Useful Expression

Useful Expression
for
Better Business Letter
Daewoo Heavy Industries Co. Ltd

(Shipbuilding & Plant Division)
Index
A. Instruction Message
No.
1
2
3
4
5
6
7
8
9
10
Subject
Page
Normal instruction
............................. 8
Instruction of Agreement, Comfirmation
............................. 9
Enclosure
........................... 10
Notice, Information, Request
...................... ..... 11
Notice,Information,Request with Regret, Complaint ........................... 13
Quotation, Proposal, Invoicing
........................... 16
Acceptance of proposal or Quotation
........................... 17
Objection to Proposal or Quotation
........................... 18
Alternative, Counter Proposal, Comments
............................ 20
Apologizing
........................... 22
B. Message Text
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Subject
Page
Simple Notice of Fact

..................... 23
Advise Ones Position or Information
.................... 25
Suggestion and Proposal
..................... 27
Request Ones Action or Information
.................... 29
Notice of Rejection and Complaints
........... ......... 31
Itinerary
................... 31
Enclosure or Following
................... 33
Reject the Request or Request Written Confirmation
.................. 34
Request or suBmission of Change Oder Quotation
.................... 35
Request for Reconsideration & Additional Explanation
................. 37
Quotation Validity, Completion Date
.................. 40
Change Order Rejected
.................. 41
Delivery Schedule
.................. 42
Delay in Delivery
................... 43
Invoicing
.................. 45
Quotation
................... 46
Negotiation after Quotation
................... 47
Benefits & Important Factors
................... 48
Explanation of Wordings
................... 49
Responsibility
.................... 53
Payment
................... 55
Confirmation
................... 57
C. Closing Message
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
Subject
Page
Request Change Order Quotation

............ 58
Change Order Accepted or Rejected
............ 58
Pending Decision or Something
............ 59
Information & Notice
............. 60
Request Action or Information
............ 62
Suggestion and Proposal
............ 63
Inform Further Action, Keep One Advised
............ 66
Request Confirmation, Concurrence, Comment, Signature ........... 67
If Clauses
........... 69
Prompt Action or Acknowledgment Required
........... 70
Request Understanding or Apologizing
............ 72
Complimentary Closing
........... 74
Express Interest
............ 75
D. Model Letters for Contract Management Dept.

No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Subject
Page
Chemical Tanker Pitting of Cargo Tank

.............................. 76
Center Tank Repai
............................. 77
Chemical Tankers
.............................. 77
Permissible Delay due to Hair Crack
.............................. 78
Engineering Change Order
............................. 78
Engineering Work
.............................. 79
Notice of Force Majeure
................. ............. 79
Lloyds Agreement
.............................. 80
Rig 135 Reaving
.............................. 80
Change order Request
.............................. 81
Santa Fe Rig 315/140
.............................. 81
Compensation for Delay for Santa Fe Rigs
............................... 82
Rigs 135/140 Painting Specification
............................... 83
Delivery Delay of Santa Fe Rig 135
...................... ........ 84
Rig 135/140
................................ 85
Abnormal Weather Conditions
.................................. 85
To Whom It May Be Concerned
.............................. 86
Delivery Dates for U.S.Lines Vessels
............................. 86
Vendor Service Engineers
.............................. 87
Snow Ball Effect
.............................. 87
Outstanding Equipment for Santa Fe Rig 135
............................. 89
Owner Furnished Equipment
.............................. 89
Option of Contract
.............................. 89
3
No.
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
Subject
Page
Amendment of Contract
Side Letter Agreement
Shuttle Tanker Delivery
Ugland Shuttle Tanker Delivery
Remainder Notice
Correspondence Identification
Labour Disputes 1
Labour Disputes 2
Labour Disputes 3
Labour Disputes 4
Labour Disputes 5
Labour Disputes 6
Labour Disputes 7
Labour Disputes 8
Labour Disputes 9
Labour Disputes 10 without prejudice
Labour Disputes 11
Additional Butt Joints 1
Additional Butt Joints 2
Noise Level in E/R Store 1
Agreement for Buyers Supplies
H.1029 Grounding Damage 1
Regal Opinion
H.1029
Electric Cable Test 1
Electric Cable Test 2
Change order Quotation 1
Change order Quotation 2
Request Action
E/R Block Division
Notice for Tender of H.1029 1
Noise level in E/R Store 5
.............................. 90
............................... 90
............................... 91
................................ 91
............................... 92
............................... 92
............................... 93
............................... 94
............................... 94
............................... 95
............................... 96
............................... 96
............................... 97
............................... 98
............................... 99
............................. 100
.............................. 101
............................... 103
............................... 104
............................... 104
............................... 105
............................... 106
............................... 106
............................... 107
............................... 108
................................ 110
.................................. 110
.............................. 111
.............................. 111
............................... 112
............................... 114
.............................. 115
.............................. 115
............................. 115
............................. 116
.............................. 116
............................. 117
............................ 118
............................ 118
............................ 119
............................ 119
........................... 120
Some Rule for Good Writing

1. Think first of the reader and address yourself to his interests.
Tell him all he wants to know and dont leave him to guess between the lines.
2. Adopt a tone suited to theoccasion and the purpose of the letter.
3. Write naturally, as you would talk, using plain and familiar works.
4. Write clearly and to the point, The dominant need in all business.
Writing is exactness expressed in language that is absolutely clear
5. Write courteously and make your letter sound friendly and sincere.
6. Avoid wordiness, but at the same time remember that it is more important to be clear and
courteous even if it means using more words.
7. Avoid commercial jargon with its round about and meaningless forms of expression
8. Write effectively by using simple language, by being consistent and precise.
9. Avoid monotony by introducing variety
10. Write to a plan if your letter is long or specially important.
11. Pay special attention to the opening and closing paragraphs first and last impression
leave a special mark on the reader.
12. Check your letter.
Check your letter

1.
2.
3.
4.
5.
6.
7.
8.
Is its appearance attractive ; is it well laid out?

Is it correctly splet and properly punctuated?
Does it cover all essential points and is the information given correct?
Is what I have said clear, concise and courteous?
Does it sound natural and sincere?
Does it adopt the readers view of point and will it is readily understood?
Is it general tone right and is it likely to create the impression intended?
Is it the kind of letter should like to receive if I was in the readers place?
Before you begin to write, ask yourself the following questions

1.
2.
3.
What is my aim in writing this letter?

What do I hope to achieve by it?
What is the best way to go about it?
Sequence
1.
2.
3.
Introduction or an acknowledgment ( Make a request )

Information, fact ( State the reasons )
The third refer to future action ( Suggest future actions )
Enquiries and Replies

1.
2.
3.
Begin with questions you want to ask ; your reader then knows at once what your inquiry
is about.
Put your request in the form of a question, not a statement. Dont say, I would like to
know in what shades you can supply stockings?. Say instead, In what shades can you
supply the stockings?
Keep your inquiry short and to the point. Say what need to be said and then stop.
A satisfactory quotation will be include the following;

1.
2.
3.
4.
An expression of thanks for the inquiry

Detail of prices, discount and terms of payment
A statement or clear indication of what the prices cover
An undertaking as to date of delivery
The letter of rejection

1.
2.
3.
4.
5.
Thanks the seller for his offer

Express regret at inability to accept
State reasons for non acceptance
Make a counter offer if, in the circumstance, it is appropriate
Suggest that there may be other opportunity to be business together
Element of the sales letter

1.
2.
3.
4.
Arouse interest
Create desire
Carry conviction
Include action
When the goods ordered cannot delivered immediately

1.
2.
3.
4.
Apologize for the delay

Explain the reasons
Hope that the customer is not being inconvenienced unduly
State when delivery may be expected, if this is possible
Apologizing letter
1.
2.
3.
4.
Apologize
Explain how the mistake occurred
Hope that the inconvenience caused is not serious
State that what action he is taking
6
Declining the order

1.
2.
3.
Regret your inability to meet the buyers need

Propose an alternative product, if one is available
Hope for the opportunity to serve him another time
Late payment
1.
2.
3.
4.
Refer to the account that cannot be paid immediately

Reget inability to pay, giving reasons
Suggest extension of period payment
Hope suggestion will be accepted
Put yourself in your readers shoes.

n
n
What would be my aim if I were to receive a letter of the kind I propose to write?
What do I want my letter to do.?
Keep your sentences short and avoid the over frequent use of such conjunction as, and, but,
however, consequently, and etc.
Deal promptly with all letters needing a reply. Answer them the day you receive them if you can.
If you cannot deal with a complaint promptly, acknowledge it at once. We are looking into it and
that you will send a full reply later.
INTRODUCTION
Normal Introduction
1.
2.
3.
4.
5.
6.
7.
8.
9.
We have received your letter of.....,

This is response to your letter of Feb. 16th concerning.......,
We refer to your letter AAA dated May 5, 1996.
We refer to your letter of 10th which responds to our letter of 9th June.
We refer to your letter of 16th Jan. regarding your abortive efforts on the above topic.
We refer to your letter of dated 11th May, 1996, to Mr. Eum, which should be self
explanatory. In this connection .......,
We are glad to receive your letter AAA dated June 3, 1996. In your letter, you inquire
about our new products.
We received with thanks both your quotation of July 7, 1996.
We thank you for your letter of.....,
10. We thanks you for your orders of 19th May and as it is your first with us would like to say
how pleased we were to receive it. When opening new accounts it is our practice to ask
customers for trade references.
11. I feel I must write to tell you how pleased we were to receive it.
12. We are obliged for your quotation of......., and should be glad if you accept our order for
the following goods: ( and enclose our official order for the following : )
13. we acknowledge with thanks your letter of yesterday asking us to cover you in the sum of
USD 2000.
14. We are replying to your letter of Feb. 20th asking us to extend the time for payment of the
amount due to our statement for 30th September.
15. First of all I would like to thanks you for the quick response to my letter of March 15.
Please insure that prompt action is taken on these items so as to resolve this matter while
Mr. Manley is here.
Introduction of Agreement or Confirmation

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
This letter will serve as acknowledgment of my receipt of the following documents.

Supplementing our September 6 telex, please note the following numbers for.....,
As per our verbal discussion of Sep. 7, this letter confirms your requirement that....,
This letter will confirm the discussions which were held this data regarding the subject
matter.
The purpose of this memorandum is to set forth guidelines for cooperation the
measurement of vessels.
This agreement shall be effective from and after the date on which the agreement is
executed and shall continue in forth until the completion of the drawings.
We set out below the terms discussed and agreed with your Mr. Manley, but before
drafting the formal agreement we should like to you confirm them.
We understand from the 18th March 1996 meeting with Santa Fe staff that a letter of
credit will be set up, similar to the existing L/C on R&B Project.
The following is a summary of the held on from Tuesday to Friday(15th - 18th March),
wherein the above list was discussed with Mr. Eum and Design Dept. persons.
Further to our letter of 15th May and following our discussion with Mr.Manley when he
called on the 19th, we was discussed to offer you an appointment as our sole agency on the
terms and conditions agreed with Mr. Manley.
The purpose of this letter is to supplement our referenced telex with some numerical data
which may provide guidance in the preparation of your speed power. In order to discuss
the data in a reasonable fashion, paragraph one address only the engine data against the
theoretical propeller service.
This change order No.1 contains the entire agreement and understanding Buyer and
Builder, regarding changes to our interpretation of the specifications and supersedes all
other prior negotiations, representations, undertakings, agreements, whether written or
oral, which include but not limited to Builders correspondence Ref.101 through 110 and
buyers Ref 201 through 220, as well as all telex exchanges up to the date of this Change
Order on any subject matters contained in the specification.
In recognition of actions taken and agreements reached with our N.K. office, pleased to
confirm that such delays as now exist on drawing approvals will be absorbed by Daewoo
at no cost to U. S. Lines although quite extraordinary efforts will be required of us.
In addition to asking you to pressurize ABS into making improvements, the circumstances
demand that we must asked you to give consideration to ......., We will also notice that
ABS has agreed to streamline procedure for future plan approval which should result in
even faster turn around and great control of the approval process.
Enclosure
1. Enclosure herewith please find one copy of each of the drawing for the subject change
orders which are being returned herewith approved.
2. We are enclosing enclosures 1 through 4 as guidance to allow Daewoo to fabricate two
sheet metal enclosures for the aforementioned subject.
3. As requested , we are sending with this letter our draft for the balance of USD 100.
4. Below as listed you will find a CRI list for electrical pertaining to SF Rig.
5. Pursuant to ref. A, your attention is invited to line 6.
6. Please find attached copy of the letter addressed to myself from Mr. Manley.
7. You are kindly advised as follows :
8. Enclosed we are sending you our invoice for the rug ordered on 5th January, 1996.
9. Referring to your advice of 30th March, we enclose one copy of our invoice.
10. We enclosure a current price list as requested in your letter of 18th May. You will find
particulars on page 12 of the catalogue.
11. Per Mr. Eums request, the following is being disclosed for your information. The present
12.
13.
14.
15.
16.
17.
and future activities at our side consist of :

We are forwarding herewith one copy each of enclosure to all addresses for their use and
implementation.
Enclosure is our the latest catalogue. Prices quoted are appropriate for merchandise
delivered to an address in the States, packing and shipping fees are included in
parentheses ( ) after each price. The focal points of this brochure are the resume and the
interview.
We hereby apply for shares to the value of USD 100 in Santa Fe at the offer price ruling
on the dealing day next following receipt of this application. We enclosure check for the
above amount payable to Santa Fe.
In reply to your inquiry of 4th June, I enclose a time table giving details of flights from
Seoul to Tokyo and also a price list in which you will find details of both ordinary and
excursion fares. As you will see from the list the latter can be as little as one third of the
normal first class fares.
It gives me pleasure to enclose our illustrated brochure. In it you will find full details of
the cruises about which you inquire in your letter of 10th March.
Thank for your letter of 15th May. As requested, I enclose a copy of our brochure in which
you will find full details of our charge. From the catalogue enclosed you will see that the
prices for these portables are very low.
10
Notice, Information, Request

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
As instructed in your letter of 28th May we are arranging to open a documentary credit
with our branch in Busan in labour of Santa Fe, valid until 30th May.
Based on the weekly fabrication status report from 3D shop and my judgement upon
actual inspection of work underway, progress to date is as follows :
As you are wares of, we are now in process of eliminating the AAA system from Rig 140
and converting to an H.P system.
We would like to express their genuine pleasure in working with you and your respective
companies. We want to thank-you for your kind cooperation, support and for the
opportunity to work with you. We have committed ourselves to endeavor to constantly
improve and give you our best efforts.
We take this opportunity with great pressure, and as a taken of our thanks, to invite you
to a dinner party on the 19th of May, 1996, from 19:00 to 21:00 in the lobby of the Okpo
Tourist Hotel.
We are pleased to notify you that keel laying of H.4001 has been completed at 11:00 on
Oct. 1986, in the presence of your representative Mr. Laird and concerned classification
society surveyor.
In followup to our previous letter, describing the preliminary requested work prior to
arrival of the tug boat, now we present this formal request for Daewoos assistance to load
and tie down the equipment.
In view of the fact that it is your intention to deliver your H.1000 to the owner on or 16
June 1996, we would like to take this opportunity to summarize the outstanding
correspondence in our hull letter files.
I am glad to say that by making a special effort we have been able to improve by a few
days on the delivery date agreed upon.
The position with the various items in this Fax highlight a general concern.
In keeping with the intent of the above referenced letter, I am pleased to submit an outline
of changes necessary to accommodate the wintrization of Rig 135.
We have agreed to send the owned by SF to Okpo which we believe will be of substantial
benefit to Daewoo.
As soon as I saw your advertisement in todays Times for a foreign correspondent I felt it
was just a kind of post for which I have the qualifications and for which I have been
looking for some time.
14. Since I was appointed as a member of your general office staff four years ago I had made
several requests for an increase salary, but without success. I have not previously either
held or applied for a passport of any description.
15. Please be advised of the following comments recently received from the UK concerning
certificate.
11
16. Subsequent to numerous arrangements, it has come to light that a single BCR will not
adequately house all of the equipment purchased by owner.
17. This is to inform you that the present phone number of the Embassy of USA(111-2222) is
no logger valid as from 31st January 1996. The new number read as follows : 111-3333.
18. This is inform you that we completed the proceeding test. It is getting a little late to start
this test now. We should have no problems if all went all, but if our previous experience is
anything to go by, this is unlikely. Our suggestion is that we start it first thing tomorrow .
19. We wish to notify you that Mr. Robert, who has been our manager, has now left our
service and therefore no longer has authority to take orders or to correct accounts on our
behalf.
20. As required by them we have included all charge in our invoice, which account to USD100.
21. I am write now to find out when you expected to complete the work and to ask you to
press forward with it without any further delay.
22. It will come to you as no surprise that our own costs have continued to rise with the
general trend. You are requested to insure that the installation of 2 JP tanks is
incorporated into the design and construction of SF H 3003. Drawings pertaining to this
matter, which are on hand in Okpo office, will be made available to Daewoo. Please advise
the undersigned if you have any comments.
23. Please see that the following comments are incorporated into the design and construction
of vessel as applicable.
24. Daewoo was then requested to solicit an additional quotation for this later arrangement.
25. Please have the design dept. look into the possibility of installing this. I think that 30 days
time is a little bit excessive for an answer to this letter.
12
Notice, Information, Request with Regret and Complaint

1.
2.
3.
4.
5.
According to our record, your subscription for membership of the society, due on 1st May,
has not yet received. Nor have we received any reply to the two reminders sent to you on
10th Feb. and 13th March. I am sorry to have to say that unless we receive your check
within the next ten days, we shall have to assume that you dont wish to continue your
membership.
We write this letter with the upmost regret. It is to ask you to accept a temporary
reduction in the agreed rate.
As of today I fail to see steps being taken to incorporate these comments.
Subsequent to the review of level 3 drawings, it appears that in my cases, there are
considerable deviation from the level 2 engineering drawings.. An example of this
deviation appears on the watertight BHD.
This report serves to point out what I continually stress to you. Daewoo continues to place
more importance on meeting a scheduled plan than having Rig ready to meet test
required. Included in this report you will note that repairs are required and Santa Fe
expects these to be carried out in a timely and orderly manner
6. There seems to be an extra conflict here somewhat. We have received approval after the
rejection of the ABS surveyor but now Owner representative is raising objection.
7. We have just received information from our client that one of four cases of crockery
shipped, could not be traced when the ship arrived at Busan. As these goods were supplied
to an order of special urgency, this loss is most unfortunate and I shall be glad if you will
make immediate inquiries into the cause. Meanwhile, we give formal notice to reserve our
right to claim on you for the shortage should the missing case not be found.
8. We were very concerned when we get official letter from our Design Dept. that.......,
9. Drawwork arrived at Daewoo damaged. It is not known at what point and the time the
damage occurred and or who caused the damage to occur. Please notify SF in advance of
the repair being carried out.
10. Our records reflect that your account still remain unpaid and is classified wwww. In
fact , more than 60days have elapsed since our initial billing. Do you have a specified
problem which we can help resolve? Possibly, we may be able to establish a monthly
installment payment plan, thereby helping your fulfill this financial obligation. The status
of your account is USD 45,000. It is very important to note that late payment charges will
continue to accumulate on your account at the current annual rate of 12%. Send your
remittance by check or money order payable to USCG citing the bill/reference no. shown
above to. If payment has already been sent, disregard this letter.
11. I am very concerned about difficulties you are having with goods we supplied earlier this
year. He informs me that a local property repair has estimated the cost of the damage at
USD 5,000 and he has now claims this amount from me.
13
12. It is becoming increasingly difficult to market your goods in the country and there seems
to be little chance of increasing sales so long as present conditions continue. The main
reason for poor sale is the high prices of your goods. We put this to you because we believe
that it would increase your share of a market in which price is more important than
quality, though this is not to suggest that quality is not of some importance.
13. Looking through our records we note with regret that we have not had the pleasure of on
order from you.
14. As already explained in our letter of 17th May this goods was unsatisfied.
15. We want to draw your intention to clauses 1 & 2 of our Contract dealing with late delivery.
16. We thank for your order of 15th May for electric power generators, but regret that we
cannot supply them immediately owing to a fire in our factory. We are making every
effort to resume the production and fully expect to be able to deliver the electric power
generators by the end of this month. Meanwhile, we apologize for the delay and trust it
will not cause you serious inconvenience.
17. We regret to report that a consignment of 4 cause of engine spare has not yet reached
them. We hold your carriers receipt No.1234. As the owner is now urgently needing the
22.
23.
goods, we must ask you to make inquire and let us know the cause of delay and when
delivery will be made. Please treat the matter as one of extreme urgency.
The purpose of this letter is to ask you foresee any difficulties in bringing in the barge and
loading O.F.E. on board for reexport of O.F.E. and barge.
In connection with the annual examination of our financial statements at June 2, 1996,
kindly confirm directly to our auditors whether or not the following information is correct
at June 2, 1996. If the above information is not correct at June 2, please supply our
auditors with any information you may have which will assist them in locating the
difference. This is not a request payment. A postage paid envelope is enclosed for your
convenience in responding directly to us. Thank you for your assistance.
We need a repeat manual WPS100. Please send as soon as possible it is our 2nd request for
repeat. Thanks.
Please refer to the list of 77 operating comments which we discussed with your Mr. Eum
last week. Please incorporate the following as remarks to the items listed below. The item
Nos. below to the same Nos. as the list of operating comments.
From what you say it would seem that.....,
Re owners Fax quoted below, we look forward to having your answer top urgently, since
24.
25.
26.
27.
you can see the situation.

