XXXXXXX AND XXXXX SHIPBUILDING
AND HEAVY INDUSTRIES LIMITED
and
GLOBAL MARINE INTERNATIONAL SERVICES CORPORATION
SHIPBUILDING CONTRACT
relating to
Hull No: 1740
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
XXXXX 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 28th day of March, 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 February Two Thousand 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 Forty Million (US$40,000,000) 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 the Fourth Schedule 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 NOT USED
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.1740 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.1740 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 the Fifteenth Schedule
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
4.1The 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 the Twelfth Schedule hereto, differs from the estimated steel
weights set out at Twelfth Schedule 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 the Thirteenth Schedule 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 1740 shall be United States Dollars
Two Hundred and Sixty Million, Seven Hundred Fifty Nine Thousand, Two Hundred
Thirty Four (US$260,759,234) comprised as follows:
A United States Dollars One Hundred and Fifty Three Million,
Eight Hundred Fifty Nine Thousand, Two Hundred Thirty Four
(US$153,859,234) (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 July 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
January 1, 1999;
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 August 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 February 10, 2000.
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; and
(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:
12.4.1 If 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 fifteen (15) days.
12.4.5 If Delivery occurs on or after the forty-sixth 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 Seventy Five Thousand (USD $75,000) per day for a
period not to exceed fifteen (15) days.
12.4.6 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.
12.4.7 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, Eight Hundred Seventy Five Hundred Thousand
(USD $4,875,000), payable under clauses 12.4.4, 12.4.5, and 12.4.6,
respectively, 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;
(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.
14.3.2 the 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 alwaysthat, 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 orsuch 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
Xxxxxx 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 LimitedStandbrook 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: 1740
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.
22.4 Except as may be required by applicable law, the Parties agree that
no public disclosures and/or press releases regarding the announcement of
this Contract shall be made without first obtaining the written consent
of the other.
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/ X. Xxxx Xxxxxxxx By: /s/ Xxx X. Xxxxxxx
F. L. Xxxxxxxx Per X. Xxxxxxx
Vice President Chief Executive
Officer
