, lubricants, motor oils, pipe dope, paints,
solvents, garbage or debris.
(d) From the storage, transportation and/or disposal of any and
all waste generated during the performance of the Work by
Builder or Builder Group.
25.3 Owner shall at all times be responsible for and shall
release, protect, indemnify, defend (including payment of
reasonable attorney's fees and costs of litigation) and hold
Builder Group harmless from and against any and all costs,
losses, liabilities, claims, demands, causes of action, damages,
judgments and of every kind and character, without limit and
without regard to the cause or causes thereof or the negligence
or fault of any party or parties (including without limitation
the active, passive, concurrent or solely negligent acts or
omissions of any member of Builder Group) arising in connection
herewith:
(a) In favor of the officers, directors, employees, agents,
servants, representatives or invitees of Owner Group on
account of sickness, bodily injury or death; and/or
(b) On account of damage to or loss of the equipment and/or
property of Owner Group, save for the Vessel and OFE in
relation to which the other provisions of this Contract
shall apply; and/or
(c) From pollution or contamination arising from the Vessel
following Delivery.
25.4 Notwithstanding anything to the contrary, expressed or
implied, in this Contract, inclusive of any amendments or Project
Change Orders, in tort or otherwise at law, neither party shall
be liable to the other for special, indirect, or consequential
damages including, without limitation, loss of profits or
business interruptions resulting from or arising out of this
Contract or the performance of any work or services, however same
may be caused including the negligence or fault of any party or
parties and whether or not within the contemplation of the
parties before, after or on the date of signature of this
Contract.
25.5 Except as otherwise expressly limited in this Contract, it
is the express intention of the parties hereto that all indemnity
obligations and/or liabilities assumed by the parties under
articles 25.2, 25.3 and 25.4 shall be without limit and without
regard to the cause or causes thereof, including, but not limited
to, preexisting conditions, whether such conditions be patent or
latent; the unseaworthiness of any vessel or vessels, whether or
not the preexisting breach of representation or warranty (express
or implied); strict liability and/or ruin or defective premises,
equipment, facilities, or appurtenances of any party under any
code law or other type of strict liability, whether or not
preexisting, and/or is latent, patent or otherwise; breach of
contract; tort, breach of duty (statutory, contractual, common
law or otherwise) or the negligence or fault of any party or
parties, including, but not limited to, that of the indemnified
parties, whether such be sole, joint or concurrent, active or
passive; or any other theory of legal liability.
25.6 It is the express intention of the parties hereto that the
provisions of this Contract shall exclusively govern the
allocation of risks and liabilities of said parties, it being
acknowledged that the agreement reflected herein has been based
upon such express understanding.
25.7 All persons or entities who are or who may become a person
or entity designated in Clause 25.1 (a) and (b), other than Owner
and Builder, shall be deemed to be third party beneficiaries of
this Contract for the purposes solely of enforcing an indemnity
expressed to be for their benefit.
25.8 The indemnifications set forth in this Contract shall apply
to all types of liabilities specifically covered by the
indemnifications whether such liabilities are incurred directly
by the indemnitees or indirectly through the operation of an
indemnification agreement with another party provided that the
liability for which such indemnification is sought, arose from or
occurred as the result of or incidental to the performance of the
parties' obligations hereunder.
CLAUSE 26 - BENEFIT OF INDEMNITIES
26.1 The indemnities given by Builder to Owner or Owner Group
under Clause 25 are hereby agreed to be extended to and for the
benefit of Owner Group as defined in Clause 25.1(a).
26.2 The indemnities given by Owner to Builder or Builder Group
under Clause 25 are hereby agreed to be extended to and for the
benefit of Builder Group as defined in Clause 25.1(b).
26.3 Owner hereby agrees to the appointment of Builder as its
agent and trustee solely for the giving and receiving of the
indemnities specified in Clause 25.3, which agency is solely for
the purpose of permitting the indemnified party to make its claim
against the indemnifying party and all duties, liabilities and
obligations which would otherwise be imposed on or incurred by
Owner by virtue of the agency are expressly excluded.
26.4 Builder hereby agrees to the appointment of Owner as its
agent and trustee solely for the giving and receiving of the
indemnities specified in Clause 25.2, which agency is solely for
the purpose of permitting the indemnified party to make its claim
against the indemnifying party and all duties, liabilities and
obligations which would otherwise be imposed on or incurred by
Builder by virtue of the agency are expressly excluded.
IN WITNESS WHEREOF, this Contract has been executed by duly
authorized representatives of the Parties hereto in duplicate
originals effective as of the date and year first above written.
GLOBAL MARINE INTERNATIONAL SERVICES XXXXXXX AND XXXXX SHIPBUILDING D
CORPORATION AND HEAVY INDUSTRIES LIMITED
By: /s/Xxxx X. Xxxxxxx By: /s/ Xxx X. Xxxxxxx
Xxxx X. Xxxxxxx Per X. Xxxxxxx
Attorney-in-Fact Chief Executive Officer