It is with the upmost regret that I am now forced to make this request.
My request for the review is made on the following ground :
We regret to have to complain that the goods didn't arrive in time.
On 25th Oct. last I sent you an order for 10 copies of books, stressing the importance of
18.
19.
20.
21.
14
28.
29.
30.
31.
delivery by 5th Nov. at the latest, the date on which the new school session was due to begin.
I have received no acknowledgment of the order, nor have the books been delivered.
Failure to receive they on time is causing serious inconvenience and I shall be glad if you
will look into the matter as one of urgency and let I know when the books may be expected.
Referring to your fax 15th March 1996 we have previously advised you on many occasions
of the need to have an all inclusive contract for classification and related services.
Not having received any reply to our letter of 5th May requesting settlement of the above
account, we are writing again to remind you that the amount still owing is USD50,000.
After carefully examining the pump, we must stress surprise and disappointment at their
quality. Some of them are so poor that we cannot help feeling there must have been some
mistake in making up the order. We have no choice but to ask you to replace them by
material of the quality ordered.
It is now 3 weeks since we place orders for replacement parts. You acknowledged the
order on 5th September, but as we have not yet received advise of delivery we are
wondering if the order has since been overlooked. The delay in delivery is now causing
inconvenience and .....,
32. We wish to draw your intention to our letter of May 3, 1996 for sum of USD 5,000, which
we have not received.
33. We are at a loss to understand why we have had no reply to our two previous application
for payment of your account.
34. I am writing now to inform you that we reserve the right to claim compensation for any
part of consignment that may be damaged by rain.
15
Quotation Proposal, Invoicing

1.
2.
3.
4.
5.
6.
For the purpose you mention we recommend the following repair method, which is
specially made to stand up to this hard situation. Your views have been given every
consideration to determine our clear understanding of each parties responsibilities for this
unfortunate chain of events and we have also taken into account various other items of
communication omitted from your description of the chronological order of events. To
clarify our viewpoint to you, we would ask that you review the following observations of
the topics raised by your letter.
Subsequent to mutual acceptance of this notification of change, including the cost thereof
and delivery, we will submit you an invoice for this change.
We confirm having just called you a firm offer, subject to your reply received here within
2days.
We are very pleased for the opportunity to submit for your consideration our technical
and price proposal. The associated prices are those currently in effect at the time of this
quotation. I wish to thank you for the prompt and considerable way in which you have
handled this transaction and enclose a check in settlement.
It is in a sincere effort to be of assistance to you that we are pleased to make the following
constructive comments.
Attached thereto was a comprehensive breakdown of the costs involved for these changes.
16
Acceptance of proposal or Quotation

1.
2.
3.
4.
5.
6.
7.
8.
One copy of the following drawings applicable to the vessel is returned herewith approved.
Our approval is conditioned upon your `incorporating all comments and amendments
made in this letter or on the drawing, and is subject to the conditions set forth in our
drawing approval stamp. When this drawing is subsequently revised by you to
incorporate Owner comments or for any other reason including Class, it is to be
resubmitted for our approval.
After receiving the background on this item it is my opinion that Daewoo is entitled to
extra cost for material.
Pleased be advised that you are hereby authorized to proceed with steel procurement and
implementation of the ice strengthening modification as originally proposed and as
repeated below : Clarification of the above items is essential before a mutually agreed to
cost and delivery impact can be determined.
This is to confirm receipt of your above referenced change order which was submitted by
you on May 15.
Review of your request to spilt P. notes on H.4001 is nearly complete. Your request
appears to be basically acceptable and only minor details need to be mutually agreed upon.
The second alternative delineated in the Fax forwarded by reference AA is acceptable.
Presuming the inclining of the second vessel is satisfactory the V.C.G so determined may
be used retroactively to the first vessel.
Having carefully reviewed your letter of 10th September we should like to go further into
your proposal for an agency.
We have received a copy of your letter dated March 10th 1996 which forwards your
comments on the preliminary on board test for the subject vessel.
17
Objection to Proposal or Quotation

1.
2.
3.
4.
5.
6.
7.
8.
9.
Having reviewed this request, it is my opinion that Daewoo has overlooked several
important items concerning this matter. Based on the foregoing, the next difference is as
follows : I suggest that the extra cost of this change be offset against the pump credit and
that net result is a cancellation of this change. Please review the above and advise your
thoughts concerning this matter.
I regret to inform you that you should not expect Daewoo to precede any modification or
change work which you are directly requesting to our Design Dept. or concerned men
verbally or by a letter without any written request to Contract Management Dept. Prior to
design development.
Based on that review, it is my opinion that the total extra cost should be substantially less
than stated. The following is an estimate for the installation of this system which I
consider fair .
We have considered your counter proposal of 15th August referring to our Fax of 10th
August, but must at the outset inform you that we consider it unreasonable.
This is to confirm receipt of your above referenced Fax. We understand your rig has
operated as 100% intact and without restraint for its use in the north sea where we believe
its capacity of 1,500ft. left considerable margins over the average water depth of perhaps
800ft. Our price reduced the face value of cable from USD 10,000 to USD8,000 to allow
generous margins for manhour costs. We consider that this is more that reasonable and
for you offer less is taking advantage of the situation. After reconsideration of the facts,
we consider that the principals involved are as important as the financial aspect. We
must therefore advise that we are not prepared to reduce our offer of UDS8,000 and are
not prepared to barging further on this matter. If this offer is not acceptable we must
regret that you return the cable immediately to Okpo with associated cost on your account.
Our potential use for the cable is not relevant to the discussion.
It is with surprise that we note the content of your letter.
We are very disappointed and feel rather sad to receive the subject Fax which is so
uncharacteristics and contrary to our belief and knowledge of SFs normal business
practice.
We have carefully considered your counter proposal of 15th May to our effort of change
order No. 5, but very much regret that we cannot accept it.
We have finally received all documents referenced in your above letter and in process of
reviewing contents. Please be advised that APL is not agreement with Daewoos
assessment and that a detailed reply is forthcoming.

10. I am in receipt of your letter regarding the subject and take very strong objection to its
comments.
11. Having carefully considered the above mentioned request, we are somewhat reluctant to
18
12.
13.
14.
15.
comply for the following reasons.

We have been patient with your such unusual request in consideration of favourable
relationship between two pares.
In reply to your letter of yesterday, we express regret that we were not able to allow
payment against your check. It appears to have escaped your notice that one of the
cheeses paid in on 11th May was post dated to 25th August and that the amount cannot be
credited to your account before that date. To honor your check would have created an
overdraft of more than USD 100 and it the absence of previous arrangement I am afraid
we would not grant credit for such a large sum. I trust this explanation will make matters
clear.
We were very gratified to receive your letter..... We must therefore regretfully decline
your invitation.
We thank you for your intent No. 250 dated 25th May, but not received here until
yesterday. This delay makes it impossible for us to obtain most of the item in time for
shipment by the end of July, as your request. The shortest period in which we are able to
obtain the goods from manufacturers is four to five weeks. We could not therefore
promise delivery for much before mid September. If you are able to wait until then, we
shall be pleased to act for you. Otherwise , we are afraid we cannot accept the order. We
are sorry about this.
16. Your letter of 25th August complaining about riser tentioner reaving has caused us a good
deal of concern. We are nevertheless glad that you brought this matter to our notice. We
always dislike refusing request of any kind from the owner, but that on this occasion we
have no choice but to do so, considering extra costs thereof, and the delivery impact. We
hope therefore you will understand why we must hold this work to be initiated until your
written confirmation.
19
Alternative, Counter Proposal, Comments

1.
2.
3.
We are very disappointed by your reaction to our request which was a genuine effort to
give amicable settlement of a difficult item without undue cost free to either party. We
firmly consider that the excess is additional to the Spec. and that it is unreasonable to
expect to be free of charge.
As of date, we have submitted our change order No.1 through No.11 and expect for your
withdrawal of change order No.9, we have had no response and no formal resolution of
the remaining ten changes. Thus, we must inform you that unless you respond soon the
completion dates of the affected drawing will be delayed.
We acknowledge receipt of your fax, wherein you reject our change order request
regarding the subject. The two contractual statements you make are correct but should
not be considered in isolation. In ensure, we dont believe the intent of the contract is for
the owner to have the right of changing the agreed design and completed works at any
time without any restriction. In view of this we would request you reconsider your
4.
5.
6.
7.
8.
9.
refusal to accept our change order request.

In regard to the USD10,000 that APL claims is owned APL by Daewoo I submit for your
consideration the following information which I believe will clarify this matter so that you
will be able to authorize payment this money. Supplementing my fax to you of February
5, 1996, presented below are our exceptions and suggested modifications to your proposed
letter of intent dated February 1, 1996.
Our technical Dept. has now reviewed the data attached to your letter and the results of
this technical appraisal are summarized below. To solve this problem, that is, to obtain a
continuous second coat, it was necessary to wipe the surface.
Taking all these points into consideration, we reviewed our records of the application to
the block sections listed in your letter in an effort to identify those blocks where fish
eyes could have occurred and to estimate the amount of material and required to effect
repairs. From this review, it is conclude that....,
According to our last discussion, we have, at your request, reviewed the ventilation system
detailed in drawings and now pleased to offer our comments and recommendations in that
regard. It is apparent from our review of these drawings that the proposed system,
whilst similar to the used on your H 4410, utilizes more duct work and subsequently, fans
of higher horsepower.
Thanks for your review and comments. With respect to your comments we would like to
note the followings :
In reviewing your offer, we have two alternatives.
10. We are presently completing our review of the drawings for the subject Vessel and wish to
advise you of the following decisions. In addition, several questions have come up which
require your input before we can make intelligent decisions and they are as bellows :
20
11. I have reviewed your above referenced letter and have the following comments in response
thereto.
12. This is to confirm receipt of your above referenced letter which has been carefully
reviewed. The following are my comments based upon this review, which has been
attached for your reference.
13. Based on that review, we have the following comments.
14. Thank you for your response in the above referenced letter. In reviewing its contents, I
have the following comments.
15. With reference to your letter of 2nd May, I regret not having been able to find a ship of the
size you mention that could be free at Busan, but I have been given an option on M/V
Marina.
16. Thank you for your fax 3333/May 30, 1996 proposing accelerated delivery of H4030, our
response as follows.
21
Apologizing
1.
2.
3.
4.
Your letter of 10 th May complaining about the fans supplied to your order No.5 has
caused us a good deal of concern. We are nevertheless very glad that you brought the
matter to our notice.
I regret to have to inform you that an unfortunate error in our change order No.5 has just
come to light. The correct cost for USD25,000 is USD 30,000 and not USD25,000 as stated.
The mistake is due to a typing error and we are sorry it not noticed before we sent the
quotation letter.
Apologize for being late with information requested pertaining to ceremonies however I
am unable to even at this time to advise definite date and time for ceremonies. Neither
can I inform you of the names of APL personnel to be in attendance.
We thank you for drawing our attention to a situation of which we have been unaware
until you wrote to us and ask you to accept our apologizes for the inconvenience you have
been caused.
5.
We are sorry not to have replied sooner to your letter of May 5 about general
arrangement, but we have.......,
6. On referring to our earlier correspondence we find that we had mistaken the date for
completion. The fault is entirely us and we deeply regret that it should have occurred.
We realize only to well the inconvenience my oversight must be causing you and will do
everything possible to avoid any further delay.
7. We hasten to reply to your letter of the 15th and express our concern and regret that any
mistake should have occurred in dealing with your order.
8. We are very sorry to learn from your letter of 15th May that pipe was damaged when
delivered. Trouble is too serious not to be reported . Based on such information as is currently
available.
22
Message Text
Text 1 : Simple Notice of Fact
u Alarm bell may be borrowed from second vessel in order to expedite installation.New
items, when received, shall replenish borrowed stock.
u Each change order will describe the change and its impact on cost, weight and
schedule.
u In the upper light hand corner of the form is a 2 by 2 square for placement of a
photograph of yourself. When completing the following questions, do not be overly
concerned regarding presentation or hesitant to jot down on idea.
u For your information, This plate is available in the U.S. on at immediate basis and
delivery date on this material in Korea.
u For the same reason, when writing to firms in the United State, make sure to add the
name of the State after the name of town, as in example.
u They notified the importer of the date sailing and portable date of arrival.
u Manpower was 900 average for past week which is about 120% schedule.
u HP system is being redefined in order to facilitate installation and maintenance and to
have operation system. We feel the percentage as reported. This an accurate figure.
u One of the most critical tasks at this stage is to rectify the C.G comments.
u Many customers overlook the need for this power supply and they are virtually
impossible to purchase in Korea.
u It is customary to supply trade references. Alternatively, or in addition, the customers
may give the name and address of his banker.
u The original intentions given by the specifications, as far as Regulatory Bodies are
concerned are given by.....,
u Within the board pattern illustrated above, there may sometimes be slight differences,
but they do not effect the general principal on which the system works.
u This machine would suit your purpose as well. For the purpose you mention, .....
u Each drawing will be prepared in pencil on Daewoos standard size, 42inch by 30inch,
sheets of tracing paper.
u Each drawing prepared by Daewoo and submitted by owner to classification society
for review and approval. These are only engaged with Daewoos prior approval.
u We will issue the purchase order to vendors pursuant to a general purchasing plan
prepared by us.
u Prior to customs clearance in Korea a copy of such shipping documents shall also be
forwarded to Daewoo.
u A banker is willing to provide the customer with a statement at any time on request.
u Usually on the basis of a specification, ......
u Please note that the number hereinafter are corresponding to those in your estimate
23
u
u
u
u
u
u
u
sheets.
One of our major problems of outfitting in engine room is the lack of space.
His expert acknowledgment and wide experience will continue to be of great value to
the firm.
The following drawings were issued to Daewoo. A sepia and a print are via DHL
pouch to Okpo.
The anodes should be installed in a such manner as to minimize damage to ice flows.
As you will note, I have added an item No.5 entitled Vessel delivery impact and
indicated none. For all future change orders, would you please include this item.
We are following an approved copy of drawing to you by DHL today.
As between Builder and Company, the responsibility is on the companys side and they
are so listed in the column party responsible. We would be pleased to draft in the
first instance some items such as those numbered 16, 18 and 20 if you would care for us
to do so.
u There appears to be a difference of opinion between HEMCO and B&W as to the need
of the water separator.
u Spares may be purchased on any day which is in a business day in Korea at the offer
price ruling on the dealing day following receipt of application.
u The remaining drawing submitted with your letter of 10th May have been approved
with our letter of 1st June.
u The work is done in close cooperation with the Contract Dept. and other department
concerned.
u As individual check bills have been handled over personally to the customer, no copy
of item is available to your bill. Please pay upon presentation of bill.
The site office will be staffed by an item of twenty as listed below. The remainder of the team
will be informed later.
24
Text 2 : Advise Ones Position or Opinion

u At first, we thought this might be due to the distributed political situation in your
country, but on looking into the matter more closely, we find that the general trend of
the trade during this period has been upwards.
u After carefully evaluating alternate action plans, we are able to choose the one with the
most chance of success and least adverse consequences within time and budget
constraints. We are willing to put in additional time and effort on a given task in
order to complete it in accordance with the highest standards within deadline. We are
able to separate and lay out the scope of a given task in a logical sequence for
completion.
u We decided to postpone the inclining of vessel from 12th to 15th July to avoid schedule
conflict as you suggested. However our objective to conduct sea trails on 16th July and
final delivery on 30th July will remain same. We must ask your unstilted cooperation
as ever to realize this targets for the sake of mutual interest.
u We anticipated that the formal nomination of the main engine maker would have been
announced by this time. This is particular concern since we understood through
various discussion that you now intended to purchase the main engine from HEMCO.
u In reviewing your letter I note the following milestone which took place or are resumed
to have taken place : As this would be my first use of the service I am not familiar
with the customs and formalities involved in the arrangement.
u With the approach of delivery date, I am expecting a big increase in total sales.
u We took the precaution to sign for it as sideletter agreement
u Past experiences indicate that this is not recommended for the following reasons.
u Expect as noted an above, Daewoo will contact with the vendors.
u So long as these duties remain in force sales at the higher prices we have been asking
will continue to be difficult.
u As the delivery date draws near, we have the arduous task of property inventorying
and all the capital in a professional and timely manner.
u At the present time, we are developing two schemes based upon our unhand
information.
u However, as there are no level 111 drawing in house, there is no way to tell of the crane
can be installed as shown on level 11.
u In order to prevent further complications resulting from interferences Daewoo is to
proceed based on the attached arrangement drawing.
u If other access opening are requested to facilitate operation and maintenance of the
cranes they are to be added as necessary at directions of the owner.
u The same instructions have been copies to F&G. We are aware of the increase of fee for
ABS in handling the drawing approval in accordance with DOE/UK. It is our full
25
u
u
u
u
u
u
intent to secure a certificate of fitness for DOE in order to operate at North sea.
It has been of great help to us a time when we ourselves have been faced with heavy
commitments connected with the expansion of our business.
We have received and reviewed the supplementary delivery documents which were
executed following my departure from Okpo on May 1, and find them to be in order
except as respects the list which was attached to the protocol of tools. An appropriate
list is as enclosed, and should be included with your file copy of the protocol.
Nevertheless, as an exceptional measure, we have decided to overlook its late
submission, though we are bound to say that it should.....,
I disagree with the assumption that the Hull, when fully deballasted, will have a water
line of approximately 20feet.
Now that I have covered a brief history of the crane for H.1075 I would like to review
each item you are requesting a change order to fabricate.
In view of these many discrepancies, which ultimately affect the seaworthiness of the
vessel, and the resultant massive oil spill experienced on H.1234 it is necessary to
establish an inspection schedule to prevent a reoccurrence of future Hull.
u The report should also outline Daewoos plan to increase production on H.1111 in
u
u
u
u
u
order to recover lost production.

We hope you are right, but at the same time feel bound to mention that the present
fashionable demand for decorative china may well be more than a passing phase.
In these circumstances you mention we are prepared to reduce the number.
The only way to cope with this is to follow the welding procedure exactly.
To remove misunderstanding which have unfortunately arisen over the interpretation
of the contract relating to Regulatory Bodies, we must advise you of our position.
In respect of item No.5 above, we have calculated the daily price for the change order
at a level which will make Daewoo whole in respect of the time value loss on the cash
payment and interest on notes to be furnished on the delivery date.
26
Text 3 : Suggestion or proposal

u Concerning your situation on the Vessel departure, we are prepared to reduce our
option as a goodwill gesture to your desired amount of USD 30,000 per day for
condensation equal to vessel rather than sticking to our proposal mentioned in our
prior Fax providing APL agrees to commence condensation from the date of 1st May.
I hope this proposal will meet your full requirement and satisfaction with regard to
closing the project.
u Anyway, would you arrange for this to be sent back to yard, otherwise, if you think
returning back of cable is not only way to cope with this matter, please let us have your
proposal soon.
u We are sorry not to be able to grant your request of 10 th May for a overdraft but
realizing how a short term credit would be to you, the bank would be prepared to
consider an overdraft......,
u Bearing in mind that the existing cable will virtually allow operations over the entire
North sea, we would suggest that a sensible alternative would be for you to purchase
the cable from as at a reasonable rate for its length. We consider that $10,000 would
be reasonable and this save you the associated costs of changeover.
u In the alternative, if there are no additional rule and regulations, the words and
others shall be deleted.
u Our final decision would depend upon the terms and conditions. We think it would be
better to discuss these with him rather to enter upon what may develop into a lengthy
correspondence.
u This moment of air is insufficient to provide the necessary ventilation and temperature
requirements. Our past experience has shown that extensive distribution duct is not
necessary in the engine room and is often counter productive. As a consequence, if
will be necessary to select fans with a full speed 1,800RPM and a low speed of 600RPM
in order to meet the required two speed rating. Dependent on location of sack cutting,
exhaust duct could be modified to pick up the duct from the vicinity of the cutting
operation. Any recommendations we might have in regard to this space will depend
upon the actual engine generator selection that is made. Your advice in this regard
will enable us to make the appropriate recommendation.
u In view of the above APL has no alternative but to require one of the following from
Daewoo.
u Because of the vast amount of paper work required for this document I suggest we
make arrangements to discuss this matter at your earliest possible convenience.
u Assuming the cable is of little or no use to Daewoo it would seem that a compromise
would best suit both our interests. On this basis APL is prepared to pay $50,000 to
Daewoo and retain the cable and assume all shipping and handling costs as well as
27
u
u
u
associated cable change out costs.

We have not, at this time, proposed fire/halon dampers pending the finalization of the
actual duct size. These dampers are a relatively quick delivery item and as a
consequence, we feel it would be more appropriate to wait these sizes have been
finalized
After considering it carefully feel it would be better to offer you a special allowance on
the following sliding scale basis.
We plan to use the bench shears for these large workpieces as it will speed up the work.
It is great time saver when we have long run.
We realize we are quite away removed from the local problems but viewed from this
distance it appears that with a little negotiation we should be able to utilize a Korean
catering crew rather than having to import a complete catering crew the U.K.
28
Text 4 : Request Ones Action or Information

u It has come to our attention that the subject new buildings require a UK certificate as
well as a plan review pertaining to compliance with applicable rules and requirements.
In this regard, we are enclosing blank request for class forms and ask that you complete
same showing the above additions to your original request.
u I make this request because I feel that not enough weight could have been given to the
following conditions when the present rate of premium was fixed.
u You would send us particulars of your freight and other charges, including insurance.
u Care should be taken to insure that the stairways do not interfere with other external
structure.
u In my attempt to determine the status of the outstanding items I have found no evidence
that any action has been taken on item No.2, which concern the revision and regulatory
body approval of the subject drawings.
u What does Daewoo plan to do in order to regain this apparent eight week shippage of
u
u
u
u
u
u
u
u
u
u
u
caisson blocks.
Also, for to proceed, the following information is required.
I have circulated the enclosure to Bank of America for comment, and I would appreciate
it if you also dispatch copies of the enclosures to your counsel to make sure that there
are no problems with their form.
I the event you believe special provisions of Korea Law are necessary or desirable, then
such special provisions should be brought to our attention for consideration.
To enable us to meet your exact requirements we shall need to know which colors you
prefer. Perhaps you will make your choice and when we hear from you we will send the
goods immediately.
Your drafts must be accompanies by the following documents which are to be delivered
to us against our acceptance of the draft : Bill of lading in triplicate.
To help us improve our service to you by speeding up our response to matters arising
from receipt of your correspondence, we would be most grateful if you would forward
information copies of all future faxes of all future faces ad letters to Contract
Management Dept, for the attention of C. D. Kim.
Is goes without saying that this matter should receive immediate action by Daewoo.
I suggest that you check to determine and verify the details of life preservers being
provided.
Diligent effort on your part must be to ensure timely submission of timesheets for all
employees.
We are most anxious to resolve these issues in a positive manner. We appreciate your
feedback and are endeavouring to supply a high level logistical service.
We would appreciated by return fax the name and the place of contact for Mr. Ks
29
u
u
u
u
counterpart in Daewoo. After this information is received, Mr. K will contact your rep.
Directly.
However, APL would prefer to mutually resolve this matter rather than submitting it
for final arbitration. In keeping with this desire, Daewoo is requested to submit the
information per my fax to my departure to Korea.
Based on the situation as outlined herein APL requests that Daewoo supply APL the
following information.
We would ask that you note that bearing aside change order No.5 agreement now of
consumables for H.4029 would man it is unnecessary to change the export license. If you
do not agree them now, it is necessary to change the license at least 10 days in advance of
delivery.
Because the situation continues to deteriorate, we ask for your special help in continuing
the problem.
In this regard, we would advise that it is not accessible for the Builder to NMD and
thereby request your cooperation and assistance by making application on our behalf
for certificates issued by NMD : all necessary information and back up will be of course
provided by ourselves.
u Therefore. If has become necessary to the modify the hydraulic trolley drive unit, as per
the method shown on the attached sketch, to make the requirement operational.
Daewoo is advised to adhere to the following guidance for expedient and satisfactory of
the modifications.
u Please on pass this information to proper parties involved to insure that bins when
erected conform to the attached sketch.
u We appreciate the circumstances and were prepared to wait a sensibly reasonable time
for return of the cable and in this respect would ask that you inform us of the promised
delivery date of the replacement.
30
Text 5 : Notice of Rejection and Compliants

