DRAFT

SUPPLY

CONTRACT

V - 6730

hereby entered into by and between

Purchaser

RUPALI POLYSTER Ltd.

241-242, UPPER MALL SCHEME
ANAND ROAD, LAHORE 54000 PAKISTAN

(hereinafter referred to as PURCHASER)

and

DEUTZ POWER SYSTEMS GMBH

CARL BENZ STRASSE 1
D-68167 MANNHEIM
FEDEARL REPUBLIC OF GERMANY

(hereinafter referred to as SUPPLIER)

(PURCHASER and / or SUPPLIER hereinafter jointly or individually referred to as

PARTY(IES))

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Table of content
1.
DEFINITIONS... 3
21.
Subject of the Contract
63
23.
Terms of delivery and delivery dates...
84
43.
Contract Price....
114
45.
Terms of payment.1.
15
6.
Variations and SUSPENSION... 12
57.
Risk of
loss.13. 5
86.
Warranty...14 6
97.
Acceptance..
615
108.
Overall limitation of
Liability...17 8
11.
TERMINATION OF THE CONTRACT....18
129.
Force Majeure.
819
13.
OFFICIAL APPROVALS.. 20
14.
REPRESENTATIVES... 20
150.
Collateral agreements and effectiveness of the Contract..
920
161.
Applicable law and Jurisdiction
921
17.
TAXES. 21
18.
PATENTS AND USE OF DOCUMENTATION. 22
19.
ASSIGNMENT AND SUB_LETTING. 22
20.
EFFECTIVE DATE OF CONTRACT22
LIST OF Annexes
Annex

I ..Scope of Supply of GENSETS and

SERVICESSUPERVISION
Annex II Technical Description TD | 6730 | i1 | 2008
Annex III .Form of Letter of Credit
Annex IV Acceptance Parameters
Annex V..Battery Limit
Annex VIProject Time Schedule
Annex VIIContract Price and Terms of Payment
Annex VIII.Engineering
Annex IX.Commissioning Procedure
Annex XSpare Parts
Annex XI...Performance Bond

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Preamble
I

WHEREAS the RUPALI POLYESTER LIMITED is a public company

limited by shares incorporated and existing under the laws of the
Islamic Republic of Pakistan and has its head office
at________________________________; and

II.

WHEREAS the DEUTZ POWER SYSTEMS GMBH is a company

incorporated and existing under the laws of the Federal Republic
of Germany having its head office at Carl Benz Strasse 1, D-68167
Mannheim, Federal Republic Of Germany; and

III.

WHEREAS the PURCHASER intends to purchase from the

SUPPLIER GENSETS and, SUPERVISION, which are highly
developed and tested to each customers specific requirements.
SUPPLIERs GENSETS are designed for stationary, continuous duty
operation, and are characterized by particularly high efficiencies,
low emissions and high durability and reliability; and

IV.

WHEREAS the PURCHASER has/is going to purchase(d) certain

GENSETS, SUPERVISON from the SUPPLIER, so that the
PURCHASER will get the plant for generation of electricity, which
will work in harmony and in a synchronized manner with the
existing power plant of the PURCHASER.

NOW THEREFORE, IN CONSIDERATION OF THE PROMISES AND MUTUAL

AGREEMENT HEREIN CONTAINED THE PARTIES AGREE AS FOLLOWS:
WITNESSETH THAT:
1. DEFINITIONS
The following terms with capital letters shall have the meanings defined below unless in
any particular instance the CONTRACT expressly indicates otherwise. Words importing
persons include corporations and words importing the singular include the plural and
vice versa where the context requires.
1.1

Acceptance- Shall mean the event of signing a certificate of the

GENSETS; it shall also mean the event on which, according to the
stipulations of the CONTRACT, all the GENSETS are deemed to be
accepted.

1.2

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

1.3

AMENDMENT Shall mean document signed by the PARTIES, which introduces

modifications to the CONTRACT or any CONTRACT element in accordance with
Article __.

1.4

BATTERY LIMITS- Shall mean as defined in Annex V

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1.5

CHANGE ORDER Shall mean any request by the PURCHASER to the

SUPPLIER for a change, modification, addition or deletion with respect to the
GENSETS that affects the CONTRACT PRICE, the PROJECT TIME SCHEDULE
(APPENDIX VI), any of the ACCEPTANCE PARAMETERS (Annex IV) or any
material right or obligation of either PARTY.