u We are quite disappointed in Daewoos reaction to the problem.
u Maybe the information you have on hand is incomplete, incorrect or not up to date, but
whatever the case I would like to pass on the following so that you may have a proper
understanding of the situation. It is my opinion that the information transmitted in
your referenced letter is basically unfound and untrue and I would request that in the
future you research the facts more throughly and accurately before issuing such letter.
u There would seem in this case to be reasonable grounds to feel that someone on the site
representative side is not being quite honest.
u We have been having a little problem with this folding machine. It does not seem to be
able to cope with this problem.
u We can not see any reason why there has been such a steep increase in price.
u Unfortunately you have omitted to supply us with L/C, so we are unable to obtain the
necessary customs clearance.
u We have had trouble several times finding inspection.
u In a letter dated June 15 APL reiterated its concern for the failure of Daewoo to control
the quality of erection work, and stated its requirements to rectify this situation. As of
this date we have not received any response from Daewoo, time has now become a factor
and due to urgency of the above I must request that you direct the necessary people to
compile this data and submit to APL on priority bases.
u In reviewing the Production schedule, I understand that the drawing release dates are
behind schedule. However, the contract responsibility for maintaining this drawing
schedule rests with Daewoo. It is therefore expected that Daewoo will exert every effort
necessary, including the removal of the obvious areas of buffer time in their schedule, in
order to regain the original production schedule delivery date.
31
Text 6 : Itinerary
u I will visit Korea 18 May to 2 June with following Itinerary. Please arrange for my
transportation from Busan airport to the yard with your hel, lodging at your hotel and
transportation to Hyundai. I look forward to seeing you and discussing CG
involvement in the USL project.
u We are well served by public transport to City Hall which can normally be reach from
here in less than a Quarter of an hour.
u Special information is provided for your convenience as follows :
u Will you please send me a copy of your brochure and details of terms for partial board ,
namely breakfast and evening. One doubleroom and two single rooms for 10 nights
commencing 10th May.
u When replying to an inquiry of this kind it is advisable to repeat details of rooms and
dates asked for in order to avoid misunderstanding. In the following reply the manner
taked the opportunity to refer to the advantage his hotel can offer.
Standard
price. ceiling price. floor price.
u E.S. proposed to visit UK on the compants business. He will be leaving London on 5th
August for a business tour of United States and, subject to issue of the necessary visa,
proposes to arrive LA. On 8th August, and to stay for about 14 days,when he will leave
for Japan.
32
Text 7 : Enclosure or Following

u These items are described and illustrated on pages 11.
u We would be happy to send your further information but in the meantime enclose two
single sheets for your interest.
u I submit this data for your use in the design.
u I find them to be in order to except as respects the list which was attached to the list.
u Details are given in the enclosed price list.
u The catalogue covers an extensive range of the interesting tiles, which appear to be very
reasonable priced.
u I order to have lifeboats fully comply with CG requirements, the owner purchased the
materials. The prices and reasons for purchase are given below.
u You will see from the attached calculation sheets that the new models are attractively
designed. Also enclosed you will find details of our conditions of sale and terms of
payment.
u The following list summarizes the various methods of payment used in settling accounts.
u The breakdown of the change order that would accompany this letter is a statement giving
a detailed description of the work to be done and the materials to be used.
u Listed below are the documents required for the America Marine delivery.
u The following materials will be supplied by Daewoo as free issue.
u The system of requisitioning material from the stockyard is described in this document.
The examples shown on Figure I illustrate the rule to be followed.
u The following list of lubricants and the quantities are recommended after research and
consultation with the equipment manufacture, and various sources of information. We
have used, both Shell and Arco products description where possible for close reference
purposes. Where specialty products are called for, these are lasted. The various
calculation on 6 month supply/consumption are based manufactures formulas or
recommendations. Any further assistance needed please advise.
33
Text 8 : Reject the Change Request or Request Written Confirmation

u As you are aware, we are at the last stage in completing your Vessel and should we
proceed with these modifications, it is obvious that not only our production schedule but
also delivery plan of the vessels will be disturbed seriously and overall plan for production
and delivery must be revised. Accordingly,
u They also gave us early warning that the lead time for purchasing the replacements was
critical on this modification work.
u Another burden of manpower is never more serious than when we near the last stage of
construction, we believe your cancellation of this change work seems to be the best way to
be done to our mutual benefits of this matter.
u This set is duplicated in the engine room and on the bridge. It is quite new and novel,
and for this reason we will have difficulty in obtaining spares at short notice.
u We must also point out that a delay of this order will place very severe financing burden
on Daewoo. If you decide to go ahead with this extra work, we propose that the financing
implication be then separately discussed.
u At this time, because of our target of achieving advancement of delivery dates, we are
maximizing our efforts to prevent interruption of operations and we are sure you will
agree that it is in both of our best interests, that only essential extra works be carried out.
In addition, you will appreciate that even very small elements tend to collectively cause
some problems. If you consider this change to be essential to your needs, we must request
an extra to the Contract and we would also be obliged to seek your formal instruction
signed by you. However, whilst we very much desire to help and cooperate with you in
everysense, we would like you to carefully reconsider your requirements in this instance
for what we believe is the benefit of the Project. Assuming you of our genuine concern
and willingness to cooperate, we look forward to your kind responses. In consideration
of the fact that we near the stage of inclining test and sea trial, the costs and expanses for
this modification work will depend upon whether the start of the work is before or after
these activities.
u We would, therefore, request you to authorize us in writing to proceed with this work
subject to a change order if you still require this modification to be done.
u Your written request on this matter would be appreciated to formalize the situation and
for us to proceed with this modification.
u A verbal request regarding this matter has been made to Mr. Eum, and he indicated that
here should be no problem complying.
u As for the room airconditioning, unless your firm decision shall be reached to us by
July10,1996, we will consider that you shall withdraw subject change.
u We are gong on this assumption that this change will not be undertaken until we receive
your written confirmation of change order cost and delivery impact thereof.
u No changes or additions will be initiated or undertaken until a change order is prepared,
agreed and signed by both parties.
u Extra work will only be undertaken after an authorization to proceed has been signed.
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Text 9 : Request or submission of Change Order Quotation

u In as much as Daewoo is responsible for providing a USCG certified vessel, those costs are
for Daewoos account. I am forwarding this bill to your attention for your disposition.
u All work prior receipt of any approval required hereunder shall at Builders risk.
u In reviewing the above you will note that although the individual totals for Vessel have
been revised, the aggregated total for these 30 change orders is still equal to the agreed
total of $100. The change orders for Vessel should be revised in a similar manner.
u In as much as these expanses were incurred on behalf of Daewoo, they are the
responsibility of Daewoo. Accordingly, you are requested to issue a change order credit
in favour of the owner, in the amount of USD 10,000.
u The credit shall include material cost plus 10% handling cost.
u This request may represent extra work to Daewoo. The owner agrees that Daewoo is
entitled to any substantiated extra cost incurred for this change.
u The owner is entitled to credit. The fenders are basically acceptable with the exception of
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the comments noted thereon.

These costs make up a part of change order credit which should be requested from
Daewoo.
The drawing must be submitted to the owner for review and approval prior to the
commencement of any works.
As you will see, I have added 10% to the purchase cost of this equipment to cover the costs
of purchasing, handling, receiving, packing and freight.
Exta work will only be undertaken after an authorization to proceed has been signed.
When a change order is presented by APL, Daewoo may, at its option.
1. Accept and authorize the change order on a lump sum basis as described therein.
2. Accept and authorize the change order on a time and material basis per the sated
rates.
3. Accept and authorize the change order, without agreeing to the cost of the extra work,
and with the understanding by both paries that the cost of the extra work will be
negotiated at a late date.
4. instruct Owner that the proposed change order should not be undertaken.
Estimate sheets have been enclosed to substantiate this amount.
The spec that accompany this letter is a statement giving a detailed description of the
work to be done and the materials to be used.
Until now we had been able to absorb rising costs by economics in other directions, but
now find that we can no longer to do.
This work should be covered in a change order to owner.
You will credit us with the amount charged for it on your invoice.
35
u You are requested to elect any one of the following options for the resolution of these
change works.
u You accept this notification of change and authorize us to proceed with the extra work,
without agreeing to the cost of the extra work, and with the understanding by both parties
that the cost of the extra work will be negotiated at a later date.
u You do not accept this notification of change and instruct us to discontinue any further
completion of the extra work described herein. You acknowledge that even though this
option is elected, we may have accrued costs due to your proceeding in good faith with the
extra work prior to your election of this option, and that the costs accrued by us will be
the subject of further negotiation.
u We seem to have sorted out the problems with change order.
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Text 10 : Request or Reconsideration & Additional Explanation

u At that time, there was some concern over this matter because Daewoo had placed the
seven units on order and was not sure if they could be canceled.
u I am not sure as to how we get to this point in construction and design, however we have a
situation which must be remedied immediately. I feel that the aforementioned problem is
a dual responsibility between Daewoo and APL, and APL is willing to work and absorb
their fair share of any cost associated with correcting this problem.
u APL accept responsibility for all justifiable costs including delay and any consequential
efforts, such as deviation from regulatory bodys rule and requirement, if any. If the
present best estimated departure date for sea trial is delayed due to the introduction of
this modification work, then owner shall accept the full implication of delay as stated in
para(1) above, Including payment to Daewoo of USD 15,000 per day to relieve financial
burden.
u I feel that this point cannot have been fully taken into account when.... , and hope you
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will find it possible to reconsider it.

This is against the terms of the contract and at our risk. We can not therefore continue
with this practice on the terms.
This is the actual financial loss we have suffered. It takes no account of inconvenience
and loss of prestige and good will to which we have been exposed.
We therefore hope you will reconsider your quotation and find it possible to offer a lower
a price, calculated on the basis of a monthly order for a minimum of 40 cases.
We believe the choice of wording in this introduction to the Spec. Is significant and sets
out the fundamental intent. IMCO was not mentioned in this Clause and in any time, so
could not be described as a cognizant R.B
Your reply was couched in terms indicative of offense and as we have no wish to be
antagonistic, we have carefully rechecked our letter to insure that it was reasonable. We
have been surprised to find little or no connection to your response which is almost
entirely about final reaving which was not mentioned by us. To clarify the entire work,
we reiterate the facts as we see them. To comply with your current request would mean
stripping out and reworking all reels to reduce flange diameter as shown on the approved
drawing. Our construction personal inform us that the difference in actually reaving the
two materials is not very significant. The important aspects are covers in paragraph Nos.
1&2. We have completed our work to specification and therefore your request will
cause extra work, extra cost and extra time. We respect our earlier statement that we are
not prepared to undertake this change without your commitment to accept all implications.
We would further advise that we consider our stance to be reasonable and certainly not
conducive to your stated objections.
As for No.1, your request is not assisting to start this work, as unfortunately, from your
37
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letter we feel that you consider this modification should be done at our expanse.
We moreover, issued the P.O. in order to shorten the lead time of purchasing the
necessary materials and relieve the adverse effects on our production progress, running
the risk of your cancellation of this modification work.
I am sure you will agree that the expeditious resolution of all changes in an amicable
manner is in the best interest of all parties.
In forwarding these change orders to you, we should like to take to precaution to sign for
these under clear understanding that any further trouble stemming from your request
should be beyond us and Owner grant us for this trouble at your own end.
For the purposes of keeping Owner records in order, I request that you reissue these
change orders against APL H.4029. Further, I suggest that when it comes time to settle
these amounts that they be done so in the form of a Daewoo credit which shall be applied
against the costs accrued on C/O 101.
As you know, it would be reasonable to pay the total charge against the first ship as it
actually increases the largest costs. However, we have also quoted you a price per vessel
of the basis of equal sharing but with an increase financing charge. Therefore, our total
charges for the services outlined in your letter, inclusive of computer time, programming
and hard printed copy would be USD 25,000 lump sum total paid against the first vessel
or alternatively USD 2,500 for each of the 12 ship.
Assuming the cable is of little or no use to Daewoo it would seem that a compromise would
best suit both our interests.
We are anticipating that our comments 1&2 would offset each other with respect to cost.
By the time materials arrive, most of the preparation are complete.
They are not to our normal standard but the owners representative wanted them that way
and the class society agreed.
We would also request that you supply certain equipment as is OFE which is not available
in purchasing locally and having correct rule requirements. We will discuss the exact
requirements when the above information is to hand.
There detailed request was put to you by our letter, which also gave early warranty that
some equipment might need to be supplied by yourselves.
To establish the solid facts, please advise when you passed on the information in question
to our Engineer and to whom.
To establish the solid facts, please advise when you passed on the information in question
to our Engineer and to whom. Your reply will allow us to establish firm facts without
coloration of rumors and hearing. We must add as a constructive criticism, that many of
our internal communication problems arise from the way that on any single topic, you
communicate piece meal with different parts of our organization. Some parts are verbal
some parts are written, but no one part of the organization receives all of the information.
38
u To avoid any further difficulties, we attach the supporting documents as evidence to the
fact that the installation of A60 Class BHD in the electric workshop is beyond our
responsibility as defined by the Contract.
u The following main factors (A) financial charges (B) insurance charges (D) lost
opportunity costs made up from the P.M team, the labour forces, etc which could be
employed elsewhere and the typing up of facilities and utilities. Based on the above we
have arrived at a figure of USD 20,000 and therefore consider the previous figure of USD
15,000 to be concessionaire and low, based on the best information we have at that time.
To summarize the position, we consider that there are two major factors now holding up
completion and that these 1) matter 2) C.O. initiated at a late stage of construction.
It
will be immediately apparent that the total impact of these factors at this late stage cannot
be absorbed within our normal change order rates as it extends the project into a
completely different area of financing which must be accounted for in some additional
way. Based on consideration of all these factors, we consider that the most reasonable
reflection of the circumstances is as follows : We think this will compensate us for the
situation which has developed which is not of our making and will best serve both parties
to get completion and delivery.
39
Text 11 : Quotation Validity & Completion Date

u If deviation from our standard coating are requested additional costs and delivery time
will be quoted. The sales prices set forth in this proposal are valid for a period of 50
days for shipments made within a period of 6 months from date of this quotation.
u We would ,however, stress that these special terms, like these for unsold stock of plastic
toys, are open only until 30th May. For all orders received after that date prices will be
10% higher than those we are now offering.
u There is heavy demand for them from house furniture, which we are finding it difficult
to meet, but provided we receive your written agreement within the next 10 days, we
make you a firm offer for delivery by the middle of January at the prices quoted.
u We can promise to carry out this work for total of USD 500 if we receive your
instructions by the end of this month. If as we hope, you are satisfied with the price
quoted, please let us have your instruction soon. This would help us in making our
other arrangements.
u Based on present shop and material supply conditions, delivery can be effected in 5 to 6
weeks after receipt of instruction to proceed.
u We can promise to complete all work by the end of May if we receive your instructions
by the end of this month . We would stress that the price quoted is based on present
costs of materials and labour. Should these costs rise we should have to add the
increased costs to our price.
u If all goes well, we would expect to complete unloading by about 5:00 PM on the
following day.
u We have had some trouble with these sales so it looks as though we will need an extra
day to prepare.
u We have been checking how much have been completed so far. It seems that we are
slightly behind schedule but we estimate that we will be in front by the end of the month.
u This will be loaded on board tomorrow. It looks as though we will have to reroute the
piping. Without it we have no chance of controlling the loading rate.
u All the pipe work is in position and seating. On this basis we estimate that we can have
them coupled into the system in about 5 working days.
u This work will be usually done about 10weeks before sea trials and previous to this all
power has to be supplied from this shore.
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Text 12 : Change order Rejected

u In comparing Daewoo estimate with my estimate there seems to be a large difference in
quantities. Below is a table which compass percentages. When these are available I
think this change order can be easily settled.
u I have deep regrets that Daewoo so elected to request such an unreasonable delay time
for this item.
u Inasmuch as this is not a change order, you are not entitled to extra money nor any
delay in the construction schedule.
u The contract change order No.50 is now null and void.
u It my opinion that the owner has already made a concession by providing the mooring
line as OFE, and it is unfair for Daewoo to request further concession in the form of
extra cost to install this equipment.
u We were anticipating that our comments 1 and 2 would offset each other with respect to
cost. Changing some hinged windows to fixed types should be some cost saving for
Daewoo.
u When this conditions are taken into account the present rate premium seems to be
reasonable high.
u Based our study it appears that the C.O. can be accomplished at little or no cost. The
reasons for no additional costs are as follows : In summary it is Owners opinion that
based on the above that the cost for this C.O. should be zero.
u I would appreciate you continuing with work to do modification and Owner along with
CMD can discuss reason for or against C.O, hopefully resolve to both parties mutual
benefit.
u As you must be aware, this is contravening the agreement of No.19th to which is you are
a signatory. You are remind that this item is not included in the agreement which is
irregular for you to consider it as a basis or to be included it some form of unilateral
bargaining.
41
Text 13 : Delivery Schedule

u For all remaining items, The stated dates of delivery are approximately, but in no case
would these dates be exceeded by more than ten days.
u The drawing completion schedule is based on the premise that all required equipment
spec. and certified drawings are received by Owner from Daewoo on a timely basis
u We shall take all necessary steps to make sure that your instructions are carefully
carried out, but wish to make it clear that we cannot assume any responsibility for the
safety of the goods, or for delay in delivery since these are matters beyond our control
u We can deliver the goods in 3 says time.
u In preparing magazine we have to work to a strict schedule and it clauses considerable
inconvenience when copy is not received on time. Please therefore make sure that we
have your copy by Monday, 16th may, at the latest. If it should not reach us by this date,
when your copy has failed to arrive on time and I must ask for your full cooperation in
future to ensure that copy is sent to reach us by the dates laid down.
u Three of these machines are needed for early delivery to customers and, as we
understand you have the machine in stock, we should be glad if you send them to reach
us by the end of July. It is only our right to mention that we are already acting as sale
representatives of several other publishers, including.....
u All the items ordered are in stock expect the I dozen cushions the maker inform us that
it will be another 4 weeks before they can send replacement as you stated in your offer
that delivery of all items is a matter of urgency, we.......
u As the ship nears completion, a start is made to check system, as each is completed.
42
Text 14 : Delay in Delivery

u You will know that we still have several pieces of our work to complete before we can
reach this hand over stage.
u We are very concerned that our efforts to give punctual delivery should be frustrated by
delays in transit.
u As we have not yet received any advice of delivery, we are wondering if orders have since
been overlooked.
u Delays to in sea trials will lead to in delivery and hence could lead us into problems with
contract and all its implications of price, delivery dates and other associated costs.
u We consider that this way will avoid much contractual difficulties and unnecessary
controversy for both parties and will be a real incentive to gain completion and
satisfactory delivery of a completed Vessel
u Any delay of trial run caused by such unfavourable weather condition shall operate to
postpone the Delivery date by the period of delay occasioned by such unfavourable
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weather condition and such delay shall be deemed as a permissible delay in the delivery of
the Vessel.
They are making urgent inquiries at this end, but we should be glad if you would take the
matter up with the shipping company at your end since their bill of lading shows clearly
that 5 cases were taken on board.
This would enable us to meet a temporarily difficult situation, forced upon us by
circumstances that could not be foreseen.
As you have failed to make delivery on time you leave us no choice but to cancel the order.
Delivery of the rugs is a matter of urgency. Will you please find out from British Rail
what have happened to the consignment and let us know when may expect delivery. We
are of course making our own inquires at this end.
The lead time for the purchase of required materials are very tight so we have allowed 2
weeks to be delayed.
The lead time for the purchase of required material is very tight so you have allowed 10
days to be delayed behind production schedule.
I consider this to be a subject of grave importance, in that winterization touches on several
aspects of the overall Vessel design. I believe that this matter is addressed promptly, with
proper forethought, and early in the design and construction phases of the project, any
impact to Vessel construction and cost will be minimized. In conclusion, I would like to
point out that I disagree with Daewoos opinion that the delivery date of the vessels will be
impacted by a time equal to the time period that level 2 drawings are impacted. Based on
this assumption, it must be concluded that all winterization design lay on the critical path
of the construction schedule and this is in fact not the cases. Delays in the delivery of the
vessel will be granted solely to the extent that Daewoo can demonstrate, with proper
43
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substantiation, that extra work required by the owner does in fact, adversely affect the
production schedule of vessel.
The combined effect of these two situations results in an expectation that delivery of vessel
cannot be scheduled before November 1. In view of the foregoing, and assuming that
delivery by Daewoo could be effected prior to the end of October, it will be necessary to
adopt an approach similar to that outlined in your fax. We are of the opinion that the
lesser rate would be closer to the reasonable rate for the vessel.
If the Daewoo critical path is accurate then the vessel delivery date Feb.30 is jeopardy.
Be understood that this modification would cause adverse effect to our timely delivery
efforts and to the required stability and payload of the vessels as well.
Unfortunately, this situation is causing us serious problems. Whilst we will always be as
cooperative as possible, we do not have unlimited resources and we have other
commitments which have to be carefully interfaced into our capacity. Apart from
causing us production capacity problems, delays also create significant additional costs.
u our efforts to keep the delivery date is overshadowed by the lead time of material.
u This work makes our production progress undergo a drastic change. We can hardly
keep the delivery date for the burden of manpower allocation.
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Text 15 : Invoicing
u Any additional oversee packing will be paid for by the customer and separate invoicing
will be submitted after such costs are ascertained.
u The freight charge for a case weighting 150Kgs would be USD 10, to which must be added
$ 5 for insurance and our own handling charges of $ 5, making a total of $ 20. Our
charge covers all the formalities connected with the consignment, including preparation
and customs clearance.
u As the issuance of invoices from the office concerned is normally around one or two
months in arrears, we have difficulties in quickly invoicing for the telephone usage charge.
u In the event that the numbers of drawings are not delivered during a given month, APL
shall only invoice for a prorated amount, based on the number actually delivered divided
by the number scheduled.
u 25 percent of the fixed fee specified in Art. 2.1 shall be invoiced upon advice by APL to
Daewoo that work has commenced on the preparation of the operations.
u Ten percent of the fee may be retained by Daewoo until receipt of all final deliverables
and the final invoice.
u The invoice will be made out in Korean won at the exchange rate ruling on the day of
preparation.
u It would be appreciated if you all charges to our G.A.D upon receipt of the invoice
prepared by CMD. The invoice will be made out in Korean Won at the exchange rate
ruling on the day of preparation
u All rate and payment are made in Korean Won. Prices and rates do not include V.A.T.
u The includes copy of the invoice shows quantities and total value of $150.
u The invoice value of the consignment, including freight and insurance is USD 50.
u All fees are to be remitted in Korean Won to ABS at the official ABS exchange rate in
effect at the time of invoicing. All fee will be payable in three approximately equal
installments : after keel laying, launching and completion. Payment is due upon receipt
of each invoice.
u Daewoo shall pay the amount of each invoice presented to it pursuant to Clause 3.1 within
30 days after receipt of the invoice.
u Daewoo shall pay retain the right to question the correctness of such invoice at any time
within the period of twelve months next following the date of receipt of such invoice.
u As the issuance of invoices from the office concerned is normally around one or two
months in arrears, we have difficulties in quickly invoicing for the telephone and fax
usage charge. We have no acknowledge of when APL intend to return the office space
and other accommodations. We therefore need an early discussion to settle on an
amicable method of payment of the various charges both up to, and after delivery of the
vessel.
u Please be advised that we are in process of collecting invoices and tabulating paperwork.
This is at best a slow process because of the number of vendors involved. Their slowness
in billing, and the research required to determine accountability.
45
Text 16 : Quotation
u We can assure you that so far as quality goes you have nothing at all to fear from
materials of other manufacturer in this country or aboard. We feel sure you realize that
our quoted price is very reasonable.
u As the urgency of your order left no time to make the usual inquires, we are compelled to
place this transaction on a cash basis.
u The value of the stock held varies with the season, but does not normally exceed USD 100
at any time.
u The price of each major component of the system is listed for your convenience in the
event that you have need to procure less than a complete system.
u Although verbal instructions were given we have not written to you regarding the pipe
layout and we must apologize for causing any embarrassment by not confirming the
above verbal instructions in writing.
u A periodical list showing prices prevailing on the date of issue.
u Presentation of the enclosed card, valid for one calendar month, will entitle you to select
goods of your own choice as your gift.
u All lump sum given are inclusive of financial costs and profit as defined by Amendment
No.1 to the Contract.
u He will ensure that goods supplied are sound in quality and reasonable in price.
u As the booking position is constantly changing the leaflet can serve only as a board guide
of what we can offer.
u Fears for this are given under the heading one class tourist
u We do our best to keep prices as low as possible.
u Because of our facilities for quick delivery there will be no need for you to maintain
stocks of our manufacturers
u All purchases to be made on your behalf and in your name and all accounts to be passed
to you for settlement direct with supplier.
u Prices are CIF Busan. Unknown transport cost to Okpo will be added on delivery.
Payment will be by cable or fax transfer within 50 days after delivery.
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Text 17 : Negotiation after Quotation

u Where the order covers two or more items they should be tabulated. This lessens the
chance of items being overlooked.
u But we are afraid we cannot decide to accept your offer until we have some information
on the terms and conditions we have in mind, among them the following :
u At the same time we should like you to replace the missing spares with other of the same
quality. The cases were in good order when they left our premises and in support of this
we hold the carriers clean receipt.
u Concerning the quality of the goods offered we do not feel that the prices we quoted are at
all excessive.
u Your allegations that APL has approved the use of Clayton and that everyone knew you
have commenced works are not of consequence to the matter in hand.
u In the absence of such rights, marketability and value can be adversely affected
u If necessary, Daewoo shall adjust its quoted prices to bring them in line with the amount
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covered by underwrite.
We therefore regret that we cannot accept as a fair estimate of the loss the figure of USD
1,000 mentioned in your letter a figure which we understand is based on the cost of the
goods.
The remaining three copies are then passed by the shipping company to the consignor
when pays the freight and other charges.
They want to know about the goods and this means that my staff have to spend much of
their time in giving information that should be obtainable from the catalogue.
Materials received does not match packing list description
Cost of any governmental agency testing shall be borne by the Builder.
Our own estimate of the stock damaged, based on present market values, does not exceed
$500. We feel that this valuation is a very generous one.
The buyer is then liable for any loss or damage.
It would seem that the breakages have been caused by rough handling in transit.
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Text 18 : Benefits and Important Factors

u Cost is of course a matter of importance but, as you will gather from the specification, I
am interested only in first class workship and the use of the best quality materials.
Completion of the work is required by the end of August at the latest, and I shall be glad
if in your reply you will give me a firm completion date so that I can make arrangements
for our removal from London.
u We can verify how much each parties contribute to the loss. We would prefer that do
not argue further on this topic as we place great value on good relationships with the
owner. However, we must also take into account the financial aspect.
u This did not seem to be in the best interest of Daewoo and Owner.
u A consignor will take into account the factors of cost, speed, convenience and safety and
the changes that take place in their relative importance with the type of goods sent and
the distance they are carried.
u We will sometime, indeed often does, attach more importance to the certainty of prompt
delivery than to low price, though both are important.
u With the best will in the world to serve you, we are afraid it would be neither worth
your while, nor ours, to continue business on a cash basis.
u We fell therefore that it would be jointly beneficial for the final contract document to be
as detailed definitive as possible.
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Text 19 : Explanation of wording

u When we assigned, travel and other expenses for conducting Coast Guard inspections
shall be on a reimbursable basis.
u However, since plan titles are not always descriptive of the information depicted, it is
suggested that a complete list of the construction plans be submitted to the C.G. for
review and comments.
u Plan submissions from other sources, or which are incomplete, illegible, or are not in
compliance with item (1) and (2) of this para, or which are in an irrational sequence, will
be returned without action. When appropriate, the coordinator shall reply in writing
to Coast Guard comments so as to avoid misunderstanding and to facilitate the orderly
progress of the work.
u A certificate of Admeasurement will also enable a vessel to be documented as a vessel of
the U.S. without its immediate return to the States.
u If more than one vessel of a class is built in the same yard, the required inclining
experiment shall be conducted on the lead vessel and Coast Guard supervised
deadweight measurement will be sufficient on the subsequent vessels provided that the
results of such surveys verify the sister relationship the lead vessel.
u An English translation of the forgoing standard is required and, also, a comparison
sheet pointing out an item by item equivalent between the foreign spec and the U.S. spec
with which it is being compared is met.
u Approval shall be obtained in the vessel design stage to facilitate incorporation of Coast
Guard requirements in this regard.
u However, From past experience this is likely to be an impractical procedure for the
submittals because of his lack of familiarity with UL standards, the time required to
assemble the test data, and also the time required for the Coast Guard to review
information submittal.
u Experience has indicated that this is difficult for the submitter and troublesome for the
Coast Guard field technical office. Consequently, it is recommended that large circuit
breakers meeting NEWA standard be of U.S. manufacturer.
u The progress report will also include statements regarding any problems, and comments
on any items that methods to be used in dealing with the problems, and comments on
any items that significantly affect the performance of Daewoos work.
u The Valuation Day is the business day proceeding each dealing day. Dealing days
will be each being on which banks are open for business in Korea.
u ---- Lloyds Bank -----Date. particulars. Payment. Receipts. Balance.
The items add balance shown should be verified. Detail rates and calculation of any
interest charged are available on request to this branch. The bank is not liable for loss
49
or delay caused directly by industrial action or by circumstances beyond its control.

u ---- Individual Experiment Record -----1. Name
2. Daewoo Service
3. Social service No.
4. Citizenship
5. Other ( specify )
6. Education (School and Location) (Curriculum or Major) (Dates attend) (Degree)
7. Major Programs and Training
8. Honor, Awards, Patents, Professional Licenses, Other proficiencies
9. Domestic geographic consideration (Indicate limitations or strong preferences)
10. Interest in foreign assignment
11. Language : Speak, Read/Write(Which languages and with what proficiency)Position
Title & Description.
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12. Underline position title : then describe responsibilities and achievements or

significant contributions. Indicate products, type of operation and industries
involved. Show field or activity of subfunction. If managerial position, show
numbers and types of employees.
The builder shall give a written notice to the representative reasonably in advance of the
date and place of such tests and inspections to be attended by them for the convenience.
At least three weeks advance notice of the date of the stability test shall given to the
Coast Guard.
The undersigned, as secretary of state of Taxes, hereby certifies that according to the
records of this office, Mr. H. Hall qualified as a notary public for the state of Texas on
May 25, 1996 for a term ending on May 30, 1996.
The engine is run at a predetermined speed decides by the engine maker in cooperation
with the shipowner and yard.
These vessels are designated us Daewoo H.No. 4001.
This will be all that we need in 95% of our cases, For other 5% we may have to
subcontractor.
Neither party shall assign this agreement without the prior written consent of the other
party except to its parent or affiliated companies.
A plot of these points on logarithmic coordinates produced a straight line with a
negative slop of 0.95.
Measuring, you set up milestones and subgoals for your assignments and objectively
measure yourself against these in tangible concrete terms. If they do not make sense in
this light, then give serious thought to weather you want to expand the energy and the
time to accomplish them.
50
u The main philosophy of progress report is to measure actual physical work completed,
regardless of manhours consumed versus planed. For a yard, the budget for manhours
cost shall be the calculated manhours rate or the agreed subcontractor manhours rate
multiplied by the appropriate number of manhour. From this, necessary decisions shall
be made, and action taken. PID is responsible for monitoring the owners approval of
drawings and advises the owner of drawings outstanding beyond the agreed time period.
The owner shall thereafter without delay, and within a timelimit to be mutually agreed
upon, approve the work or make his objections known to the yard.
u For the workperformed on time rates a minimum of 14 days notice would be given by
Daewoo to contractor in respect of fluctuations in the labor force requirements greater
than 10%. Contractor shall accommodate smaller fluctuations within 48 hours of
request. They noticed what they believe to be an error in the form of letter of credit.
The work shall be carried out at 10 hours shifts per day, including time for meals and
rest, 6days per week or at the most favorable shift plan approved by K.R. at Daewoo
choice for the completion of the work under this contract. Approval of time sheets
must be obtained on a daily basis from Daewoo. Consumables are defined as those
materials expanded in whole or in part during the course of the work and which do not
become a permanent part of facilities. All waste and surplus materials will be the
property of Daewoo. Contractor shall not purchase or rent any items to Daewoos
account in addition to that covered by this contract unless agreed upon in writing by
Daewoo authorized personnel.
u Rates for hire of equipment supplied by Contractor and for his use are not paid on
hours on standby.
u The procedures and routines and the philosophy behind the are under continued review
and will be updated from time to time as required. All incoming mail, as well as
outgoing mail to client, shall be addressed to the project Manager. If another person
should be addressed his name will come after the Project Manager. The Project
managers Dept. will do all internal distribution of mail. A list showing authorized
persons to sign letter and fax will be sent out.
u The Coast Guard will make every effort to be responsible to the ABS in matters of
interpretation. Where the Coast Guard is already involved in plan review and
inspection of some items as of 1 June 1996, such as piping or electric system, the C.G.
will normally retain these activities until the projects are complete. At the operating
level, C.G. and ABS personnel will continue to work in close cooperation. For areas
listed in Section 1 of enclosure, it is envisioned that C.G. inspectors will normally
perform inspections only for the following reasons : Upon receipt, the OCMI will
provide the principal surveyor of the local ABS office with a copy of the application for
inspection to forward to the ABS V. President. Upon completion of inspections, and
51
when a vessel is ready for classification, ABS will provide to the OCMI a copy.... The
ABS will forward one copy for approved plans and accompanying approval letter to the
cognizant OCMI, nothing in the approval letters and on the plans which plans were
approved as complying with C.G. regulation. If the submitter does not specially ask for
C.G. review, the plan will be forwarded to the ABS for action. MMT will ensure that
the design assumptions are appropriate for the service intended, and will advise the ABS
if any preliminary discrepancies are identified.
Daewoo has made a particular request that ABS provide it with all of the assistance for
the classification of vessels to be built at Okpo shipyard as yard H No. 4444. Daewoo
and ABS desire to enter into a written agreement wherein ABS will provide essential
service and Daewoo agrees to pay fees in accordance with schedules of fees attached
hereto and made a part hereof. Additional services, required for compliance with the
standards of other organizations will be covered by a separate memorandum of
agreement and will incur additional fee. All fees will be payable in three approximately
equal installments, after keel laying, launching and completion. Any and all taxes
imposed under the raws of the Republic of Korea on the payment made in accordance
with this agreement shall be borne by ABS, and then Daewoo shall be entitled to deduct
such taxes from the payments to be made, provided that Daewoo pays the taxes on
behalf of ABS under such raws.
52
Text 20 : Responsibility
u
u
u
u
If any dispute arises out of the performance or the interpretation of this agreement,
committee composed of 4 members whose duty shall be to seek a friendly solution.
We are not engaged in any liability or arbitration and we are not aware of any claim
pending or threatened against the fund.
Whether similar in character to those heretofore enumerated, beyond the reasonable
control of the party affected by the same.
We have taken all reasonable care to ensure that the facts stated herein are true and
accurate in all material respects and that there are no other material fact, and we accept
responsibility therefore accordingly.
We do not want to question whose responsibility applies to the failure supply vent duct
V/V on time. We still believe all the parties, and particularly Owner should share the
responsibilities. This unfortunate problem came to surface in early day and then Owner
agreed to supply them on our behalf.
u We request this material ship to Singapore via M/V Marine using our local agents. All
charges and costs shall be for the sole account of Owner, thereby relinquishing Daewoo
of all responsibility, once formal export customs clearance documents/licenses are issued
to owner.
u His terms leave no room for misunderstanding.
u If such approval or comment is unreasonably delayed by Owner, the delivery date shall
be adjusted accordingly but only to the extent such delay shall be the cause of delay in
the construction of the vessel.
u It is the legalduty of the buyer to collect his purchases from the seller and, unless the
terms of sale include delivery. The buyer is therefore responsible for any loss, damaged
or delay that may affect the goods after carrier has taken them over.
u Daewoo will provide insurance of comprehensive cargo warehouse to warehouse for
Owners account. Insured value is full CIF value with USD 5,000.
u APLs liability for any deficiencies in the services provided is limited to performing at its
expense any such services which are deficient because of APLs failure to perform said
services in accordance with the above standards.
u Owner will so remedy any such deficiencies, provided Daewoo has notified Owner in
writing within a reasonable time, not to exceed 30 days of the discovery of any such
deficiency, but in no event later than the delivery date of vessel, which is anticipated to
be 15 May 1996.
u Owner will carry and maintain in force the insurance coverage described below with
companies satisfactory to Daewoo.
u His probable arrival at the shipyard will be Thursday afternoon. Owner assumes
complete financial and personnel responsibility for Miss Lesiow while she is in Korea
53
and quarantines her return to the United States. The quarantine is forwarded with the
understanding that Daewoo will provide whatever assistance necessary in the issuance of
Miss Lesiows Korean Visa. Under separate fax you will find Miss Lesiows resume.
Please do not hesitate to contact I should you require further information. Thank in
advance for your help in this matter.
u Any notice or other communication required or permitted to be given or served
pursuant to this agreement shall be in writing sent by registered airmail or delivered by
hand to the address of the respective parties as follows :
u Notice shall be effective if sent by registered mail, postage prepaid, seven days after the
date of mailing.
u Daewoo shall notify the owner of unacceptable invoices without undue delay. Daewoo
shall maintain full responsibility for the work and functions of his subcontractor.
Claims of force major shall be forwarded in writing within 7 days of occurrence duly
certified by proper authorities.
u Owner shall receive from the Builder at least 6 days notice in writing, or by telegram
confirmed in writing, of the time and place.
u We meet the requirements the USCG which has regulatory control the vessel.
u This contract diagram establishes the minimum functional requirement of the system.
u Exact time for inspection will be given with reasonable notice, taking into consideration
location of MFG shop.
u Builder has exerted all reasonable efforts to expedite performance, avoid default, or
procure equivalent substitute performance.
u This contract shall be deemed to have come into force on June 1. The work governed
by this contract is planned to end July 1.
u Contractor shall abide by any regulations relating to the Project and other routines,
rules where applicable.
54
Text 21 : Payment
Such cancellation shall be effective as of the date the notice thereof is received by the
builder, upon receipt of such notice and upon the buyers demand, refund in accordance
with the contract.
u If the buyer is in fault of payment as to any installments as provided in para.4 of the
contract, the buyer shall pay interest on such installment at the rate of 185 per annum
from the due date thereof to the date of payment to the Builder of the full amount
including interest thereon.
u In any event of default by the Builder, the buyer shall also pay all charges and expenses
directly incurred by the Builder as a result of such default, but Buyer shall not by
reason of this provision be obligated to pay to Builder any so called consequential
damage.
u If owner supply items according to this contract are to Owners account and
responsibility, this will be done only against requisitions and costs will be late invoiced
u
u
u
u
u
to Contractor at ruling price list, or at cost plus 20%. Work shall preferable be carried
out on lump sum or schedule of rates basis. When no such agreement is made the work
shall be carried out on time rates
He is appointed as a liquidator to wind up the business and will discharge all the firms
liabilities and receive all payments due to it. According to our records the amount
outstanding on your account with the firm is USD 300.
We have had some trouble arranging L/C with bank because of the tight credit situation.
We are having some problems due to foreign exchange control regulations. We must
advise you therefore of a possible delay in payment of about 20 days.
Since we are aware from personal knowledge that firm is personally sound we presume
that failure to honor the bill was due to some mistake. We shall be glad if you will
explain the reason. At the same time we must ask you send by return the sum due on
the bill.
We were under impression that payment was not due until the end of the month, when
we would have had no difficulty in setting our account.
This loan is due for repayment at the end of this month and I have already taken steps to
prepare for this, but unfortunately due to a fire at my warehouse a fortnight ago, I have
been faced with heavy expected payment.
I am therefore writing for permission to defer payment of your invoice until the end of
September.
payment must at the time of application and a contract note will be sent to you written
48 hours of receipt of application. The share certificate will be forwarded within weeks
of the date of payment
Five percent of the Contract Price shall be paid by way of a deposit to be made in the
55
name of the Buyer at the Builders bank by telegraphic transfer remittance at least three
business days prior to the Delivery date of the Vessel.
u The amount due will then be paid in good time for you to issue the air ticket and details
of the flight booked.
u Payment will be made on presentation at Busan Bank.
u Provide you fulfill the terms of the credit we will accept and pay at maturity the drafts
presented to us under these credits and, if required, provide discounting facilities at
current rates.
u Please be advised that third installment payment of USD 1,500 was transferred for value
on March 15 to Bankers Trust U.S. for deposit to the account of KEXIM bank, account
no. 14.128.898 in favor of Daewoo.
56
Text 22 : Confirmation
u Before drafting up the formal contract for signature we should like to conform the main
points upon which we reached agreement , namely :
u Before we expedite further steps, we would request your cooperation for clarifying the
following matters.
u Although we believe proceeding on the basis outlined above will benefit all concerned
parties, we wish to obtain ARCOs consent before committing to such a change order.
u We are proposing to obtain cover of USD 500,000 and in the circumstances would ask
you to pay half the cost of the premium. We are now investigating possibility of
obtaining this cover and cost of doing so, but would appreciate your agreement in
principal. If such insurance cover cannot be obtained, we repeat our proposal that any
such liability be shared equally.
u We note and agree with your comments on the transfer of title. However, as we were
simply seeking to shed the associated risks, your acceptance of the following points
would fulfill our needs.

This fax is served to confirm that Owner has assigned to their agent, Skypark, right to
act on their behalf of the purpose of securing and transporting the spare parts shipped
to Mr.Eum which are presently in Seoul Customs and are to be.
57
Closing Message
Close 1 : Request Change Order Quotation
u Would you please advise the credit to be extended to Owner for this change.
u You are hereby authorized to proceed with this change for Vessel based on the foregoing.
Please issue change orders for my signature which I will approve and return.
u We trust you will accept this as being a fair and reasonable solution of the matter. Please
advise the credit which is to be extended to us.
u Please submit c/o quote based on the prior information submitted in letter dated May 1.
Close. 2 Change Order Accepted or Rejected

u We both agreed that because of the fine method in which Daewoo handled this matter and
the extra trouble that was involved, Owner would not request a change order for a
reduction in cost.
u Such a defect, if left uncorrected, would clearly be in violation of the Spec. In view of the
foregoing, the owner has no alternative but to return the request for change order
rejected.
u Based on the foregoing, the owner has no other alternative but to return this request for
change order rejected.
u Based on the foregoing, your request for extra money and time is unwarranted and is
hereby rejected.
u In view of the foregoing, The subject change order is returned herewith rejected.
u In view of the foregoing, This request for change order is being returned herewith
rejected.
u I think this is a rip off. Please investigate and advise your option of fair price.
u Your request is not at all unreasonable and we were had able to grant it would gladly
have done so, but as matters stand I am afraid we must ask you to settle with us on the
term of payment originally agreed.
u Should you elect not to proceed as described in second para above then. Pleased proceed
as called out in the construction contract page 20.
58
Close 3 : Pending Decision or Action

u The two cases and their contents have been put aside to await your inspection. In
support of the claim, we enclose a certified copy of our suppliers involve.
u Immediately we receive the accepted draft we will arrange to ship the goods and
meanwhile are holding them for you.
u If request for delays can not be requested and change order rewritten to satisfaction of
both parties then I hereby notify Daewoo to close all work on related subject.
u Approval of this change order will be withheld pending receipt of this confirmation.
u It is grateful if you would hold your decision pending receipt of my comments.
59
Close 4 : Information and Notice

u
u
u
u
u
u
u
u
u
u
Please let us know as soon as you can............,

As the request is unusual, ..........
I enclose stamps to the value of $10 to cover postage.
I shall be glad to supply detail on your request
This memorandum may be terminated by one party after written notice to the party.
This schedule will be linked to their proceeding activities in the detailed engineering
schedule.
We enclose the bill of lading and shipping documents and hope you will have no difficulty
in disposing of the goods.
As requested, we sent the goods this afternoon, carriage paid.
It is intended that the provisions of this circular be placed in effect as soon as practicable
on or after 1 June 19996.
The enclosed copy of the invoice will give you advance information of the consignment.
u Assuming the manufacturers quotation to be accepted and that the date of delivery at the
factory is known, the agent will now write to the shipping company.
u The foregoing information is given to you on the clear understanding that it is treated as
strictly confidential.
u We are in the process of sending them by DHL to Korea.
u We look forward to receiving this information from you very soon.
u We feel sure you will find these goods satisfactory in every way and perfectly suited to
your needs.
u We will use our best to put matters right.
u We place this order on the clear understanding that the consignment is dispatched in time
to reach us by end the of this month.
u Hope this answers you questions.
u Please note that only items 12 threw 19 on this p.o. apply to the subject equipment.
u Any information on hand in Owner office will be made available to Daewoo.
u This list is not considered to be a final list from D.O.T. and additional items may be
forthcoming.
u We trust that procedure will be satisfactory to Daewoo.
u In our review, your decision to consign lower priced good is a step in the right direction
and we think you will find that future statements of sales will confirm this.
u We return for these charges you have our assurance that interests would be carefully
protected.
u Please note that the above quote is actually an informal translation of the Korean
document and in the event of conflict, the Korean document shall take precedence.
u The experience gained would provide a valuable guide to future projects.
60
u We hope the above comments satisfactorily clarify some of the issues now being raised.
u I have noted that the delivery on this schedule is shown as Jan 30, 1996, a full two months
ahead of the contract schedule. I wish your good fortune in the pursuit of this schedule
and I will do whatever is necessary from Owners side to help maintain this schedule.
u As already discussed verbally with your Mr. Eum, we can reluctantly accept your invoice
but feel the need to record our feelings on the matter and in fact would welcome your
consideration of whether such a charge is really necessary and take this as your will
established practice which will be applied in the future at the same instance.
u In summary, it would appear that in order for Daewoo to meet the intentions of the spec.
they must place draft marks on two sides of the column.
61
Close 5 : Suggestion or Proposal

u I enclose the catalogues of our products for which you ask in your letter of 7th
May. It includes particulars of portables by a number of makers. We think the
Olivetti is a machine that would suit your purpose very well.
u We make this allowance because we should like to do business with you if possible,
but I must stress that it is the furtherest we can go to help you. At least I hope this
revised offer will now enable you to place an order.
u Thank you for the opportunity to submit our proposal and we look forward to
your favorable response, if we may be of further assistance, please don't hesitate
to contact us.
We have no wish to embarrass you and if you can replace the materials we are
prepared to allow the stated time for delivery to run from the date you confirm
that you can supply the materials we need.
u The Agreement would save us all the trouble and inconvenience of making
numerous separate payments on invoice.
We should therefore be most grateful if you would allow us to defer payment of
your present account to the end of November. This would enable us to meet a
temporarily difficult situation faced upon us by events that could not be foreseen.
If you grant our request, we shall have no difficulty in settling with you in full
when the time comes.
u Please book a seat for me on the plane leaving ... for ... on
I wish to reserve a seat on the plane which leaves for ... at ... hours on ...
u Should you not be able to accept it, perhaps you could recommend some other
reliable and well established firm whom we might approach.
u I like responsibility, enjoy the challenge of new situations, and derive much
pleasure from improving my abilities and from helping others to improve theirs.
I hope I may be granted an interviewed, when I can explain my qualifications
more fully.
u Early reservation of the accommodation offered is necessary as bookings for
August are always heavy and I should not with you to be disappointed.
We assure you that everything possible will be done to make your fortnight's stay
a very happy one.
u No doubt you will now write to then direct and I have told them to expect to hear
from you.
u SF will be happy to discuss this matter with you at later date after we have had a
chance to review request in greater detail.
62
Close 6 : Request Action of Information

u USCG and DOT drawings should be sent to my attention for on pass to SF Orange
and subsequent submittal to these agencies.
The foregoing 8 items are considered serious and time consuming and have been
listed herein to highlight them, however, the smaller items are to be treated no less
seriously and are required to be completed prior to rig delivery.
u You will note from our order that prompt delivery is most important and we reply
upon you to make sure that the consignment is delivered to the docks in good time.
We have made all necessary arrangements with the shipping company.
u At this time, the Koje office is of the opinion that unless rapid and acceptable
progress is made to items no. 11 through 15 of the above list, we would prefer not
to issue the class cert and have so advised our New York office.
u As the matter is urgent we should appreciate an early reply.
We shall be pleased to send you any further information you may need.
Please say whether you could supply the goods as we need them urgently.
When replying, please say when you could deliver.
Delivery would be required within 4 weeks of order.
We hope you will find both samples and prices satisfactory.
u We look forward to a prompt reply.
u Please let us have your opinion soon.
u Would you let us have a number of your catalogues so that we can keep them for
further reference ?
u If you are interested in quoting for this job we wish to know by return and
expect your final price by 30th May.
u Please let me know the shipment date for your orders so that we can start
planning for it to be met and rushed through customs.
u We shall be grateful if you can give us some advance information.
u We hope you can arrange for these to be sent within the next few days.
u I enclose a medical certificate to this effect and shall be glad if you will arrange to
refund the forepaid, subject to deduction of any cancellation fee that may be
chargeable.
u Please inform us on what terms this insurance can be arranged.
u Will you please send me particulars of your sailing's to Suez during next month. I
should be glad to have any available literature giving information about the ships
scheduled to sail during this period.
u We should be glad if you would let us know the cost, including your charge, of
sending this consignment CIF Busan, and whether you would be willing to handle
it for us.
u We should appreciate a prompt reply because the books are needed well in
63
u
u
u
u
u
u
u
u
u
u
u
u
u
u
u
u
u
u
u
u
u
advance of the new school session.