1.6

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

1.7

CONTRACT PRICE Shall mean the fixed amount to be paid by PURCHASER to

SUPPLIER for the GENSETS as described in CONTRACT PRICE AND TERMS
OF PAYMENT SCHEDULE (APPENDIX VII).

1.8

COMMISSIONING Shall mean the operation of the GENSETS until

PROVISIONAL TAKE OVER, during which period also the PERFORMANCE and
RELIABILITY TESTS will take place.

1.9

DELIVERY Shall mean terms as defined in Article 3.

1.10 GENSETS Shall mean industrial/commercial ___ number of Turbo Charged

Engine Generator Sets model ___________ more particulary described in Scope
of Supply (Annex I) & Technical Description (Annex II).
1.11 ERECTION Shall mean the installation by PURCHASER, of all GENSETS and
materials forming all together the GENSETS, including MECHANICAL TESTS,
under the SUPERVISION of the INSTALLTION ADVISOR appointed by the
SUPPLIER and in accordance with the written instructions contained in the
Technical Description (Annex II);
1.12 FACTORY TEST Shall mean testing of GENSETS as defined in Technical
Description (Annex II).
1.13 FINAL ACCEPTANCE Shall mean the time at which the PURCHASER accepts
the GENSETS after the expiration of the WARRANTY PERIOD
1.14 MECHANICAL COMPLETION Shall mean the state and/or the date when all
GENSETS have been erected and installed.
1.15 MECHANICAL TESTS shall mean the running of individual GENSETS and
materials (including the GENSETS), with water, electricity, air, no-load tests, loop
tests, and/or whatever else is required to check and to verify the MECHANICAL
COMPLETION and the mechanical readiness of all the GENSETS and materials
(including the GENSETS) for START-UP under the SUPERVISION of the
INSTALLATION ADVISORSUPERVISOR, all as specified in the Commissioning
Procedure (Annex IX);
1.16 PERFORMANCE BOND shall mean as defined in Clause

4.5;
1.17 PERFORMANCE AND RELIABILITY TESTS - Shall mean test executed
according to Clause 9.7 below and Commissioning Procedure (Annex IX).
1.18 PROJECT TIME SCHEDULE (Annex VI) - Shall mean the schedule for delivery
performance of the GENSETS.
1.19 PRODUCT(S) Shall mean electrical power as the context may provided,
specified and guaranteed in Appendix IV for the industrial/commercial use in the
Industry.

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1.20 PROVISIONAL TAKE OVER Shall mean the successful completion of the
COMMISSIONING, START UP and Test Run.
1.21 PURCHASER Shall mean RUPALI POLEYSTER LIMITED
1.22 RISK Shall mean as defined per DELIVERY term and Incoterms 2000.
1.23 SITE Shall mean the actual place where the GENSETS is to be erected.
1.24 SPARE PARTS Shall mean those items which are mutually agreed between the
SUPPLIER and the PURCHASER to be the replacement parts of the GENSETS as
per Appendix X.
1.25 SUB-SUPPLIER(S) Shall mean all persons and companies and their employees,
used by the SUPPLIER in accordance with the CONTRACT to perform the
GENSETS supply.
1.26 INSTALLATION

ADVISORSUPERVISOR(S) Shall mean

person(s) with adequate technical knowledge and experience
appointed by theacting on behalf of SUPPLIER for carrying out the
SUPERVISION to fulfill its obligation under this CONTRACT on the
SITE in Pakistan as per Article 1.28, Article 2.7 and Annex 1.