As we are in urgent need of several of the items, we should be glad if you would
make up and ship the order as soon as you possibly can.
The credit we have arranged is sufficient to cover invoice cost and any further
charges.
As soon as details of shipment are known, please notify us by air mail.
If you will complete this and return it to me, I shall be pleased to add your
daughter's name to our waiting list you need have no anxiety about your
daughter's joining this tour in her own.
I should find if most helpful if you could also supply samples of the gloves, with
details of your prices and terms of payment.
We await your information with interest.
Would you be good enough to make inquires and let us know whether the
financial standing of this firm justify a credit of the above amount.
We shall be glad to have your credit note for the value of the damaged items.
Will you please state the amount of your charges for arranging the necessary
credits.
I should be glad if you would give the benefit of your advice, bearing my
preference in mind.
I enclose a proposal form, as requested, and shall be glad if you will complete and
return it not later than seven days before the date from which the policy is to run.
Will you kindly confirm that you accept the alternative booking offered ?
Please make any alterations that may be necessary and let me have the revised
text as soon as you can.
Please acknowledge your agreement with the above values by signing this letter as
provided below, and returning one copy to my attention.
During the initial offer period between 23rd September to 18th November
inclusive, investors will receive an extra 1 & bonus allocation of shares.
You should complete and detach the application form on page 14 of this book and
return with your remittance of bank instruction letter.
Kindly call me after you have had a chance to review the enclosure.
We should be glad if you would send me a copy of your catalogue and any other
information which may help me to make the best choice for my choice.
When replying, please quote your rate of freight.
We shall be glad to receive this information by return and meanwhile have put
your order in hand for dispatch immediately we hear further from you.
We note that we may expect delivery by the end of this month of the goods already
ordered and look forward to receiving them in good time.
We are most anxious to serve you and hope to hear from you very soon.
64
u All these items are urgently required by the owner. We therefore hope you will
send the immediately.
u We shall be pleased to receive your letter, which will have our prompt and careful
attention.
u Will you please expedite this request and inform me as possible.
u Pls let me know what the present situation is regarding this matter.
u I will be pleased to hear from you in the near future. I know that I can help you in
this area.
u I trust that you will be able to take some positive action to correct the foregoing,
and by doing so effectively reduce the number of exceptions on delivery of each
vessel.
u Upon completion of test, onpass this information to me soonest for my file.
u We would ask that you reevaluate your position as stated in your telex of Jan 27
and are hopeful that you will be in a position to reinstate the commitments and
promises Daewoo made to SF regarding these rig deliveries.
u We would appreciate your transmitting to Mr. F. Howall a copy of your telex of
May 11th, so that he will be aware of all agreements.
u No doubt there is some special reason for the delay in payment and we should
welcome an explanation or your remittance.
u As there appears to have been ample time for you to collect and credit the sums
due on the check paid in, I should be glad if you would explain why payment of
check was refused.
u We hope it will not be necessary to send you any further reminders.
u We quite understand the need for references.
Any other information you can give us about this company would be very welcome.
We shall be most grateful for any information you can obtain for us.
u As we are not familiar with conditions in your country, this is a matter on which
we would welcome your views.
u Without regard to these deficiencies or without a realistic effort to remedy them,
newbuilding 4004 cannot be expected to the either fouling free or
hydrodynamically smooth.
u Your help in rectifying this matter will be most appreciated.
65
Close 7 : Inform Further Action, Keep One Advise

u As more information becomes available concerning the delivery of these items and
the detailed dimensions if same, it will be forwarded to Daewoo.
u All these are matters of importance and we shall take a closer look at each one of
them.
u It is of course impossible to meet every different requirement, but we will try to
meet a reasonable level which will satisfy most people.
u We will use our best efforts to remedy such failure.
u As you stress the need for urgency, we will do everything we can to ensure early
shipment
u If you accept our suggestion, as we hope you will, we will arrange for the goods to
be delivered to you in 3 day's time.
u Immediately we receive confirmation of the booking we will instruct the bank to
make the payment due.
u In addition, in the interest of expediting the approval of the contract by KEXIM,
we hereby agree to use our best efforts to this end that all of the above events
shall have been completed not later than July 31, 1983.
u We shall arrange insurance on the usual terms and the certificate of insurance,
together with our draft bill and the other shipping documents, will be sent to you
through our bankers, as well.
u We will revert the results ASAP.
u If they can supply in a hurry we will send all detail information on what we need.
u In future, we feel you would be well advised to warm potential clients of this last
piece of information before the negotiating stages.
u We of course inform you of our intention to return the goods.
u Please inform us of your actions and any possible consequences at your earliest
convenience.
u If there are any later changes in these dates, we will of course, keep you advised.
u I will keep you advised on status of urgent parts shipment.
u We will keep you informed of progress.
66
Close 8 : Request Confirmation, Concurrence, Comment, Signature

u We suggest payment by bill of exchange drawn on us at 30 days after sight.
Please say whether this is agreeable to you.
u Kindly confirm by return that a suitable wagon will be provided at our works for
the day and time stated.
u Please be good enough to confirm that you accept the appointment on the terms
stated and that you will be able to commence your duties on lst August.
u We hope you can comply without too much trouble but we believe a fully
definitive contract is of great mutual advantage.
u If Daewoo believes that agreement to these changes can be effected with the need
for a formal contract amendment, the matter is however of great concern to the
banks, and we are putting this matter forward with a request that Daewoo
consider these proposals and indicate to us that in substance they are acceptable.
u I will then arrange for a formal agreement to be drafted and copies sent for your
signature.
u As we have promised to write recommending us to you, we will content ourselves
at this stage by summarizing the terms we should be willing to accept.
u Please confirm that you are in agreement and Daewoo is preparing a credit for the
tank level system.
u If you would be so kind as to send these two amendments to my attention in
Orange, SF will expedite their signature and return to Okpo.
u Upon your acceptance of the above, and our receipt of the requested insurance
information, we will proceed to draft a definitive change order reflecting our
agreement.
u We trust you will find the above to constitute an acceptable condition of our
discussion concerning the change order which should be now finalized.
u Please advise us of your review so that we can arrive at a mutually acceptable
agreement. Your cooperation is greatly appreciated.
u While we welcome your recommendation, we are bound to say that it does not
seem to be supported by our own evidence.
u We appreciate your comments on the proposed test procedure, however, in the
future we would appreciate your forwarding all copies of items such as this to us
for our review.
u Please let us have what your comments are concerning this matter as it is urgently
required.
u We kindly invite your comments on this enclosure.
u We look forward to receipt of this information requested above together with
your comments to allow proper consideration to be given by both parties for a
speedy and satisfactory resolution.
u We trust that the explanation given above clarifies this issue. Accordingly, we are
interested in your comments.
u If you give us the agency we should spare no effort to further your interest.
u Please acknowledge receipt by signing below and returning two copies of this
67
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letter to the ABS Okpo office.

We feel that this procedure concurs with the spirit of the contract but we would
request your comments or approval as applicable.
Please acknowledge receipt of this letter below and return one copy to my
attention.
Thanking you very much, we remain.
If the foregoing meets with your approval, please so indicate in the space provided
below.
We shall be glad to learn that you are willing to accept the agency in these terms.
Please add your signature to mine on both copies and return one copy to me.
I hope to hear favorably from you and feel sure that we should come into a
satisfactory agreement as to terms.
Having now given you our explanations, we should in return welcome your
comments.
If the terms of the memorandum of agreement are satisfactory, please return one
copy of the memorandum bearing the signature of the appropriate company office.
We would be appreciated if you would kindly acknowledge and accept the
foregoing terms and provisions by signing and returning the enclosed copy of this
letter.
In the foregoing correctly reflects the understanding reached with regard to
amendment of the Agreement, please indicate your acceptance in the space
provided below and return one fully executed copy of this to us for our files.
Please confirm your concurrence with this understanding.
If the above is acceptable, please so advise by return and I will make
arrangements to proceed. For your information, the cost of the ground detection is
estimated to be less than 1,000.
Pls advise ASAP your concurrence not to mount these.
Due to the importance of the change order proposed above, please advise whether
the same is acceptable by immediate reply telex.
We trust this is acceptable to you and looks forward to your early confirmation or
comments.
With these changes, we find your draft fully acceptable.
This will serve as an authorization to the designated Santa Fe copy recipients of
this telex to execute the above quoted change order if they otherwise find its
contents to be acceptable.
If, as we hope, you are satisfied with the terms, please let us have your confirm
tax by return.
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Close 9 : If Clauses
u Should you be unable to deliver the goods, please let us know at once.
u We trust that the above will be sufficient for your purpose and if you do not
entirely concur, please advise accordingly.
u If there is any way in which either our company or our subcontractor can be of
any help either now or later, do please let us know we shall be only too glad to do
anything we can.
u We should find if most helpful if you could also supply samples of the various
skins in which the gloves are supplied.
u If the schedule time conflicts with your business or if the frequency of meetings
proves insufficient, we will make ourselves available at any time.
u If you cannot do so, then I must regretfully decline your offer as it stands.
u If you are in doubt about the contents of this document, you should consult your
advice.
u Should you need any further information, please let me know.
u If the day and time suggested are not convenient and if you will suggest an
alternative appointment, I will rearrange my other engagements as may be
necessary.
u Should you have further questions on this quotations, feel free to contact us.
u If you have any questions concerning the above please advice.
u My company would guarantee Mr. D. K. park's financial security during his stay
in Iran and payment of expenses he may incur.
I enclose the following supporting documents. Should you require any further
information, and if you will let me know, I shall be happy to supply it.
u If I can help you further please do not hesitate to get in touch with me.
69
Close 10 : Prompt Action or Acknowledgment Required

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I thank you for your trouble in this matter, but ...

It goes without saying that this matter should receive immediate action by Daewoo.
We trust that you will take immediate action to correct this discrepancy.
Please give this matter your highest attention.
May we hope we can receive guidance of your intention as soon as we can.
We would appreciate your personnel looking into this matter as soon as possible
and in this regard, their contact with this, office is essential for ensuring a
deficiency free delivery.
Thank you for your time and assistance.
We shall be therefore grateful if you will give the matter your immediate and
careful attention.
We would be much obliged if you reply to us on the above by June 10 for our
necessary arrangements for this extra work.
I shall look forward to hearing from you soon so that we may complete your travel
arrangements.
As we wish to make arrangements in good time we shall appreciate an early reply.
We look forward to your early response advising us of your decision on the above
potential variation.
We look forward to hearing that you can undertake the work for us.
We enclose a copy and hope it may have your early attention.
As there is some urgency in the matter may we look forward to hearing from you
very soon ?
As the matter is urgent, we would like to have the information by the end of this
month.
In view of the time frame, I respectfully request that you review the above and
advise the required answers by Monday June 6.
We request you devote immediate attention to these above airway bills, as the
equipment in these shipments may have an immediate impact on the overall
operational trials.
I await your reply regarding this matter and expect that you will give it very
serious consideration.
If you will refer to drawing no. 4, you will note that the KVA is rated as follows.
Your prompt attention to the redress of the above will be appreciated.
Your review and comments are urgently required.
Your prompt attention on this matter will be appreciated.
Please give this matter your very urgent attention.
I will bring this matter to attention of Mr. Howell on this end.
We have not passed this information to Manley so would appreciate your doing so.
70
u As this information is vital to SF we would appreciate an immediate reply by

return tax.
u This matter has been neglected by Daewoo for several months and with delivery of
Rig 135 approaching this needs to have your personnel attention.
u We thank you in anticipation of your early response.
u Acknowledge of this telex is requested.
u Pls confirm receipt of this telex.
u Please acknowledge this order and confirm that you will be able to deliver them
by July 10.
71
Close 11 : Request Understanding or Apologizing

u We are very sorry that this situation has arisen but our analysis of the events and
legalities is given above and we must reserve our position.
It appears that the cause has been partly due to misunderstandings and potential
programmed problems, nevertheless we are firmly of the opinion that our
conclusion is correct and that you have no grounds for pursuit of a claim against
us.
u I regret that there should have been any misunderstanding and trust the enclosed
copy of our letter make the matters clear.
u As matters stand, however, we regret that we cannot do so and are returning your
CRI with this letter. We are sorry to have to disappoint you.
u We are sorry we did not make ourselves clear.
u I mention the foregoing because I would not like you to think that failure to settle
your account at the right time was in any way intentional.
u We hope you will understand when I explain that we conduct our business on very
narrow profit margins, which we cannot reduce.
u Please excuse my unintentional delay in replying to you.
Please accept my sincere apology for not answering your letter sooner regarding
Hulls 4001/12.
u Once more please apologize for oversight in wringing to you.
u We are making every effort to resume production and fully expect to be able to
deliver the shavers by the end of this month. Meanwhile, we apologize for the
delay ad trust it will not cause you serious inconvenience.
u We regret tardiness in responding to your telex and hope this answers your
questions.
u You have always been considerate in your dealing with us and know we can reply
you to consider our present request with understanding and sympathy.
u I am sure you will realize that the fire has presented me with serious problems.
u We very much regret the need to increase the charge for tour holidays, but for the
reasons mentioned I am afraid we have other choice.
u We always dislike refusing requests of any kind from owner, but regret that on
this occasion we have no choice but to do so. All orders, including your own, have
already been made up and are now awaiting dispatch. I hope therefore you will
understand why we must hold you to your contract. Have we received your
request earlier we should have been able, and would have been glad to help you.
u Despite our inability to offer you a lower price, we still hope you will give us the
opportunity to do so.
u It is very unfortunate that there should have been any misunderstanding, but we
hope you will forget it has caused.
72
u Your patience with our delays in providing information requested is appreciated.

u We promise you that we are making every effort to put this matter right and hope
you will understand that it is due entirely to causes outside our control.
u We are indeed sorry not to be able to meet your requirement immediately and
hope that in the circumstances. you will bear with us.
u Meanwhile, we apologize for the delay and hope you will understand that it is
entirely to causes outside our control.
u If, having given further thought to the matter, you feel you cannot accept our
effort, we hope it will not prevent you from approaching us on some other
occasion.
u We very much regret the delayed delivery and the inconvenience it is causing you.
We have already taken the matter up with the shipping company at this end and
as soon as we have any information for you we will let you know.
Meanwhile, may we suggest that you make similar inquiries at your end.
73
Close 12 : Complimentary Closing

u With all good wishes for a happy and prosperitious new year, I remain.
Please accept our most sincerely wishes for a Merry Christmas and happy and
healthy new years in 1987.
Have a merry X-mas and best wishes for 1986.
u We are glad to have been of service.
u Thank you for your time and effort in this matter. We look forward to a smooth
and expeditious clearance.
u Looking forward to a good cooperation, we are waiting for your reply to the
above.
u I shall appreciate your answers to these questions.
u We would appreciate your timely delivery of above equipment to the yard.
u We thank you for this opportunity to serve you.
u We hope no difficulty will arise in connection with the insurance claim and thank
you in advance for your trouble on our behalf.
u We look forward to the pleasure of serving you again.
u We take this opportunity to express our thanks for your custom in the past and
hope the new arrangement will lead to still higher standards in the service you
provide.
u These will be no falling off in the standards of service we have always tried to
maintain and we believe successful.
u We shall certainly do everything possible to ensure that the firm's present
standards of service are maintained.
u We appreciate your participation in the finalization of the ancillary delivery
documents.
u We ask you to accept in advance our thanks for any help you can give us.
u We shall be very grateful indeed for your help.
u You may rely upon our continued efforts to give you the same high standard of
service as in the past.
u We would welcome the opportunity to serve you.
u SF has appreciated the prompt and efficient manner in which you have handled
the review procedure, and it has been a pleasure working with you.
u Your assistance in this matter will by greatly appreciated.
u Thank you for your time effort and cooperation in this matter.
u Your kind cooperation in this matter is duly requested and will insure for a most
efficient management of these projects.
u Thank you in advance for taking time out of your busy schedule.
u Your cooperation in this matter will be greatly appreciated and should help the
smooth running of this project.
74
Close 13 : Mutual Interest

u It is strongly suggested that an early start to cleaning subsequent ships and
continual emphasis on general cleanliness are in the best interests of all concerned.
u As a matter of information if Rig 140 Bi-M system held in Houston for future
testing, it might be in our best interest to have Tom travel earlier and relieve you
so you can travel to Korea for onsite experience.
u We are hopeful that we will be able to discuss these problems and that SF and DW
can arrive at a mutually satisfactory plan to accomplish our mutual goals.
u If you may not be aware of the wide range of goods we deal in, we are enclosing a
copy of our catalogue and hope that our handling of this your first order with us
will lead to further business between us and mark the beginning of a happy
working relationship.
u We hope that in handling this, your first, transaction with us shall not in any way
disappoint you.
u We look forward to continuing our pleasant working relationship with your good
selves.
u We will continue to cooperate with you to speed up ABS and USCG plan approval
and we are confident that with our coordinated efforts we will be able to avoid
any future problems.
u We trust that you will find our comments and recommendations to be of interest
and value to you and to your company. We will be happy to discuss these with you
by telephone or in person at a time mutually convenient.
u We suggest this because we wish to continue to handle your business at a level
that will make it worth while for both of us.
We look forward to your reply and assure you that whatever you decide we shall
make the special effort which presents call for.
u This I am afraid is the only suggestion I can make that is likely to be of any use.
u It is, after all, in all parties best interest to have the remaining vessels delivered in
a safe and seaworthy condition.
75
Model Letters for Contract Management Dept.

Subj. 1 : Chemical Tankers - Pitting of Cargo Tanks
We acknowledge and note your telexes GKP274 and 275, both of the 27th August
regarding the main engine bearings and pitting of cargo tanks.
It seems to us that you are constantly trying to cloud situation by writing very
carefully worded exaggerated complaints to create an impression that the integrity of
your ship is in grave doubt. We also note that your complaints are liberally laced with
suggestions that almost each and every one could be the basis for you not accepting
delivery. presumably you are attempting to set a scenario to either place pressure upon
us for some undisclosed reason or to later intentions are, we feel that the resulting noise
is not conducive to completion of satisfactory ships.
To set the record straight, let us remind you that our duty is to build in accordance
with the contractually defined specification and the rules of the class/regulatory bodies.
On completion, the issue of the relevant certificates by the appropriate bodies is
evidence of our fulfilling our obligations. S/N in not one of these bodies.
All stage of the work including all corrections are carried out to the satisfaction of
the classification society surveyor.
It is therefore considered to be unnecessary for you to become overly concerned with
each arising detail.
You are assured that we will take all necessary steps to fulfill our obligations and to
utilize whatever resources are decided necessary to do so.
We feel that you are raising many items which can be more readily dealt with at
local level and after all, you have your team on the spot and we are sure you are kept
fully informed.
We hope for your understandings and cooperation on these matters.
76
Subj. 2 : Center Tanks Repairs

We do not share you apparent anxiety expressed therein. We do not envisage any
difficulties tendering delivery of the vessel in accordance with contract specifications
within the contractual timescale.
With that in view we will continue to cooperate with you and in particular with your
representatives at our yard and with all relevant third parties in accordance with the
contract.
We note you state that you reserve your rights. we are uncertain to which rights you
refer and in what manner you are purporting to reserve them. We await your
clarification of this.
We would be obliged if you would also clarify to what precisely you refer as new
ship criteria.
Finally, we would appreciate your clarification of the following matters from the
second paragraph of your telex relating to the main engine bearings.
From what part of the contract specification is the reference to new derived ?
Precisely what terms of the contract justify the conclusion that this is essential for
you to accept delivery of Hull 2007 ?
Subj. 3 : Chemical Tankers

We feel that some of your D. K. points may be regarded as contentious and so
inappropriate bearing in mind that the problem of stainless steel pitting is expressly
provided for in the memo of settlement and also that such exchanges are rarely as
helpful in the cold light of arbitration as they seem to be when one is writing them.
In particular whilst class society will issue certificates as to class and the other
bodies will do so for the various matters referred to them in spec. we assume that there
are many other matters which are not specifically referred to named bodies. In such
cases arbitration is provided for if there is an insoluble dispute.
If the above is correct Stolt's observation on defects will be taken into account. It is
good tactics to let Stolt be the only party overstating their position.
In the telex relating to pitting we did not note any reference to cancellation.
77
Subj. 4 : Permissible Delay - Due to Hair Cracks

However, we have found that the work content is bound to be considerable and the
nature of the work causes it to be slow and labor intensive. Both sides of each plate must
be 100 examined, repaired and re-examined. In handling and turning each plate, we
must exercise extreme care to avoid further damage and deformation.
We very much regret that this situation will have an impact on the construction
schedule and final project delivery but at this stage, we are unable to advise its extent.
In accordance with Art. II of the contract, these circumstances are defined as
reasons of force major and therefore we must request that you accept this telex as notice
of delay as defined by para 2 of Art. II.
The extent of permissible delay required will be advised as soon as possible after full
quantification but in the meantime, please be assured we will be in touch to keep you
informed.
We look for your understanding and early acceptance in principle of this situation.
Subj. 5 : Engineering Change Order

Submitted herewith is the engineering change order which covers the additional
engineering work for HVAC system.
As requested by the owner via revised level II drawing schedules, additional
drawings represent work which is outside the scope of our original contract.
Appendix "A" contains the letter requesting the expansion of the HVAC workscope.
Appendix "B" defines further the details of the expanded and original workscope
along with the estimate of additional manhours and costs required to accomplish the
HVAC work.
In the interests of ensuring that the drawing schedule is maintained, we already
started the HVAC work and are now approximately 25 % complete. We have done on
the assumption that owner would authorize the additional work as a change order under
our engineering agreement with owner. However, so that we can continue on a more
solid contractual basis, we would appreciate your formal agreement to the terms of the
letter as soon as possible and in any event, no later than 20 November 1981.
Thank you in advance for your prompt reply.
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Subj. 6 : Engineering Work

We have reviewed your referenced letter and all of the enclosures forwarded
therewith. In order to properly respond, we have developed and included herewith a
report, Exhibit I entitled "Summary of schedule impact".
Exhibit I displays each drawings and makes a companies between the actual rev.O
delivery dates and the adjusted rev. O schedule dates.
These delays were not factored into our analysis because the impacts due to these
factors were not readily assessable in terms of individual drawing schedule. These events,
which are listed below, do however, represent real and significant delays to the level II
design effort.
In closing, I must respectfully say that when approved schedule revisions and events
beyond our control are considered, we have more than meet the obligations and the
intent of the agreement and that there is no basis for the comments and concerns
expressed in your referenced letter.
I sincerely hope and request that this subject can now be considered closed so that
both parties can concentrate their efforts on bringing this project to a successful
conclusion.
Subj. 7 : Notice of Force Major

This is to advise you of the occurrence of a force major event, which will result in a
permissible delay, due to the unexpected completion delay of the level 2 drawings.
We have, therefore, carefully analyzed the impact of the new drawing release
schedule on our yard construction schedule, and arrived at the conclusion that, with our
maximum effort to minimize any adverse effect, it is inevitable for us to readjust the
delivery date of hull 4003 from the originally scheduled November 15 to December 31.
Although we are deeply disappointed and chagrined by this unfortunate force major
situation, we cannot help requesting you to recognize the aforesaid force major event
occurred beyond the control of Daewoo and to approve the adjustment of the delivery
date.
One minor consolation is ,however, we can assure you that the contract delivery date
of Hull 4004 will not be adversely affected by this force major occurrence.
We would appreciate your kind consideration and prompt response to our request.
Subj. 8 : Lloyds Agreement

79
We are completely flabbergasted by the egregiously untruthful contents of your

subject telex.
As you trust that your request for us to sign the Lloyds agreement was founded upon
wrong information, we will for the moment refrain from making any comments
reflecting the inpropriety and unprofessionalism normally employed by a certain breed
of parasites.
Accordingly, I would like to suggest you to first find the true facts before there
would be any unwarranted damage to the good reputation and image that your company,
as we believe enjoys.
Subj. 9 : Rig 135 Reaving

We refer to your letter of August 29th which responds to our letter of August 28th
regarding the subject.
Your reply was couched in terms indicative of offense and as we have no wish to be
antagonistic, we have carefully rechecked our letter to ensure that it was reasonable.
We have been surprised to find little or no connection to you response which is
almost entirely about final reaving which was not mentioned by us.
To clarify the entire matter, we reiterate the facts are we see them :
The important aspects are covered in para 1 and 2 . We have completed our work to
Spec. and therefore your request will cause extra work, time.
We respect our earlier statement that we are not prepared to undertake this change
without your written commitment to accept all implement.
We would therefore advise that we consider our stance to be reasonable and
certainly not conductive to your stated objections.
80
Subj. 10 : Change Order Request

For some weeks now we have been in discussion with Santa Fe concerning a final agreed
delivery schedule and we have pressed forward with the maximum amount of men and effort to
achieve the best result for all parties.
One of the major problems we have encountered lately, has been meeting the
requirements of the C.R.I and the change order items raised by you. It has always been
our intention to deliver a rig to you which is as free of defects as possible, and to that
end we have been working on all agreed correction request items which you have raised.
You will appreciate that raising additional change orders at this very late stage will
result in further delay, interference with other work, and possibly additional CRI, in
fact a cycle of events which has no apparent ending. This together with the problems we
have to gain agreement on the price of the job, leads us to the conclusion that we cannot
accept your request on this occasion, nor can we accept any further change orders.
We request your understanding of this matter.
Subj. 11 : Santa Fe Rigs 135/140

We were very pleased to deliver in reasonable condition, Rig 135 into your hands on June
30th, 1983 to concludes this project in a manner which we sincerely hope you found satisfactory.
It is our desire to place on record our appreciation for the contributions given by Mr.
J. Thrane, Mr. T. Manaley and Mr. Moonjial, Particularly during the late stages of
smoothing out diverse opinions and concluding final settlement.
Whilst many people made unstilted efforts during the construction period, our
special regards must be paid to Mr. P. Howell for his enthusiasm and dedication to his
work. He always maintains a high priority for sustaining good relationships with
Daewoo.
As you know, we are at this moment working very hard in the final stages of
completion of Rig 140. It is our genuine belief that experiences gained on Rig 135 and on
other contracts are now working to your advantages and will result in Rig 140 being
superior to any other so par produced by us.
We look forward to the continuation of your peoples co-operation during this final
period and hope for further opportunities to extend our close relationships in the future.
Subj. 12 : Compensation for Delay for Santa Fe Rigs 135/140

We are pleased to have you once more assisting in the amicable final settlement of your rig
81
and as requested, we now supply you with confirmation and more detail of various factors
discussed to date.
The mark-up of our requirements for compensation of delay in as follows :
It must be noted that the facility charge is intended to cover the effective rental for
loss of use as well as the availability of equipment and labor.
Bearing in mind the extremely high capital invested and the premium space occupied,
we consider this figure to be much lower than really required but this is intended to
reflect the mutually cooperative business we have shared.
Considering now the late receipt of critical materials and equipment. Quite apart
from the obvious lateness caused to the directly dependent activities, the effects have
been diverse and varied from insidious erosion of performance to immediately
identifiable consequential losses.
One prime example of the latter is the postponement of the intended sea trials in
early September caused by lack of O.F.E. The weather at that time was perfect but the
postponement led us to a period of typhoon activity which forced the return of the rig
from its trials and resulted in weather delay.
Erosion of performance was caused by waiting time, disruption and fading effects or
loss of inertia. Inefficient utilization and excessive mobilization/ demobilization of
resources were the natural conclusion.
Having already completed work on Rig 135, we did not anticipate more than a few
minor additional changes on Rig 140. We were therefore surprised to find ourselves in
receipt of a further 43 changes amounting to an additional 89,450 manhours of work.
Included in these are Halon fittings for which we have already requested a 25 days
extension, duct valve for which we asked 10 days, towing bridle for which we requested
a further 8 days.
Attached for your consideration are two schedules, one showing latenesses in
delivery of OFE, the other showing late availability of vendors service engineers. In both
lists, the significant items have been underlined.
As you are aware from our discussions, a very great number of other factors
including electrical work, also had a direct bearing on project delays.
However, as you know, now only is it now impracticable, it is to neither parties benefit
to go into all the details at this stage.
Suffice it to say that we can demonstrate delays to your account of in excess of 40
days and therefore we believe we are more than reasonable in seeking compensation for
such delays to commence on the lst October 1983.
We hope that now you have been given the opportunity to consider the facts, that
you will accept not only the quoted rate, but also its commencement date. In both cases,
because of our appreciation for our business relationships, we are asking for much less
than we feel we could justify.
We look forward to your early favorable response.
Subj. 13 : Rig 135/140 Painting Spec.

I am in receipt of your above referenced letter and I basically agree with its content.
82
In the spirit of fairness, I would like to ask you how Daewoo might handle this
situation if our rolls were reversed, I.E, if Daewoo were in SF's opinion.
In my opinion, and in view of the fact that SF has agreed that DW shall only be required
to apply 2 coats, I think that DW should give further consideration to the price they
have charged for change order no. 4 to sandblast and repaint JP tanks.
I suggest that if DW deems it appropriate, that they extend a credit to SF which is to be
applied against this change order.
I will leave this matter strictly in your hands and whatever decision D/W make, I
will accept it as final and not bring this matter up again. My only request is that you
look at this issue with an open mind and treat it in a fair manner and recall that SF has
agreed to the above spec. interpretation on both Hulls.
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Subj. 14 : Delivery Delay of SF 135

Further to our letter of January 28, 1983, we must regretfully inform you that the
accumulation of changes over the history of this contract has exceeded our capacity for their
absorption. As a result. We are currently preparing a request for a formal extension to the
delivery date.
Whilst we are still compiling the actual quantified dossier, as a preliminary
statement we can advise that our initial assessment indicates an actual delay of around
75 days in real terms, but that this will be subject to confirmation or adjustment when
our deliberations are finalized.
1. Engineering delays by SF E.C. adversely affected our early production schedule.
Various earlier communications refer to this problem which seriously impaired
our production activities and its magnitude was described at various meetings in
the early stage of production.
2. Introduction of a considerable number of change orders has caused a very
substantial increase in the required manhour content of the work. Some idea of
the scale of the problem can be gained from the fact that approximately 120
identifiable individual changes have incurred. A number have yet to be agreed
but already we have accumulated approximately 250,000 accountable direct
M/H, The indirect manhours are in addition to this and each change usually
caused additional engineering, technical lead time, material lead time, inspection
time, and disruption to some degree of other works.
This has been partially recovered by utilizing increased resources but this
solution was limited by the amount of available labor and also the
impracticability of applying more than saturation levels of manpower to specific
operations.
3. Delays to delivery of OFE have occurred with resulting damage to our schedule.
We are checking out and preparing a list of these items for analysis.
We apologize for the fact that we are not yet in a position to finalize these items but we
are sure that you realize the extent of back up checking work required.
In the meantime, we feel that this preliminary information should be given to you
without delay for your consideration.
In this regard, we feel that this preliminary information should be given to you without
delay for your consideration.
In this regard, we are looking forward to your reasonable consideration and of you wish
to have a discussion with us to clarify this matter we are at you disposal.
84
Subj. 15 : Rig 135 + 140

We have greatly appreciated the cooperation and relationships established by yourself, Mr.
Manley, Mr. Moonjian, and Mr. Howell during the project period on these Rigs. As a small
token of our(gesture) gratitude, we have therefore taken the step of recording the fact with your
President by separate letter.
However, these in unfortunately another matter which we need to bring to your
attention. We must reluctantly confess that we have been a little disappointed with the
attitude of Mr. Sparks. On a technical point, we consider his ability, knowledge and
drive for achievement of good quality work to be a notable asset to the project. However,
in this case, this is overshadowed by an attitude which could be described as
overbearing and which is staining relations with our personnel at all levels to an
intolerable point.
It is far from our wishes that Mr. Sparks should be penalized in any way and we
would therefore prefer not to here place on record any specific incidents.
Obviously, we can discuss them with you if you so desire but we feel that of would be
sufficient and in our best interests if he could perhaps be promoted to a post elsewhere
or at the very least, transferred from okpo shipyard as quickly as possible.
We are extremely sorry to have to make this request but hope for your deep
understanding and continued cooperation for the successful completion of Rig 140.
Subj. 16 : Abnormal Weather Conditions

We regret to advise you that current spell of excessively hot weather which commenced
around July 17th is having an adverse effect on our production scheduling.
Temperatures have already matched records for the last forty years and as yet, are
continuing unabated. We feel you must agree that this is completely beyond what we
could have reasonably expected and is certainly outside our control.
We therefore must place on record that the resultant delay to the project is a force
major situation and will ultimately reflect in a deferment to the contractual delivery
date.
The heat is not directly effecting all operations but in certain areas, it is causing
serious disruptions by drastically slowing the work. In some locations, we are changing
over operatives every 20/30 minute and yet still this does not restore anything like
reasonable productivity.
The overall effects on schedule are disruption, delay, lack of productivity, and
excessive labor costs and can only be fully assessed when the current beat wave ended.
We will advise you of the full implications as soon as possible but in the meantime,
give you our assurance that we will continue to minimize the final delay as far as
possible.
85
Subj. 17 : To whom it may be concerned

This letter is to certify that Mr. Kim, is an employee of DSHM, located at Koje Island in
Korea. All employees of this company are duly insured. He is now seconded temporarily as a
G/E for SF Rig 135, although the terms above are unchanged.
His resume is as follows :
We would appreciate if you would accept the attached copies which are in the
Korean language, legal proof of the above statements of fact.
Subj. 18 : Deliver Date for U.S.Lines vessels

We appreciate and have considered carefully your letter dated 1st 12, 1983.
Since we believe we have already discussed the topics in depth, either verbally or in
writing, we cannot justify the reason why we should again debate the details of the
whole spectrum of the concerned areas. Accordingly we briefly summarize Daewoo's
position as follows :
First, we must ask you to share the common recognition that both parties had
foreseen the reasonable and practical completion date for Rig 140 would be end of
August. That was why both parties had agreed the amendment of contract changing the
delivery date to the end of August.
However, regardless of our previous expectations, we now see that the possible
delivery and acceptance date will actually be around lst of November 1983.
We are not going insist that this delay is caused solely by SF, but we are looking for a
reasonable admittance of a fair portion of responsibility by SF.
We confess that we are not able to qualify the exact extent of mutual responsibility.
We feel, however that the present burden would not have been with us if ...
a) b) c)
We ask you due reconsideration of the above, and request that you accept our most
humble suggestion that Daewoo absorbs the loss incurred by late completion during the
period of 1st September to 30 September, and then SF compensates on and after the 1st
of October until the day of final delivery and acceptance at a daily rate of USD 20,000.
We look to you for reasonable reassessment of the situation together with proper
and positive actions to deviate the present problems.
Finally, we would like to point out that whilst we have no wish to be anything other
than cooperative in any respect, the above situations are forced upon us by a realistic
assessment of feasibilities.
However, we feel that we should also point out, as already described by a separate
letter, that a cut off for design changes is long overdue. We consider it to be somewhat
unrealistic to continue to draw out the further additional it to be somewhat unrealistic
to continue to draw out the further additional work can therefore be considered
separately and fairly.
86
Subj. 19 : Vendors Service Engineers

We thank you for your attendance and efforts on working towards an amicable
settlement of accounts on Rig 140. However, in the light of recent of OFE, we feel it
necessary to place the following comments on record.
It must be noted that apart from the word "reasonable", no time limit for such
attendance is defined.
Purchase orders place with the various Vendors contain an allowance for their rep.
in site but we were not party to the negotiations and therefore can accept no
responsibility for the adequacy or otherwise of the resulting allowances.
Furthermore, whilst we are always willing to accept liabilities which fairly belong to
us we must advise that this does not include guaranteeing efficient utilization of vendors
rep. at any time not specially request by us. Where owners have invited service
engineers without prior consultation with us, it must be at owner's risk.
We hope the above comments satisfactorily clarify some of the issues now being
raised.
The following shall be deemed to be reimbursable costs when incurred by SF or its
employees in the performance of its obligations hereunder.
87
Subj. 20 : Snow Ball Effect

As you are aware, we have pointed out souring our meetings on many occasions, that
changes to our scope of work have an adverse effect on our production and place at risk,
the planned completion date.
On this project, we have received a large number of changes continuously
throughout its entire duration. Even at this late stage, the introduction of variations is a
practice which is still persisting.
It naturally follows, that our planned work schedule has been disrupted and efficient
utilization of resources has been frequently disturbed.
It should be noted that the collective influence of a number of even small changes
have a :snow ball" effect which results in disproportionally high problems.
Time to completion is no relatively small and whilst we have been able to absorb
considerable disruptions in the past by utilizing the flexibility given by redirection of
large blocks of labor, these resources are not without limit.
We believe that we are now at the critical point where we are no longer able to
achieve flexibility from transfer of labor, particularly, as we are giving peak outfitting
activities with virtually saturation manning.
At the moment, we are evaluating in detail our present portion to establish the
degree of delay already existing from the accumulative effect of present variations. We
believe that we currently have a situation giving a delay in excess of several weeks but
we will communicate further in "in line" delays which will be additional to the present
delay.
However, we give you our assurances that we will continue to cooperate and work
with maximum effort to minimize any delay.
We trust you understand our position.
88
Subj. 21 : Outstanding Equipment for Santa Fe Rig 135

SF is hopeful that you will be able to generate renewed enthusiasm with the Daewoo
production and eng. people involved, so that a timely list of work items.
If you send us the supporting documents or information connected with the
outstanding equipment, it will assist us to expedite the credit for you.
Tour request for more than 1% handling charges is noted and accepted for their
items you supplied in a timely manner. However, we feel you must agree that it would be
unreasonable for us to pay air transport etc. in items which you delivered very late. We
believe we have already been sufficiently penalized for these.
Notwithstanding the foregoing, the parties to the referenced contract may deviate
from the above obligation to the extent actual delay is necessitated by change orders or
delays in the delivery of OFE, written document signed by all of them.
These delivery dates were reviewed in conjunction with this production schedule and
it is our opinion that the revised OFE delivery dates are comparable with this
production schedule.
Subj. 22: O.F.E

In response to your inquiry of March 23, we concur with your interpretation.
Although similar language is not included in the Rig 135 contract, by virtue of the
fact the contracting price includes items generally referred to as owner furnished
equipment, the same principle prevails.
This is supported by the fact that both the Rig 140 and Rig 135 contracts stipulate
the OFE type items are to be insured by Daewoo at its own cost at all times after
delivery to the shipyard.
I believe the contents of the spec are supportive of this interpretation, although such
a reference should be unnecessary since the construction contract is the primary
governing instruction.
Subj. 23 : Option Agreement

Buyer shall have an unqualified option execrable at any time through and including
the 30th day following the execution of this agreement.
Buyer shall have a qualified right to assign this Agreement and the options granted
hereunder to other parties upon the written consent of the Builder, which cinsent shall
not withheld.
Notwithstanding the foregoing, the parties to the referenced contract may deviate
from the above obligation to the extent actual delay is necessitated are memorialized in a
written document signed by all of them.
89
Subj. 24 : Amendment of Contract

We would like to confirm the following agreement recently reached at the meeting in
our Okpo office in respect to the contract for the construction and sale of one rig dated
Feb 3, 1981, as amended, between our companies.
It is mutually understood and agreed that in account of the extra work for the
change in the specification, the delivery date for the vessel (Hull 4004) as referred to in
Art II of the contract, as amended and adjusted, shall be postponed by an additional one
and a half months.
Accordingly, the delivery date for the vessel shall be Oct 15, 1984
If the above correctly reflects our agreement, please execute one copy of this letter
and return same to us.
Agreed and Accepted this
8th day of Aug. 1983
Subj. 25 : Sideletter Agreement

This letter will serve to memorialize the understanding and agreement between our
respective concerns in relation to the actual adjusted contract delivery date for our Rig
140 (your Hull No.3004)
For purpose of facilitating our internal considerations, we would like to request that
your acknowledge a letter agreement in the form annexed hereto containing certain
recitals regarding the contract delivery date.
In consideration for your compliance with our request, it is mutually acknowledge
and agreed that notwithstanding anything to the contract contained in said pursuant to
Art VII of the contract dated April 30, 1983, as amended, including all agreed
adjustment to date for change order and associated matter is established to be August 31,
1983.
It is our further understanding that the letter in the form annexed hereto is to be
employed for purpose of facilitating our internal considerations, is not otherwise to be
disseminated, and shall have no binding effect between our respective companies or the
Daewoo corporation.
90
Subj. 26 : Shuttle Tanker Delivery

In connection with above Shuttle Tanker now under construction, chartered would
like to give his view regarding progress of the project.
As emphasized during contract negotiation between our company and Statoil, as
operator of I/S Gullfaks the day of delivery for the vessel is of paramount importance
for this company. We have to a large extent fixed our commercial arrangements based
on punctual delivery of your newbuilding, as well as the two other newbuildings. In case
the newbuilding is delayed from the yard, this will cause extensive negative
consequences for production and sale of crude oils.
We appreciate that the building period for your newbuilding at DHI is rather short
for a ship actual size and complexity. However, Statoil puts great emphasis on date of
delivery in this project and time of delivery was of vital importance for the final
selection of ship owning company.
Therefore, we assume that date of delivery for your newbuilding at DHI is based in
realistic conditions and that we can feel safe for having the ship to our disposal at
contractual date.
This should be a good platform for reaching our common goal and thereby secure
another ship or two for Statoil to be decided within 1985.
Subj. 27 : Shuttle Tanker Delivery

I acknowledge receipt of your telex of April 12, and thank you for your kind thought.
Like you, I also hope for a meeting with you at the earliest opportunity and a
preferably looking forward to greeting you in Korea.
Even without consideration of the attachment to your telex, I fully appreciate the
importance of your schedule. You may also be assured that every responsible member of
Daewoo shares that knowledge and is aware of my interest.
It would be irresponsible of me to give you a too optimistic assurance since your
schedule is too tight.
However, I can tell you that my people realize the difficulties but believe the
schedule to be fully viable and I can assure you that we will do everything in our power
to ensure the required delivery is met. You will no doubt realize that closely knit
teamwork is essential to success and I believe I can count on you to instruct your site
team to maintain close contact with their counterparts and for them also to actively
assist us save time at every opportunity.
I look forward to a successful project.
Subj. 28 : Reminder Notice

91
This thirty-day notice is being sent to you as a reminder of our previous

correspondence. The original letter is reproduced below and your prompt attention is
respectfully requested. If you have already complied with our request, please disregard
this notice.
You may transfer shares from the above referenced account by following the
instructions provided below and signing the form exactly as the account is now
registered. If the account is registered with joint tenants, all tenants must sign.
The signature(s) must be guaranteed by a commercial bank or trust company or by a
member firm of a domestic stock exchange. A signature guarantee by a saving and load
or notarization by a notary public is not acceptable.
If any of the shares to be transferred are in certificate form, the certificates must be
returned with this letter. The certificate need not be endorsed although we do
recommend sending them in by registered mail to :
Address
To insure prompt alternation, please detach and return this portion, with your
correspondence, in the enclosed window envelope.
Subj. 29 : Correspondence Identification

We have received your communication of June 2, 1987 which refers to outstanding
accounts.
Unfortunately you have failed to give us a reference to which Department of our
company, your previous communications were sent.
You will appreciate that this is a large company and this means we are unable to
identify which Department should be handling this matter.
It is also noted that your communication of June 2, 1987 carries no reference, no
purchase order, and no typed identification of the person who sent it, only an illegible
signature.
We hope therefore for your further advice on this matter and trust that this problem
can be avoided on the future.
92
Subj. 30 : Labour Disputes 1

As you will already be aware, we have in the few days experienced some few problems
with the workforce and I would therefore like to appraise you of the fads and set your
mind at rest on the possible consequences.
In common with the present national movement in Korea, the employees have elected
to establish a workers association a similar in nature to those used in most western
countries.
In principle, the management has no objections to this and in fact, even welcome the
idea as having potential benefits.
I am pleased to be able to advise you that our initial negotiation for restoration of good
order have now been discussed, and that production should be back to normal within
next few days.
Just as soon as finally detailed working agreements are amicable finalized between the
parties. Even now, I can promise that there is no cause for concern about the well being
of your representatives and families.
In addition, I am very hopeful that we will be capable of completely absorbing the
impact of this situation and will certainly do our very best to do so. However, just as
soon as we can conclude our detailed assessments, this will be the subject of further
communication.
In the meantime, I must ask for your tolerance and understanding of our position and
as already stated I am very optimistic that there will be no real disadvantage to your
project.
93

With reference to our tax dated on August 11, 1987 concerning labor disputes and
possible consequences, we would like to give you herewith a further interim progress
report about the present situation where we are facing.
Last week was characterized as days of escalating the strikes and sabotages
nationwide through all fields of industry where different aspects of disputes including
sit-in demonstration, blockades and sporadically riots are being shown according to
each company and some of them have decided to suspend its operation for some time
because of no solution yet, and we are not exception from this either.
Our company originally planned to resume works from today with the assumption
that the negotiations with labor side to elect their representatives to lead the meeting
with management, we had to extend the temporary closure for the time being.
As a result of our continuous efforts, nevertheless, the negotiation reopened from
yesterday and laboursstart signing their good will to halt the strikes and to seek the
conciliatory compromise with management. Although we can hardly forecast at the
moment when exactly the works get back to normal, it goes without saying that we will
spare no endeavors at all to resume all operation soonest possible.
Taking this opportunity, we apologize again for any adverse effect to our construction
schedule for your vessel owing this force major situation and we will keep you closely
informed of any progress thereon shortly after the clear picture is featured.