1.27 SUPERVISION Shall mean the technical services, direction, instructions, advise,
guidance, and supervision for the purposes of ERECTION, MECHANICAL TESTS,
MECHANICAL COMPLETION, COMMISSIONING, START-UP, operation and
conduct of PERFORMANCE and RELIABILITY TESTS of the GENSETS till
PROVISIONAL TAKE OVER as specified in Article 9.7.
1.28 SUPPLIER Shall mean DEUTZ Power Systems Gmbh.
1.29 WARRANTY PERIOD Shall mean the period defined in Article 7.2.
1.30 WORK or WORKS Shall mean all the GENSETS and any services to be
supplied by the SUPPLIER under this CONTRACT.
1.31 CFR shall mean Cost and Freight as is further specified as per INCOTERMS
2000;
1.32 CPT shall mean Carriage Paid To as is further specified as per INCOTERMS
2000;
1.33 DDP shall mean Delivered duty paid as is further specified as per INCOTERMS
2000;
1.34 DDU shall mean Delivered duty unpaid as is further specified as per
INCOTERMS 2000;
1.35 EXW shall mean Ex Works as is further specified as per INCOTERMS.
12.

Subject of the Contract

2.1
Subject to the terms and conditions of this Supply Contract, the SUPPLIER agrees to
supply to the PURCHASER, the SUPPLIER design, know-how, basic and detail engineering in
the
form
of
technical
documentation,
manufacture
and
deliver
the
EQUIPMENTGENSETSSUPERVISION ERECTION and installation of the EQUIPMENTthe
engines with additional equipment (hereinafter referred to as GENSETS) and to perform the

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SUPERVISION through INSTALLATION ADVISORSUPERVISOR of ERECTION and

installation of the GENSETSservices (hereinafter referred to as SERVICES) as specified in
Annex I to this Contract and the PURCHASER agrees to purchase and receive the SUPPLIER
design, know-how, basic and detail engineering in the form of technical documentation,
manufacture and delivery of such GENSETS and, SUPERVISION to be performed by the
SUPPLIERs INSTALLATION ADVISORSUPERVISOR ofand SERVICES for the ERCETION
and installation of the GENSETS as specified in Annex I to this Contract, including all items
tools, spare parts and consumable spare parts, as specified in Annex X, to be used for a
PURCHASER power plant in ___________, Pakistan, for the production of electric power as
per the requirement of the PURCHASER. The GENSETS and SERVICES should be used for a
Power plant in ??????
2.2

Any equipmentGENSETS or material which is required to construct the GENSETS

within BATTERY LIMIT so that it can fulfill the ACCEPTANCE PARAMETERS as
specified in Annex IV and which is not specified by the SUPPLIER in ANNEX I shall be
provided by the SUPPLIER, free of any costs, to the PURCHASER, and at his own
expense, DDU Karachi Port. In case of delivery of such additional
equipmentGENSETS or material not specified in ANNEX I after delivery of the
GENSETS has been completed, the SUPPLIER shall make delivery DDP at the
GENSETS SITE and PURCHASER will render all required assistance for customs
clearance.
1.1 The scope of supply of the GENSETS and the SERVICES to be performed are limited to
the scope of supplies and services that is specified in Annex I and the Supplier shall
not have the obligation to deliver any other equipment, parts or materials or be obliged
to perform any other tasks, services or works as specified in Annex I.
21.3

The SUPPLIER shall ensure that the GENSETS is designed to meet all the physical
conditions at SITE, including, but not limited to the kind of climate and utilities etc.
available thereon.
Unless otherwise provided for in this Contract, this Supply Contract shall be executed
based on the standards of the SUPPLIERS and according to the relevant technical
standards, codes and regulations existing and applying in the Federal Republic of
Germany on the date of signature of the Contract.

2.4

Unless otherwise provided for in this Contract, the SUPPLIERS obligation to perform
according to Clause 1.1 is conditioned upon the PURCHASER ensuring:
a)

That the employees of the SUPPLIER have safe and unrestricted access to the
site on which the GENSETS are to be installed and operated.
b)
That all necessary work to be performed by the PURCHASER or other
contractors of PURCHASER prior to the performance of the SERVICES by the
SUPPLIER have been successfully and entirely completed.
c)
That all tools, equipmentGENSETS, materials and manpower, which are
necessary for the performance of the SERVICES according to Clause 1.1 that
the SUPPLIER does not provide under this Contract are provided free of charge
and at the risk of the PURCHASER.
d)
That the PURCHASER provides suitable and lockable storage rooms for
equipmentGENSETS and apparatus of the SUPPLIER.
That the PURCHASER provides all in connection with this Contract necessary
permissions or licences as long as this is not clear defined as duty of the SUPPLIER in
Annex I.
That the PRCHASER confirms at least four weeks before the schedule date of
commissioning, that the installation works of the GENSETS is finished and that the
plant is ready for commissioning.
In case the PURCHASER does not meet the aforesaid conditions the PURCHASER
shall be deemed to be in default and the SUPPLIER shall be entitled to reject the
performance of the SERVICES according to Clause 1.1 until the PURCHASER has

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remedied such default to the reasonable satisfaction of the SUPPLIER. The periods
stipulated in Clause 2.2 shall be executed accordingly. Any additional costs of the
SUPPLIER resulting from such default of the PURCHASER shall be borne by the
PURCHASER who shall indemnify the SUPPLIER for such additional costs.
2.5 The SUPPLIER shall, in accordance with this CONTRACT and with due care and diligence,
deliver the GENSETS within the PROJECT TIME SCHEDULE (APPENDIX VI).
2.6

SUPPLIER shall supply the consumables SPARE PARTS for up to ______ hours of
plant operation along with COMMISSIONING spares as defined in Appendix X and the
purchaser shall rely on the list of such SPARE PARTS supplied by the SUPPLIER.

2.7 SUPPLIER undertakes to provide SUPERVISION through INSTALLATION

ADVISORSUPERVISOR for the ERECTION and installation of the GENSETS.
SUPERVISION to be perform by the INSTALLATION ADVISORSUPERVISOR shall
include the following:
2.7.1

SUPERVISION of ERECTION, MECHANICAL COMPLETION, START-UP,

COMMISSIONING and PERFORMANCE and RELIABILITY TESTS of the
EQUIPMENTGENSETS during up to PROVISIONAL TAKING OVER. Cost of
such SUPERVISION is included in the CONTRACT PRICE.

2.7.2

SUPERVISION of piping works, including fabrication at the SITE during

ERECTION of the GENSETS so as to ensure that the GENSETS can achieve
the ACCEPTANCE PARAMETERS as specified in Annex IV.

2.7.3

Assistance in working out and updating of the GENSETS START-UP in

accordance with Annex IX from the view point of GENSETS PROVISIONAL
TAKING OVER.

2.7.4

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

2.7.5

Any other SUPERVISION required to be provided to the PURCHASER in order

to accomplish ERECTION and COMMISSIONING of the GENSETS within the
BATTERY LIMIT.

2.7.6

During the whole period of SUPERVISION the GENSETS shall be under the
charge of the INSTALLATION ADVISORSUPERVISOR and the PURCHASER
shall not act in any manner contrary to the instructions, guidance and advice
issued by the INSTALLATION ADVISORSUPERVISOR in writing

2.7.7

The INSTALLATION ADVISORSUPERVISOR shall bring along with them any

special tools which are required for the performance of their duties.

2.7.8

In the event, the advice and instructions of the INSTALLATION

ADVISORSUPERVISOR (S) appointed by the SUPPLIERS are not followed or
complied with, at the earliest opportunity as soon as the defect is located by
the said INSTALLATION ADVISORSUPERVISOR (S), then the INSTALLATION
ADVISORSUPERVISOR (S) of the SUPPLIER shall make a report in writing to
the PURCHASER and the PURCHASER shall as soon as possible rectify the
defect.

2,8

INFORMATION, DRAWINGS AND DATA

2.8.1 The PURCHASER is responsible for providing required information for the SUPPLIER to
fulfill his obligations according to Project Time ScheduleDocument Submittal
Schedule, as specified in the Annex XVI.

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2.8.2. The SUPPLIER will send Technical Description of the GENSETS in accordance with
Project Time ScheduleDrawing Submittal Schedule (Annex XVI). Any comments the
PURCHASER might have to these drawings shall be remitted within fourteen (14) days
after receipt, otherwise they are be deemed to be approved.
2.8.3 The SUPPLIER shall be responsible for any discrepancies, errors and omissions in his
drawings and information, whether the PURCHASER has approved them or not.
2.8.4 The PURCHASER shall be responsible for the drawings and information supplied in
writing by the PURCHASER.
2.8.5

Notwithstanding anything contained hereinabove, any documents, drawings,

information etc provided by the PURCHASER to the SELLER in respect of the
GENSETS or otherwise in relation to this CONTRACT shall not absolve, exonerate or
discharge the SUPPLIER liability and obligations under this CONTRACT and under
any other law for the time being in force in respect of such GENSETS.