We have the pleasure of informing you among other things that our labor disputes
ended up with wage increase settlement dramatically reached by our normal operation
from August 31, 1987.
Looking back upon last few days, all of us quite worried about the situation in fact
when the labor disturbances were getting fierce.
However, our continuous efforts to persuade them. showing the seriousness to
harmonize and compromise with their request, brought about turning point of
circumstances and eventually managed to reach such settlement.
Although there are still some minor matters to be cleared, we are optimistic about the
present situation, since the major issue was settled down as reported.
We will further inform you about the possible impact to the delivery of your project,
if any, after perusal.
We are particularly pleased to inform you that your site representative was ready to
come back their routine work safely.

94
Further to our previous correspondence, we regret to advise you that the current spell
of labor disputes nationwide throughout all fields of industry makes our overall
shipbuilding schedule undergo a drastic change.
On all projects of our shipyard, planned work schedules have been completely
disrupted throughout the entire duration of our yard's labor disputes which commenced
August 8, 1987. Even at this time, the disputes outside our yard are still persisting.
A great number of our sub-contractors who supply vital equipment and material
advised us that their on-time delivery is in jeopardy, which has a direct bearing on your
project delays, However, as you know, not only it now impracticable, it is to neither
party's benefit to go into all the details at this stage.
As you are well aware, punctual delivery of all projects in our yard has been
frustrated by this unfortunate event and we are at the critical point where we are unable
to achieve flexibility and feasibility from transfer or redirection of labor and new
allocation of resources. These resources are not without limit.
In this light, we have no choice but to revise our overall production program and
batch schedule.
As the impact on the schedule of your newbuildings has been reviewed in conjunction
with the previous production program and the new program under development, we
must ask you to share the common recognition that both parties now foresee the
practical completion dates for Hulls 5017/27/29 to be extended 20 days. Additionally all
key event dates are scheduled to be postponed around one month according to our new
program.
One minor solace is, however, that the scheduled completion fate for Hull December,
1988 are within each contractual delivery date. However, we cannot assure you at this
stage that we will be able to meet the contractual delivery dates without having free float
on the schedules.
We regret having to make this request but in the meantime, give you our assurance
that we will continue to minimize the final delay as far as possible.
95

Further to our previous telexes, we are pleased to advise you of the ending of a force
major event, which results in a permissible delay, due to the recent labor disputes.
We resumed the operation of the yard from August 31, 1987, it must regretfully
inform you that the accumulation of the impact on the construction schedule of your
newbuildings have exceeded our capacity for their absorption and the collective effect of
a number of our sub-contractor in process of labor disputes are making matters worse.
Whilst we are still collecting the influence and compiling the actual quantified dossier
relative to the labor disputes of our yard and our sub-contractors, as a preliminary
statement we can advise that our initial assessment indicates a very adverse impact on
our construction of adjustment when our evaluation of various aspects is finalized.
We apologize for the fact that we are now yet in a position to finalize these items but
we are sure that you realize the extent of back-up checking work required.
In the meantime, we feel that this preliminary information should be given to you
without delay for your consideration.
Although we are deeply disappointed and chagrined by the unfortunate force major
situation, we cannot help requesting you to recognize the aforesaid impact in the
construction schedule occurred beyond our control. However, we give you our assurance
that we will continue to cooperate and work with maximum effort to minimize any
further delay.

In follow-up to our previous correspondence regarding labor disputes nationwide
through all field of industry, we were regretfully informed from our sub-contractors
that the on-time delivery of some equipment for Hulls 5017/27 will be jeopardized by the
labor disputes.
We have checked the delivery schedule of critical equipment and include herewith a
table entitled "Delay in delivery of equipment" on the basis of information currently
available.
The table attached is, however, that when these delays and other insignificant delays
will be factored into our analysis of the impact on our shipbuilding schedule due to the
labor disputes in our company, most of them may be diminishable.
We are sorry to give the above information but hope for your deep understanding and
continued cooperation to minimize the negative impact.

We are in receipt of your tax and cannot agree with your interpretations as stated
96
therein.
You were given notice of the commencement and termination of force major event in
our yard within the prescribed 7 days and were advised that the full impact was now
made available until after a few days had elapsed from August 31.
As you are well aware, all office members and site managerial staff were now allowed
to enter the shipyard and accordingly were blinded off during the whole period of labor
disputes. After reopening of the yard, we have had many difficulties in grasping. and
collecting the effects of the disputes within a few days due to the severity of damage to
our facilities including office appliances, loss of documents and data, and forced us to
spend substantial further time to collect, evaluate and analyze the damage influences
both from our side and from many sub-contractors for devising the countermeasurement and adjusting our overall production program to effect of minimizing
possible mitigation of impact for the benefit of yourselves.
It is normal practice, and all the other owners take it for granted, that under the
aforesaid circumstances the builder shall carefully review, comprehensively evaluate the
damage effects, and then notify the specific dates of accumulated delivery impact to the
owner as soon as possible, nor is this in any way a failure to comply with the relevant
contractual provisions.
It appears to us that to attitude in this matter is both unjustified and unduly technical.
It will be disturbances of the magnitude and extent of those we have recently suffered in
the Korean industries in such that it is just not possible to give a sensible and definitive
evaluation of the effect on delivery in as little as seven days.
We would like to know purpose you think would have been served by our making an
initially exaggerated claim simply in order to protect what you appear to be saying, in
equivalent to a time limit.
We trust that in reflection you will look at this situation in a more positive and
practical manner and that you can bear with us under these circumstances.
97

The purpose of this letter is to inform you of recent events which have had an adverse
impact upon your project and our mutually good relationship.
As you know, Korea has undergone of a sometimes violent nature. Our shipyard and
consequently your project was affected by these disturbances resulting in a stoppage of
all yard operations for 23 days between August 8 and August 31, 1987. to complicate
matters, we suffered the effects of a major typhoon in August 31. It took around 7 days
to get back to normal operations after these events.
Our management has endeavored to minimize the effects of these two unavoidable
situations in order to relieve the understandable anxiety of our various owners and to
preserve our good reputation. However, the impact we have suffered is quite substantial
in spite of our best efforts. The financial cost of delayed delivery to us is considerable.
With these facts in mind, it was necessary to reschedule our batch operations and
complete surveys of the project now underway.
Additionally, our sub-contractors have also been affected by their own labor problems
causing further delays in the receipt of vital materials. However, we have decided to
absorb these additional delays to minimize the impact upon our clients.
We have previously requested only 30 days' permissible delay although our actual
impact will represent more than that. We are somewhat distressed, that our request has
been rejected in the basis of our working. We feel that the meaning was quite clear and
fail to understand what possible benefit can accrue to your good selves by rejecting a
legitimate request for a specific amount of permissible delay as the result of "Force
Majeure".
It would be a welcome gesture in your behalf reconsider your position and grant 30
days' permissible delay. To do so would certainly cement our already good relations and
considerably ease the burden of these unfortunate events.
98

We acknowledge your tax which was response to our tax of September 17, 1987.
Your comments are noted although we feel that such strict literal interpretations of
the contractually defined obligations do now reciprocate our genuine efforts to
positively assist regardless of academic contract terms.
Perhaps the following additional description of our circumstances will help our
mutual understanding in this regard.
Is already intimated, the situation which arose was very serious and denied us access
to records and all date necessary to establish the full effects.
In some areas, we suffered from physical damage to offices and fittings, some files
were destroyed, some were put into considerable disarray, some equipment was damaged
and we had to thoroughly check for possible sabotage, particularly that which may have
been hidden.
Luckily, sabotage has proved to be no problem but considerable time had to be
expended before this could be established.
Until all necessary actions had been taken to rectify these difficulties, it was
impossible to meaningfully coordinate the necessary actions and functions necessary to
accurately establish the full effects of the disputes.
In fact, in addition to this, normal productivity is impossible to achieve immediately at
the onset of the formal return to work and some time is required to achieve this before
revised schedule can be established.
It is our view that whilst the cause of the "Force Mejeure" situation ceased at the time
of the workers return the actual force major circumstances continue until all the above
matters are resolved and a strictly academic interpretation of the contractual obligations
means that notice need not be given until all such matters are settled.
However, it was our heartfelt wish that our clients should now be unnecessarily
burdened by our problems and therefore, even though it was premature, we decided to
limit our claim to the mentioned thirty days. At this time, we could now explicitly
forecast and ignored possible additional effects of delays from sub-contractors such as
KHIC who suffered similar disputes.
It should be noted that the actual total delaying effects are substantially in excess of
our request and that, to be helpful, we accepted considerable risks by making this offer,
particularly as such an early time.
For your information, we enclose the supplementary evidence you requested and this
shows an actual loss of time of 62 days for Hull 5017 and 46 days for Hulls 5027/29
respectively even though we have requested only 30 days.
It also shall be noted that the above effects already have assumed loss of program float
which puts us at great risks if any other unforeseen unfavorable circumstances should
arise.
In this light of the foregoing, we hope for your understanding and early acceptance of
our claim which we believe are highly beneficial to yourselves.
99

We refer to your letter dated 24th September, 1987.
Our principals maintain their view that strictly in accordance with the terms of the
captioned Shipbuilding Contracts you have waived your right to claim extensions of time
for delivery arising from labour disputes, strike and lockout of you or your subcontractors around August, 1987 due to your failure to comply with the terms of the
shipbuilding contracts. They furthermore opine that the construction schedule of Hull
No. 5029 should not be affected at all as a result of such labour disputes etc. since on
this vessel has not commenced.
However, purely as gesture of good will and entirely without prejudice, our principals
are willing to grant you an extension of time delivery of 14 days for Hull Nos. 5017 and
5027 only.
We hope you will find our principal's aforesaid proposal constructive and we await
your confirmation.
Thank you for your kind attention.
100
Subj 40 : Labour Disputes 11

We acknowledge receipt of your letter ref. L/CD/1146/87 of November 19th, 1987
and thank you for your offer.
However, we are not prepared to accept either a fourteen day extension or your
proposed limitation on the number of vessels involved. Our offer of a thirty days
extension was already more than favourable to you and placed us at considerable risk
since the actual implication suffered have been much greater.
To ensure your understanding of the circumstances, we would therefore remind you of
the pertinent facts as follows :
The circumstances suffered were clearly covered by Article VIII, para l as those of
"force major". We assume for the moment that you accept this as a fact.
This clause defines acceptable causes of delay to either the construction of the vessel
of any performance required to fulfill the terms of the contract. It is important that you
kindly note the mention of performance of contractual requirements as well as the direct
effects on construction.
Paragraph 2 of the same Article requires that you be given final notice of the effects of
such a delay within seven days of its ending.
You were given notice within the statutory period by our tax CMD/SGH-T134 of Sep.
4th that the yard had re-opened and the same telex advised you that we were not in a
position to advise you of the exact delay because we had not been able to evaluate the
evaluation of various aspects.
You will no doubt recall that during the yard closure, no communications were
possible with the yard and even after re-opening, the destruction of office fitting and
records meant that it was some time before we could full together all the facts to allow
proper consideration. In addition, it was not possible or safe to immediately recommence yard operation until thorough checks had been made for potential sabotage of
equipment and plant.
It must be noted that our contractual obligations are that we must give you notice
within seven days of the end of the delay, not the immediate again in Aug 31st and you
seem to have incorrectly assumed that this ended the delay.
In the meantime, you were also advised by our telex ref. CMD/SGH-T133 of Sep 4th
that our sub-contractors had been troubled with the same labour problems and that
their actual delays would also have to be considered as permissible delay. The same telex
advised that probable delay would be 30 days.
Our telex ref. CMD/SGH-T134 of Sep 4th confirmed that we still not able to assess the
actual delay.
Our letter ref. CMD/SW/87-017 of Sep 10th confirmed delays of critical subcontractors deliveries of 30 days and also advised that these delays had not yet been
entered into the analysis of delaying factors.
101
Your response was by two telexes, one which said that a claimed delay for any item for
which the delivery date had not arrived was premature cannot be claimed until delivery
date. This is in conflict with your demand for notice in seven days of the delay and
obviously not acceptable.
Your other telex refused to accept the validity of our notice for items with contractual
delivery dates more than seven days in advance of our notice. This logic also is
unacceptable, you were notified of actual delay which is all that is relevant.
The points you appear to be consistently overlooking are that :
1. The delay had not ended and therefore the time limit of seven days had not yet
become operative.
2. The giving of notices within seven days is one of the performances under the contract
which was prevented by the force major circumstances.
On Sep 11th, our telex C MS/SGH-T138 gave you notice that normal operation had
been restored in most respects and advised that the entire docking schedule of the entire
yard had been delayed by one month which was not recoverable. It also advised that
other related factors would also affect delivery but that we would do our best to reduce
these as far as possible.
It requested your acceptances of a delay of 30 days on all vessels since all are subject to
the same one month delay in the docking schedule. We feel sure that you must realize
this is a central key facility which dictates the hard core of every building program and
that it is impossible to construct a vessel without this key facility.
Other delays were mentioned as existing but were not claimed and this means that we
accept the risk for recovering these even though there is no contractual obligation to do
so.
We therefore firmly consider that we have acted responsibly, have conflicted with the
requirements of the contract and have been gone beyond this in our offer.
No sights have been or will be waived by ourselves and we did not anticipate that in
this situation, the owner would try tp evade his responsibilities.
We are prepared, without prejudice to any of our rights, to repeat our offer for an
acceptable delay of 30 days but since this already leaves us with unnecessary risks, we
are not prepared to allow this to be considered as a starting point for negotiation. We
have certain sight which we are not willing to relinquish and see no good reason for
giving additional concessions.
We would be grateful if your would reconsider the position on this matter as soon as
possible.
102
Subj 41: Additional Butt Joints 1

I refer to your of July 20, 1987 but having looking into the matter, I feel that your
concern is perhaps unnecessary.
As you know, it is impossible for us to obtain more than our allocation of Korean steel
and we therefore are compelled to make up the balance of our requirement from
elsewhers.
A further factor is that suppliers from Japanese sources are also restricted and these
days, tend to be cinstantly reduced by the suspension of the operation of the mills.
Quite apart from the commercial necessity, the viability of our overall building
schedules demands the use of steel from South America and the amount allotted to your
project is consistent with other project.
In terms of quality, I am informed that the material is manufactured to the same
international standard and that this is verified by the independent inspection of the
classification society who have already approved the manufacturer.
The additional seams of butts in the use of smaller plates will be automatically welded
and in terms of strength, this allows full strength to be assumed for the joints without
involving any joint factor. In any event, I would be happy for spot NDT checks to be
made to verify this.
In light of the above, I feel that we are still offering you the full commercial
specification without detracting from quality and this does not suggest that potential
operating problems would be introduced by the use of this material.
I would therefore be very pleased of you would further consider this matter with full
understanding of the unfortunate and unavoidable circumstances.
103
Subj 42: Additional Butt Joints 2

We refer to your telex regarding the captioned and would comment as follows :
You belief are noted that it is not related to the facts of the matter. We must
respectfully point out that we have already appraised you of the facts and these are not
based on opinions and are not negotiable.
It is our considered opinion that we are already offering best available quality. Steel
plate is manufacturing to certain proven standards by all mills. You seem to be
suggesting that certain mills produce inferior quality but we are sure they would not
agree with you.
Our proposed suppliers are approved by the classification society. The steel is
produced to the same international standard, regardless of the mill and the quality is
assured by checking and inspection of the classification society.
We consider that we are already meeting our obligations, we are not offering any
shortfall in quality and we can see no justification in going to a more expensive supplier
in Japan. Particularly as it happens to be also a fact that total requirements cannot be
met from that source either. Bearing also in mind the complications which would be
raised by this last point. We can only consider your request on the basis of an owner
preference which would be subject to our reimbursement of the additional cost.
We hope for your reconsideration in this regard.
Subj 43 : Noise Level in Engine Room Store 1

Referring to your ref. CMD/-T101 of October 13, 1987, we would reiterate our
position once again.
Contract spec clearly states British DOT code of practice for noise levels in ships 1978
without any condition.
The buyer has no further equipment as it is the builder's obligation to satisfy the
requirement in full.
Buyer has no intention to reduce the standards of noise level comply it.
Please inform us in detail and we will study your request and if necessary to present the
whole case to DOT for opinion and/or approval. But please bear in mind any noncompliance on your part will be treated as change of specification requirement.
Please be advised, after delivery of the vessel, it is our obligation to assure the
authority concerned that our crew will not be put in jeopardy of their health due to
higher noise level than the permitted criterion.
104
Subj 44 : Noise Level in E/R Store No.2

We acknowledge your fax of Oct 21, 1996 but unfortunately we do not agree with your
response.
For better clarify, please consider the followings ;
The specification requires that wire net be used for division of the E/R store. Please note that
this requirement is clearly quoted with no preconditions or alternatives to take into account any
specific positioning of machinery.
If we supply other than wire net, this can only be done if the spec is changed by agreement of
both parties.
It therefore follows that this E/R store must also be considered by the spec having identical
noise levels to the area of its environment. The spec also calls for the DOT code of practice, not a
highly detailed specification for each minute location and circumstances.
In any code of practice, it follows that there is inevitably some latitude or detailed
interpretation and we therefore sought the ultimate authority of DOT themselves to give specific
guidance on this area.
Our proposal concurs with this guidance and therefore since we are complying with the only
two contractual references to noise level requirements. We feel we can clearly be seen to be
meeting our obligation in full.
We do not therefore understand why you feel that either of these points can be changed
without a change order agreement.
Considering other points that you have raised :
The position of specific machinery at the time of contract signing is not relevant to the
matter in hand. As described above, the contract contains no preconditions and our proposal
meets the requirements of the spec and the authorities for the specific actual layout.
We cannot meet the conflicting requirements of wire net and your request for lower noise
levels than the local environment. It is therefore up to you to decide whether you want something
better than that which meets DOT recommendations and issue a change request to formalize the
resulting change to spec. We strongly deny any allegations of misleading DOT information such
the owner name etc not change the contractual interpretation without the issue of a change order.
We have no proposal for reducing the noise level below that which is contractually defined
and as described above, we consider that our current proposal meets fully with the requirements
of the contract.
Please reconsider this topic in light of the above and deadweight aspect of the spec, a change
order basis meet be used.
105
Subj 45 : Noise level in E/R Store 3

We acknowledge your fax of Oct.27 but are very sorry to note that we still have a basic
misunderstanding between us.
We must therefore reiterate our understanding that our proposal exactly conforms with the
spec requirements without exception.
The basis of our opinion is two fold :
If we supply anything other than wire net, we would not comply with the spec.
DOT code of practice is a general guidance and not a finely detailed standard containing un
breathable rules for every minute situation. our information from DOT themselves are that they
are unbiased decision from the ultimate authority on their interpretation on their own code.
We feel that we have now exhausted all possible debate on this topic and are unlikely to
absorb the negative impact on our design scheme any more. We therefore regretfully must advise
that we consider we are obliged to proceed with the use of wire net in accordance with the spec.
If this decision is unacceptable to you, we believe that further action should be taken at the
owners time and expenses.
We deeply regret this position but hope for your understanding and early response.
Subj 46 : Noise level in E/R store 4

We acknowledge receipt of your fax NBB/892 of November 3 1996, but must register
disappointment that we still seem to have confusion on the request of noise levels in the engine
room stores.
We hope the following comments clarify the issue.
1. We disagree with your comments. The use of wire net is the hard core of this matter. It
is impossible for a wire net division to attenuate the noise level and its use is not a matter
for choice, it is a mandatory requirement of the specification which defines what supply
is covered by the contract price. In addition, the DNV report does not stipulate
permissible noise levels for the engine room store, it simply points out that local
machinery will raise the noise level above the ambient engine room environment
For your information we would advise that we are in receipt of a letter from DNV dated
Sep 11,1996 Which stated : Quote ------ Unquote
Your representative is free to examine the original if you wish.
2. Your quotation of DOT code is misleading, to ensure mistakes have not been made with
interpretation, we again contacted the DOT and received their reply by fax on Nov 9.
For your information, it reads as follows: quote ---- unquote
We feel it is unnecessary to add further comment.
We trust this matter is now clarified and that you are satisfy hat our proposals meet the
contractually defined obligations. As already intimated we are prepared to consider
variation to this if you should require them the extra time and costs must be on your account.
We hope for your early acceptance or instruction as case may be.
106
Subj 47: Noise Level in E/R Store 5

We acknowledge receipt of your fax NBB/957 of Nov 18 and would comments :
1. As already advised, wire net is the material specifically defined for use by the spec. We
sure you must be aware of this.
2. We have already provided you with copies of the relevant correspondences from DOT,
etc. The question of the owner wishing to incorporate guarantees of flexibility to
facilitate possible future flag changes are not a subject covered by our present Contract
and we are not prepared to consider this unless you wish a change to contract.
In relation to your last comment, neither the Hull number nor name of the owner is relevant
to internationally applied universal codes of practice.
We would respectfully suggest that this topic has been now more than adequately covered by
our exchanges and we do not feel it will be fruitful to carry on further.
We must therefore suggest your clear instructions for the work and ask you for an
unconditional acceptance of our proposal which we believe fully meet the contractual
obligation
Alternative, if you require the noise level to be reduced from our proposals, we must ask you
to issue a change to spec for our quotation.
We hope for your kind understanding of our opinion.
107
Subj 48 : Agreement for Buyers Supplies