2.9

INSPECTION

2.9.1 The PURCHASER is entitled to physically review relevant progress of the manufacture of
the GENSETS. For this purpose the PURCHASER having provided reasonable notice to
the SUPPLIER shall have access to the said workshop during normal business hours,
but without interfering with the progress of the GENSETS manufacture.
2.9.2 The SUPPLIER shall give the PURCHASER notice in writing at least two (2) weeks
before any FACTORY TEST of the GENSETS that are subject to FACTORY TEST and
which must be at least one (1) month before the dispatch EXW.
2.9.3

Notwithstanding anything contained hereinabove, PURCHASER inspection or failure to

inspect the GENSETS shall not absolve, exonerate or discharge the SUPPLIER liability
and obligations under this CONTRACT and under any other law for the time being in
force in respect of such GENSETS.

23.

Terms of delivery and delivery dates

3.1

Delivery of the GENSETS will be effected in accordance with and be subject to CFR
Sea Port Karachi, Pakistan condition according to INCOTERM.

3.2

The following delivery of the are agreed

Ex-Works delivery of the GENSETS according to Annex 1 will be 5-6 months (to be
agreed) after Contract effective date.
Partial shipment and payments are allowed.

3.3

Compliance with the Project Time Schedule (Annex VI) delivery times by the
SUPPLIER is conditioned upon PURCHASERS fulfilling its contractual obligations
under this Contract.

3.4

In the event the SUPPLIER fails to deliver the GENSETS on the delivery dates due to
the negligence of the SUPPLIER and the PURCHASER sustains damages because of
such delay, the PURCHASER shall be entitled to claim liquidated damages for delayed
delivery at a rate of 0.250% of the CONTRACT PRICE price of the part of the of the
complete scope of GENSETS actually delayed for every full week of delay, but no more
than an aggregate of 2.5% of the price of such part of the scope of GENSETS, which
can not be used due to the delay. After reaching the maximum liquidated damages for
delay the PURCHASER shall grant the Supplier a reasonable extension of delivery
time. If the delivery of the GENSETS is delayed beyond twelve weeks (12) the

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PURCHASER shall have the right to terminate the CONTRACT. The payment of
liquidated damages shall not absolve the SUPPLIER from its obligations to deliver the
delayed portion of the GENSETS (Annex I) and/or Technical Description (Annex I).
3.5 The SUPPLIER must ensure that the EQUIPMENTGENSETS shall be packed to as per
export standard sea worthy packing which is fit for the purpose for transport of such like
equipmentGENSETS. An international inspection company, acceptable to the SUPPLIER
will supervise the packaging procedure. A report regarding the quality of the packaging
procedure and completeness of the GENSETS will be forwarded to the PURCHASER. All
costs arising from these services shall be borne by the SUPPLIER.
3.6 SUPPLIER shall provide the following documentation commercial invoice, packing list,
European Certificate of Origin (if required) Bill of Lading and any other documents required
by the PURCHASER for the importation of the GENSETS.
3.7 If the SUPPLIER is responsible for any shortages or errors in GENSETS as specified in
Annex I, the SUPPLIER shall deliver the missing parts DDP SITE Pakistan.
3.8 The PURCHASER shall inform SUPPLIER in writing two weeks after the signing of
CONTRACT of its requirements as regards the format and contents of the packing lists and
shipping invoices and on any important matters to be taken into consideration in this
respect. SUPPLIER shall prepare the packing lists and shipping invoices accordingly and
shall send to the PURCHASER by courier service or telefax the packing lists and shipping
invoices prepared by SUPPLIER for shipment actually dispatched as soon as practical, but
in any event prior to submission of these documents to the bank.