This agreement, dated the 15th day of November, 1996 is made between Daewoo Heavy
industries Co. Ltd. (hereinafter called Daewoo). Ans K/S A/S Ugland Shuttle Tanker & Co.
(hereinafter called The Buyer)
Witnesseth:
Whereas Daewoo are contracted to construct a 118,000TDW Statoil Shuttle Tanker which is
identified as Daewoo Hull No. 5016 and requires certain Buyers Supplies ; and
Whereas, inaccorance wit the Building Contract Art.17- Buyers Supplies, the Buyer shall,
at its own risk, cost and expense, supply and deliver to Daewoo all of the items to be furnished by
the Buyer as specified in the Specifications, at warehouse or other storage of the Shipyard in
perfect condition ready for installation in or on the vessel, in accordance with the time schedule
designated by the Builder to meet the building schedule of the vessel.
Now, therefore, in consideration of the mutual convenants herein contained, it is agrees as
follows:
1.
The Buyer hereby requests and authorizes Daewoo to purchase and supply the Buyers
Supplies, as detailed in G 12 of the specifications and as designated by the Buyer, on behalf
of the buyer.
2. The Buyer shall provide to Daewoo with the above mentioned information for all supplies at
one time with classification of their destinations. With the exception of times purchased in
Korea, it is clearly understand that it is not possible to purchase supplies from any country if
delivery is to be made in that country.
3. Daewoo shall arrange for delivery of the Buyers Supplies to the destination designated by
the Buyers pro forma invoice. For supplies from Europe to Okpo Shipyard, certain items
will be delivered to a collection port and for convenience will be purchased by a designated
single vendor acting as an agent. The Buyer shall therefore make the necessary
arrangements for Daewoo to be able to open a suitable Master Letter of Credit to such
vendor who shall be designated by the Buyer. All items which are to be delivered to the
collection port will be covered by this single Master Letter of Credit and will be supplied on
a FOB collection forwarding agent who will take care of suitably packing in container or
otherwise:
- Anthony veder & C. O. B.V., Amsterdam
De Ruyterkade 124, P.O.box 1485
Amsterdam, Netherlands
Tel No. : 247944
Tlx No. : 14072
In any change of said contact party, Daewoo will advise the Buyer in writing to make such
change.
4. The Buyer assists Daewoo to secure safe and timely delivering of all the supplies to the
108
5.
6.
7.
collection port by the time advised by Daewoo. The packing charge, freight, insurance, etc,
duly incurred by this service shall be reimbursed by the Buyer to Daewoo by deducting from
the deposit funds.
Upon arrival at a Korean port, Daewoo will take delivery of the cargo and arrange for and
execute customs clearance and formalities in Korea. Daewoo shall carry out the visual
inspection and acceptance of all cargo as it is received by it and give notice of arrival at
Daewoo warehouse. In the event of overage/shortage and/or damages Daewoo shall
immediately give written notice and details to the Buyer. In the case of a third party
inspection being required, the Buyer shall take care of the inspection at its sole expense. The
Buyer shall carry out the inspection and acceptance of all cargo delivered to any other
country than Korea.
After acceptance of each cargo by both parties, Daewoo will classify and store the cargo at
its discretion.
Daewoo shall install and load the Buyers Supplies on board Hull 5016 at their own expense.
8.
All charges and expenses related to the Buyer shall be calculated and prepared by Daewoo
and shall be deducted from deposit fund of USD2,407,000 as set forth in the sideletter of Feb
6th 1986.
9. It further agreed that the Buyer shall reimburse Daewoo for administration and financing
costs incurred.
Such charges to be devided by the addition of a fixed:
a) 2% mark up of the CIF prices for Buyers supplies outside Korea
b) 3% mark up of the Buyers CIF Okpo supplies
c) 5% mark up of the Buyers CIF Busan supplies
The financing costs the period between incurred charges and vessel Delivery shall be
deducted from the deposit fund interest of USD 55,300, as set forth in the sideletter of Feb 6th
1986.
10. Daewoo shall keep proper records and account pertaining to the services it performs under
this agreement and shall render such reports to the Buyer at any reasonably required time.
11. Both parties shall be bound by this agreement as of the date first above written.
In witness whereof, each party has executed this agreement as of date herein first above
written.
109
Subj 49 : Hull 1029 Grounding Damage 1

On basis of evidence obtained and carefully considered by us, it is submitted that the degree
of damage surfaced to vessels bottom and/or machinery in engine room and as consequence of
above incident whilst at Builders risk and resultant upon substantial flooding of engine room, is
of a nature so fundamental that the builder cannot be in position to construct and deliver vessel
in conformity with construct and/or specification so as to amount to what we are entitled to think
we are buying.
Buyer has in mind particularly the potential cumulative or knock-on effect of miscellany of
defects which may remain later even after diligent repair efforts and which may crystallize in
future so as to affect safe and operation of vessel, and the large area of grave damage taking the
effects as a whole outside the category of defects remeable under builders warranty/guarantee.
Accordingly. For the above reasons and with regret, we hereby notify you of our rejection of
the vessel and we demand prompt refund of the full amount of all sums paid by us to you on
account of the vessel together with interest thereon.
Finally, whilst our representatives remain on site, it is in the capacity of surveyors with
watching brief only and no conduct on their part must be taken as consent to acquiescence in
any course of action proposed conducted by Builder.

We are in receipt of your fax and do not agree with your conclusions. You have no
justification at all for rejecting the vessel or for rescinding the contract at this point. None of the
circumstances in the contract justifying such action exist and the action that you have taken by
your said fax is accordingly a repudiation of the building contract which we reluctantly hereby
accept.
In these circumstances your surveyors have further standing in the yard, though we shall in
any event continue to inform you of progress made both with underwriters and towards
restoration of the damage in completion of the vessel in due time. We shall further, in
accordance with the contract terms, act appropriately consequent t upon your repudiatory
default.
If it should be held subsequent hereto that your fax was not a repudiatory breach of contract
as we believe, then you would as always find us prepared to perform our contract by completion
of the vessel and delivery to you in accordance with Art.13 of the contract.
110

Ref your fax, we reject your comments which are a wholly inaccurate analysis of the facts of
this case.
The reasons and justification for our rejection of the vessel are adequately set out in our fax.
For the reasons stated, it is you who are in repudiatory breach and we are therefore entitled to
treat ourselves as discharged from the contract.
Please confirm immediate refund of all suns paid on account together with interest thereon.

We have received your fax of September 22, 1987.
We accept nothing that you say. We do not consider that we have any obligation to refund the
installments to you. Indeed it is likely that we shall have additional claims to make in due time.
We have already advised you that your inspections no longer have any standing in the yard.
Please indicate their departure dates.
111
Subj 53 : Legal Option

The casualty to H.1029 does not of itself give the Buyer a right to terminate the Contract. It
would only do so if it could be shown that the casualty was brought about by a repudiatory
breach of the Contract on your part. Even if there were to be proved some negligence in the
way the vessel was moored or otherwise prepared for the typhoon or in her handling during and
after the typhoon. These matters would not of themselves constitute a repudiation, even
arguably.
It follows therefore that the Buyer has no immediate right to terminate the Contract and this is
further confirmed because no event has occurred under the express terms of the Contract either
which gives the Buyer a right rescind at the stage.
In this circumstance if Buyer in clear terms states that he will not perform the Contract and will
treat himself as if the contract was at an end, he is himself guilty of a repudiatory breach of
contract. A repudiatory breach is a breach of such seriousness that it entitles the innocent party,
in his opinion, either to accept that reach as terminating the contract subject to the innocent
partys right also to claim damages for the wrongful repudiation, or to waive the repudiatory
breach and continue performance of the contract subject always to rights in damages.
The first question that concerned us was whether it could be said that the Buyers message of
15th September, confusing as it did quite badly the concepts of rejection of the vessel and
rescission of the contract, was sufficiently clear to amount to a repudiation. There is always some
temptation on arbitrators to say that people who are corresponding in a language of their words.
Dispute their confusion of terms, we doubt whether the Buyers will succeed in that argument
here, but it is not impossible.
The next question that one must consider is what would be the consequences of purporting to
accept a repudiation. In this respect much ultimately depend upon the seriousness of the damage.
We understand that the vessel is not a total loss and that she is capable of repair within perhaps
about six months from today. In these circumstances it seems unlikely that the Buyer could
escape the consequences of his repudiatory message by saying that the contract was frustrated in
any event. As you know frustration only occurs where some supervening event for which the
parties have not provided renders performance of the contract a radically different thing
commercially from what was intend. If the vessel could be got ready to a standard acceptable to
Class satisfaction for delivery within six months from today, that is no frustration. We will
revert below to the question of retention of installments, interest since it appears likely that the
Buyers are in repudiation, your accepting that repudiation puts an end to the contract subject to
the damages you can prove. Since the contract has come to an end it is important that at all levels
of communication between yourselves and the Buyers you should make it plain that there is no
on-going contractual relationship. This needs careful review internally within your organization
and briefing of the all levels, including those on the ground in the yard who deal with the
Buyers inspectors. Telling the that those inspectors no longer have any standing. We are
inclined to favor your expelling the Buyers inspectors. They are likely to be a nuisance and an
obstruction to the orderly completion of the vessel to class satisfaction. You will to keep the
Buyers informed of what you are doing and from time to time they may have to be invited to
112
attend inspections in accordance with the requirements of the general principle of mitigation of
loss, but the most important thing to notice is that any conduct on your part which is consistent
only with the continued existence of a contract as a waiver of your rights following on the
repudiation.
One needs to consider also what the position is if you are wrong in claiming that the contract has
been repudiated. We are inclined to think that the Buyers would have great difficulty in proving
any loss. They could plainly contract another vessel to perform to their requirements without
incurring any damages with market conditions as they are and they have made it plain that they
are in no hurry to have the vessel, in order to avoid any marginal risk of damages, and because
of the principle that a wrongly ascertain of repudiation is itself potentially repudiatory, we
included that the last paragraph in our draft message sent to you late on 18thSeptember.
No doubt you will be considering the standard to which the vessel needs to be completed and
other like matters with the class. It is obviously important that these matters are kept closely
under review and that PNSL are kept informed of your decisions. We will be pleased to discuss
with you such matters as possible return of Buyers property if and when you find that useful.
We have give preliminary consideration to your position as to the retention of installments
and/or the claiming of further damages. At present the provisions of Article 12 of the contract
are now strictly relevant to the position in all respects because the Buyers have, on our view,
committed a different, and indeed more serious, default that any mentioned there. Nevertheless,
it seems to us likely that you can retain the installments already paid. More difficult questions
arise as to whether you can succeed in claim for further damages. The basic principle is that
your entitled to be put in the same position as you would have been if there had been no breach
of contract against you. This means that if it would have worked out that the Buyers could have
rejected the vessel for delay in deliver you will not succeed in any further damages claim. That, it
turns will depend upon whether the casualty was or not within the force major provisions of the
contract and your hypothetical responsibility (had the contract continued) in liquidated damages
would also have to be taken into account. In summary, we think you must assume that you are
unlikely to recover any further damages beyond the retention of the installments already paid.
Considerations must next be given to whether arbitration should be commenced either to enforce
legal rights or simply on tactical grounds. If you do not commence arbitration, it is a plain
signal to the Buyers that you are content with the installments you have already recovered. We
are inclined to recommend you to send a message in due course to the Buyers telling them that
they will understand of course that you have further substantial claims against them, that you
will be keeping them informed of developments towards the completion of the vessel and that if
there is a short fall of realization after sale, and bringing into account what they have already
paid, arbitration will be commenced against them.
Look forward to your comments on the above.
113
Subj 54 : H.1029 The second letter

We refer to our letter of !8th September and to subsequent telephone conversation with
Mr.Griffy. we also express our regret that timings did not work out quite as intended but trust
that eventually your message did get off to PNSL during your working hours on Saturday 19th
September. We would appreciate a copy of your message and a print of the contract itself
together with a summary of the facts for our records as soon as possible. The speed with which
the matter had been dealt with on Friday prevented us from giving a full exposition of the basis
for our reviews at law. Arbitration may well be necessary but we would rather not take the
initiative on this because on paper you have nothing to arbitrate about at the moment.
There is no reason why you should not open negotiations with alternative buyers now.
Since a party who is faced with a breach of contract has duty to mitigate his loss arising
from that breach, you have a duty which must be taken quite seriously to minimize the loss
caused to you by buyers unjustified repudiation of the contract. The principal of this to you in
practical terms at the moment is that you must make a vessel. What is reasonable in all the
particular circumstances cannot be laid down in detail by lawyer. The safest guideline for you
to follow is that you should at alltimes act as you would if you had no right of resource to the
contract breaker (i.e. PNSL) for your losses.
For the avoidance of doubt we underline that now the buyers have repudiated the Contract
and you have accepted that repudiation as terminating contractual relations, it is late for then to
change their mind and seek to reinstate the contract. We also stress once again that you must
not invoice yourself in any correspondence or discussions with the buyers of the sort which
would be normal if you still had a contract continuing with them. As you are aware, the
acceptance of repudiation brings an end to a contract. You run a rink of being held in have
waived your rights if you act in any way inconsistently with the termination of contractual
relations.
We refer to your draft letter CMD/PNSL-170 of 23rd September. It is desirable that you send
that letter (amended as suggested below) because if you can prove that the casualty to H. 1029
was due to force major then you will ultimately stand some stage of recovering damage over and
of the letter as an exposition of the facts is satisfactory in our opinion although it must be said
that the facts themselves, in terms of the stringency of you obligations under the force major
clauses are much less satisfactory.
We recommend the addition of the following final paragraph to your letter.
114
Subj 55 : Electric cable Test 1

In spite of a great number of reminders and chasers have been to your concerned Dept. we
still have not received any concert solution from your side.
While we are still awaiting your reply to our last fax, the issue becomes even more
mysterious as your HongKong representative Mr. S. J. Lee called us two days ago and informed
us that ...... .
In consideration of your difficulty in materializing your proposal of conducting the test at
Era in U.K. we had per our fax requested your Okpo purchasing Dept. to let us know the cost
adjustment for using cables from Fujikura and Showa, Japan for our consideration. But
unfortunately our request is ignored and has no reply from your side so far.
In view of this issue has been dragging on for quite some time, we would like to have your
close attention in order to find some ways and means to reach an amicable settlement as this
issue has now become more a contractual than technical matter.
Your urgent attention will be much appreciated.
Subj 56 : Electric cable Test 2

I am very concerned about the tardiness exhibited with the discussion of electric cable
maker for Hull 5017.
You will now understand our new position on this matter from fax of October 23rd,1996 sent
by Mr. K.C. Eum but from now on I will give my personal close attention to this matter for
expeditious resolution.
Despite our inability to clear up the matter earlier, I hope for your deep understanding and
cooperation on this matter.
Subj 57 : Change Order Quotation 1

As all along we are discussing the mooring arrangement we consider the whole issue is quite
within the scope of adjustment as stipulated in spec page 4-11. Therefore apart from cost
adjustment on charge of material and equipment, there should not be any overhead charges as
claimed by you. We wish to reiterate that any comment exchange during plan approval stage is
part of the design process.
If your logic is established we should ask for fees for clarifying those spec. requirement and
supplying information design material to your design dept. To settle this protracted
outstanding matter we appreciate you give us a fair and reasonable response.
115
Subj 58 : Change Order Quotation 2

We acknowledge your fax but must point out that you appear to have a misunderstanding of
our relative obligation.
We entered into a contract for a defined package and the price includes for the overhead
contribution required by that package.
You have chosen to extend the supply to more than package and accordingly increased the
required utilization of our facility. We must therefore seek reimbursement for this. You must
understand that the contract price does not include facility charges for work not contained in the
contract package.
For the option contained in the contract, we have not attempted to make any such charges.
However, we do not understand why you feel that the contract option includes for provision of
extra items and for these we have asked for reimbursement of full costs.
We do not therefore understand why you feel this is u unfair. In relation to your suggestion
of fees for your involvement in specification clarification, both parties expend manhours in this
way but your suggestion that we should perhaps charge each other for this is far from
reasonable. It is a matter for mutual benefit and each party should be prepared to cooperate in
resolving such issues.
We hope this gives you a clear understanding of the situation since we must confirm that we
can not supply extra requirements without proper compensation.
We hope for your understanding and early response.
Subj 59 : Request Action

Looking through our records, we note that we have not had your response to our fax CMD111 of September 15th, regarding the subject matter.
As we are unlikely to hold this matter pending longer, you requested to confirm by Oct 3rd
that you are in agreement of our quotation and we are preparing a credit for this change.
Otherwise, we regret to say that we must regard your change request withdrawned by
yourselves.
116
Subj 60 : E/R Block Division

Referring to your fax NBB/123 of Aug. 21st 1996, we previously advised you on many
occasions of the need to revise the E/R block division for H.5027 and regret to hear from you
that you are still reluctant to do so.
Taking all points into consideration, we must at the outset say that your concerns would
have some reasonable grounds if do not prepare any commitment for maintaining the grade of
quality and would once again request your assistance in order to reach our mutual goals.
As you know, the erection method of H.5017 is quite different from that of H.5027 and the
erection method of H.5017 in the dry dock is scheduled around 5.5months. The period of 5.5
months enables us to allocate 2 weeks for block no.101 outfitting work as an independent activity
after the block laid in the dock. .......
In order to stand up to these situations, we already incorporated the above first and second
methods into our scheme and now are considering the maximization of pre-outfitting work
before the erection. ......
Therefore, in consideration of our crane capacity limitation and the weights of block, we
intend to reduce E/R block instead of enlarging Block no. 102 and erect this block with all
equipments and materials pre-outfitting.
In addition to the benefits of the shortened dock period, the new blockdivision enables us to
significantly increase the productivity by change of work stage. It also provides us with better
traffic conditions.
It seems to us that the punctual difference between the H.5017 erection method and the new
method is to change the joint welding stage from the shop to in the open air and vice versa. The
only point you are worrying about is the fact we shall execute somewhat additional seams.
We put this to you because we are confident that the additional seams will not degrade the
quality of the vessel. In the welding quality test witnessed by Class, we have been test under the
welding conditions exactly equivalent to those of our actual productions site and then have been
certified.
In the light of foregoing, we must ask for your deep understanding on this matter and advise
you that we have no way but to undertake the new E/R Block Division.
We can guarantee the welding quality but would welcome your favourable recommendation,
if you are still concerned about the result of the welding method.
117
Subj 61 : Notice of Tender of H.1029
We are pleased to inform that all outstanding technical matters have been cleared and
verified by the Classification Society on 14th March 1996.
All appropriate documents are already at hand and available to you at your earliest
convenience as informed by our previous fax CMDPO4 of 6th March.
Since we had already proposed that delivery and acceptance of the vessel should be effected
on 12th march,1996, we therefore formally declare that delivery of the vessel should be regretted
as tendered as from the date of 14th March ,1996,. We will confirm this notice by separate letter.
We would appreciate notice of your detailed intentions for accepting
We therefore to the state of completion of the above Vessel and would advise that we
recently met your senior representative to clearly establish that no remaining items remain.
At this time, it was agreed that only one minor matter was outstanding and this was
immediately rectified.
We consider that can be quite fairly interpreted that the Vessel is complete in every respect
for delivery.
However, until such time as delivery is formally effected, you now have crew members on
board and equipment is being used.
We therefore must advise that if any other defects arise, this will be handled as a matter and
not as a condition of acceptance of delivery.
We will as matters of course make every attempt to resolve anything which arises before the
Vessel sails but we ask for your understanding that we cannot isolate the Vessel to prevent minor
damages occurring when personnel are on board who are not under our control.
118
Many thanks for your fax AMSL.111 and DGM/115 of the 18th and 19th March respectively.
Your assumption was correct in that we sent our fax CMDP-111 on March 19th before either
or your faxes came to hand.
However, we do not accept the logic behind either of your faxes and must insist on the
conditions stipulated in our fax of the 19th.
It happens that all items are now cleared, including the two items mentioned in the letter of
your two faxes but in ant event, your wish to reject previous notices of delivery until vessel
completion has been certified by your site staff in writing, is not acceptable since there is no such
rectification of the punch list item.
Even though our own inspection and the Classification Society were entirely satisfied, we also
checked with your representative to ensure he was satisfied. As pointed out by our previous fax,
the agreed that only one deficiency item remained and this was rectified on the same day, we
consider it is therefore self evident that we had complied with all contractual obligations for
delivery of the vessel.
However, it is obviously impossible to freeze the ship in that condition, and minor deficiencies
can occur thereafter . it is therefore only feasible to handle these as ongoing repairs.
We trust you can concur with this logic.
We refer to your fax AMSL-1900 of March 21st,1987 and would advise that your comments
are not accepted.
As clearly notified by our fax CMDP-22 of March 17th, our confirmation letter CMD/PNSL101 of March 18th, we consider the vessel was complete on March 14th, tender of delivery was
accordingly offered with effect of that date, and we stands firm by this position.
As already point out, the items you mentioned were minor faults such as what will occur
daily in the life of any vessel and as such they were not complete items.
We do not intend to issue any further notices of readiness for delivery since we consider the
position is adequately made clear.
119
Subj 65 : Noise level in E/R store

We refer to your fax NBB/111 of Nov 23 and would again ask you to clarify your intentions.
We have already given you are relevant DOT correspondence which accepts the noise level
in the E/R atore. Are you suggesting that this is a condition or exception which you will not
accept.
We have also pointed out the spec requirement of using wire net but you seem unwilling to
accept a change to contractual scope of wire net, we have confirmed that the resulting noise level
is acceptable to DOT, we are also prepared to change the spec if you so desire.
Unless we have a clear statement of your intentions by return, we will have to proceed with
the work as currently drawn.
We are very sorry that this topic should have apparently caused so much confusion and
argument.
;;;
120

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Daewoo Heavy Industries Co. Ltd

Simple Notice of Fact

Request Change Order Quotation

D. Model Letters for Contract Management Dept.

Chemical Tanker Pitting of Cargo Tank

Some Rule for Good Writing

Check your letter

Is its appearance attractive ; is it well laid out?

Before you begin to write, ask yourself the following questions

What is my aim in writing this letter?

Introduction or an acknowledgment ( Make a request )

Enquiries and Replies

A satisfactory quotation will be include the following;

An expression of thanks for the inquiry

The letter of rejection

Thanks the seller for his offer

Element of the sales letter

When the goods ordered cannot delivered immediately

Apologize for the delay

Declining the order

Regret your inability to meet the buyers need

Refer to the account that cannot be paid immediately

Put yourself in your readers shoes.

We have received your letter of.....,

Introduction of Agreement or Confirmation

This letter will serve as acknowledgment of my receipt of the following documents.

and future activities at our side consist of :

Notice, Information, Request

Notice, Information, Request with Regret and Complaint

you can see the situation.

Quotation Proposal, Invoicing

Acceptance of proposal or Quotation

Objection to Proposal or Quotation

assessment and that a detailed reply is forthcoming.

comply for the following reasons.

Alternative, Counter Proposal, Comments

refusal to accept our change order request.

Text 2 : Advise Ones Position or Opinion

order to recover lost production.

Text 3 : Suggestion or proposal

associated cable change out costs.

Text 4 : Request Ones Action or Information

Text 5 : Notice of Rejection and Compliants

Text 7 : Enclosure or Following

Text 8 : Reject the Change Request or Request Written Confirmation

Text 9 : Request or submission of Change Order Quotation

the comments noted thereon.

Text 10 : Request or Reconsideration & Additional Explanation

will find it possible to reconsider it.

Text 11 : Quotation Validity & Completion Date

Text 12 : Change order Rejected

Text 13 : Delivery Schedule

Text 14 : Delay in Delivery

Text 17 : Negotiation after Quotation

Text 18 : Benefits and Important Factors

Text 19 : Explanation of wording

or delay caused directly by industrial action or by circumstances beyond its control.

12. Underline position title : then describe responsibilities and achievements or

would fulfill our needs.

Close. 2 Change Order Accepted or Rejected

Close 3 : Pending Decision or Action

Close 4 : Information and Notice

Please let us know as soon as you can............,