3.9

Delivery of the Technical Description will be effected by courier service

CPT to the Head Office of the PURCHASER.
3.10 All cases shall be opened at the SITE by the PURCHASER upon
arrival of the GENSETS at the SITE. PURCHASER will look for
visible outside damage which may have occurred to the cases
(or other packing, or to the GENSETS as may be visible from
the outside) during transportation and report any such
damages detected by telefax or by e-mail to SUPPLIER. Such
damage shall, if SUPPLIER so requests, be certified henceforth
by an authorized insurance agent to be nominated by
SUPPLIER, the equipments concerned shall be kept intact as
received until such inspection has taken place or has been
waived by SUPPLIER.
3.11

If SUPPLIER should not reply to any notification of damage within

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

3.12

If at the opening of the cases any damage to the GENSETS or

any discrepancy between the contents of the case and the

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description in the relevant documents, or any short shipment,

are found, or if any items in the case cannot be identified by
PURCHASER,
PURCHASER
will
call
the
SUPPLIERs
INSTALLATION ADVISORSUPERVISOR available at the SITE to be
a witness of such findings or to assist PURCHASER to identify
the items concerned; in such case the PURCHASER and the
SUPPLIERs INSTALLATION ADVISORSUPERVISOR shall prepare
and sign the material receiving report jointly.
3.13 Should completion of delivery of the GENSETS as per this
section be delayed beyond the delivery dates specified in this
CONTRACT due to causes not excused by the provisions of this
CONTRACT, the PURCHASER is entitled to liquidated damages
of specified in Article 19 for each [full week] of delay. If the
delivery of the GENSETS is delayed beyond [twelve (12)
weeks] the PURCHASER shall have the right to terminate the
CONTRACT.
3.14 The payment of Liquidated Damages shall not absolve the
SUPPLIER from its obligations to deliver the delayed portion of
the EQUIPMENT and/or Technical Specification.
2.1 The rights and remedies of the PURCHASER in the event of delayed or non-delivery of the
GENSETS or SERVICES by the SUPPLIER are exhaustively ruled in Clause 2.5 and
the PURCHASER shall have no other rights or remedies against the SUPPLIER.

3.150 INSTALLATION, COMMISSIONING, TEST AND PROVISIONAL TAKE

OVER
3.150.1
SUPPLIER shall provide a suitably qualified installation
advisorsupervisor.
3.150.2
SUPPLIER shall provide suitably qualified commissioning
engineer(s).
3.150.3
Commissioning, Start Up, Test Run, PERFORMANCE AND
RELIABILITY TESTS and PROVISIONAL TAKE OVER of the supplied
EQUIPMENTGENSETS shall be executed in accordance with the
Commissioning Procedure.
3.15.4Until PROVISIONAL TAKE OVER, The PURCHASER shall only operate
the GENSETS with written approval from the SUPPLIER.
3.15.5The COMMISSIONING of the GENSETS is limited to [24 working] days
([eight hours] per day). In case of delay for reasons not attributable
to SUPPLIER but attributable to PURCHASER, the costs of additional
working days are to be borne by the PURCHASER. In the case of delay
caused by reasons attributable to SUPPLIER and not attributable to
PURCHASER the cost of the additional working days shall be borned
by the SUPPLIER. In the case of delay caused by reasons attributable
to neither SUPPLIER nor PURCHASER an amicable solution shall be

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found.. the PURCHASER shall inform the SUPPLIER in writing about

the date of readinesreadiness s of START UP and COMMISSIONING by
giving [thirty (30)] days notice in advance.. [Five (5)] days before
START UP and COMMISSIONING, the SUPERVISORINSTALLATION
ADVISORSUPERVISOR shall send to the SUPPLIER and the
PURCHASER the completed installation check list, confirming that the
mounting and installation has been finalized according to SUPPLIERS
Technical Specifications and project related documentation and that
all Site facilities necessary for GENSETS operation are ready for
continuous and uninterrupted operation.
3.15.6If and when tested the GENSETS fails on COMMISSIONING, START-UP,
tests run or fails to achieve the MACHENICAL COMPLETION the
SUPPLIER shall be afforded a period of one month or such other
period as otherwise agreed between the PARTIES, during which the
SUPPLIER at its own costs and expenses can repair, correct and/or
adjust the GENSETS, at its own cost and expense, so the GENSETS
achieve the COMMISSIONING, START-UP, tests run or achieve the
MACHENICAL COMPLETION. During such period the SUPPLIER shall be
liable to pay the PURCHASER liquidated damages of @ 0.50 % of the
CONTRACT PRICE for each full week which on aggregate shall not
exceed in any event 5% of the CONTRACT PRICE during which the
SUPPLIER carried out the repairs. If the SUPPLIER fails to rectify such
defects within such time period, the PURCHASER may grant an
extension of time to SUPPLIER to rectify such defects and charge
liquidated damages at the rate mentioned herein above or the
PURCHASER may terminate the CONTRACT and shall be entitled to
compensation as mentioned in Article 22.

3.16 INFORMATION, DRAWINGS AND DATA

3.16.1The PURCHASER is responsible for providing required information for
the SUPPLIER to fulfil his obligations according to Project Time
Schedule, as specified in the same document.
3.16.2The SUPPLIER will send technical specifications of the main GENSETS
in accordance with Project Time Schedule, . Any comments the
PURCHASER might have to these drawings shall be remitted within
fourteen (14) days after receipt, otherwise they are be deemed to be
approved.
3.16.3The PURCHASER is entitled to physically review relevant progress of
the manufacture of the
GENSETS. For this purpose the
PURCHASER having provided reasonable notice to the SUPPLIER shall
have access to the said workshop during normal business hours, but
without interfering with the progress of the GENSETS manufacture.
3.16.4The SUPPLIER shall give the PURCHASER notice in writing at least two
(2) weeks before any factory test of the GENSETS that are subject to

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factory test and which must be at least one (1) month before the
dispatch ex works.
3.16.5The SUPPLIER shall be responsible for any discrepancies, errors and
omissions in his drawings and information, whether the PURCHASER
has approved them or not.
3.16.6The PURCHASER shall be responsible for the drawings and
information supplied in writing by the PURCHASER, and shall pay any
additional cost incurred by the SUPPLIER due to alterations of the
GENSETS, which result from incorrect or incomplete drawings and
information.
3.16.7The PARTIES to the CONTRACT shall use SI-units in documentation
and correspondence.
34.

Contract price

43.1 The PURCHASER agrees to buy from the SUPPLIER and the SUPPLIER agrees to
supply, sell and render the PURCHASER the GENSETS, SPARE PARTs,
SUPERVISION and other required services to be rendered by the SUPPLIER as
per the Scope of Supply and Technical Descriptions for the The total contract price
for the GENSETS and the SERVICES isof EURO xxx.xxx.00 (in words:
xxxxxxxxxxxxxxxxxxxxxxxxxx).
4.2

The CONTRACT PRICE is fixed and not subject to escalation.This price is valid for
deliveries of GENSETS or performance of SERVICES until the end of the year,
according to Clause 2.2. if the delivery or performance of SERVICES are delayed due
to circumstances, the SUPPLIER is not responsible for, the contract price for the
delayed part of GENSETS or performance of SERVICES increased by 1% for each
quarter of the year or part thereof.

4.3

The prices stipulated in clause 3.1 do not include VAT. In case VAT incurred, it shall be
added in the amount according to legal regulations.

4.4

The contract price for the GENSETS and the SERVICES does not include any taxes,
customs, duties, including re-export duties, fees on equipment and tools levied by the
PURCHASERS government or the country of the place of the delivery, social security
contribution, stamp duties, or any other dues. All such expenses are to be borne by the
Purchaser who shall indemnify and hold the SUPPLIER harmless accordingly. The
CONTRACT PRICE excludes any duties, taxes or levies except those
withholding taxes which the PURCHASER is bound by law of Pakistan to
deduct.

4.5

The SUPPLIER shall arrange a PERFORMANCE BOND, in favour of the PURCHASER

as follows:
A PERFORMANCE BOND equal to 10% (ten percent) of the CONTRACT PRICE to be
issued to the PURCHASER within 30 days of signing the CONTRACT, the wording as
per PERFORMANCE BOND (Appendix XII).The PERFORMANCE BOND shall be
valid to the end of the WARRANTY period.

45.

Terms of payment

Page - - 13

45.1
Payment of the CONTRACT PRICE shall be effected by the PURCHASER as set out
below.
100% of the CONTRACT PRICE shall be paid out of an irrevocable and confirmed
documentary sight letter of credit.
45.2
For the payments specified in this clause 4.1 an irrevocable and confirmed
documentary sight letter of credit, acceptable to the SUPPLIER and according to the Annex
III, shall be prepared by the PURCHASER and handed over to the SUPPLIER within 20
calendar days after the effective date of this ContractCONTRACT. The letter of credit shall
be confirmed by a first class PakistaniGerman bank and shall be valid at least 3 month
after the date of delivery according to Clause 3.
4.3
In the event the PURCHASER fails to prepare the letter of credit as provided for in
Clause 4.2 above in time the SUPPLIER will extend the delivery dates specified in Clause 2.2
accordingly. The SUPPLIER shall be also entitles to claim liquidated damages for delayed
payment or issue of the letter at a rate of 0.5% of the delayed payment or letter of credit for
every full week of delay, but no more than an aggregate of 5% of the amount of the delayed
payments and/or letter of credit. After reaching the maximum liquidated damages for delay the
SUPPLIER shall grant the PURCHASER a reasonable extension for the payment or the issue
of the letter of credit. If such extension expires and the PURCHASERS has not made the
delayed payments or opened the letter of credit due to the PURCHASERS negligence, the
SUPPLIER shall have the right to terminate the Contract by giving a written notice to the
PURCHASER. The PURCHASER has to indemnify the SUPPLIER from any costs resulting
from performance of this Contract which can not be compensated otherwise.
45.4
All bank charges, duties, fees and taxes or other charges and fees in
connection with the payments to be made hereunder and / or the preparation of
the letter of credit shall be borne and paid by PUCHASER, unless otherwise
agreed in this CONTRACT. All L/C charges outside the country of SUPPLIER shall
be on PURCHASER account except for confirmation charges, which are on
SUPPLIER account.
6.

Variations and SUSPENSION

6.1

The SUPPLIER may undertake minor variations in the form of technical

modifications of the GENSETS and shall inform the PURCHASER thereof,
provided these modifications do not result in additional costs to the PURCHASER
or in a delay of the GENSETS supply or affect the intended performance of the
GENSETS. For major variations the PURCHASERS approval shall be obtained.

6.2

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

6.3

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

6.4

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

6.5

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

Page - - 14

6.8

6.6

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

6.7

When it is necessary to change the GENSETS due to a change in the

APPLICABLE RULES becoming effective or taking place after the formal signing of
the CONTRACT the PURCHASER is required to raise a CHANGE ORDER in
accordance with Article 6.2 above.

SUSPENSION
6.8.1 The PURCHASER may for its convenience or for any other reason whatsoever
suspend the carrying out of the manufacture of the GENSETS by the SUPPLIER in
whole or in part, at any time, by giving written notice thereof to the SUPPLIER
specifying the nature, effective date and anticipated duration of such suspension
and the SUPPLIER shall without undue delay give full effect to and comply with
such notice of suspension.
6.8.2 The SUPPLIER shall be entitled to suspend the carrying out of the manufacture of
the GENSETS in whole or in part by giving written notice thereof to the
PURCHASER in the event any payments to the SUPPLIER are not effected within
30 days of the due date as per Article 4. Upon receipt of the amount(s) due from
the PURCHASER, the SUPPLIER shall resume the carrying out of the manufacture
of the GENSETS forthwith.
6.8.3 In the event of suspension as per Articles 6.8.1 and 6.8.2 above, the PURCHASER
shall pay to the SUPPLIER all additional costs and expenses demonstrably
accruing to the SUPPLIER as consequence of the cessation and resumption of the
manufacture of the GENSETS including costs for proper protection and
maintenance of the GENSETS. The PURCHASER shall pay such costs and
expenses monthly against invoices provided by the SUPPLIER.

6.8.4

In the event of suspension as per Articles 6.8.1 and 6.8.2 above liquidated damages for
late delivery shall not be due and payable for the period of the suspension.

57.

Risk of loss

7.1

Risk of loss and damage to the GENSETS shall be transferred to the PURCHASER
when the GENSETS is delivered at Site.

7.2

Title to the GENSETS shall be transferred to the PURCHASER when the delivered at
SITE.

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

Page - - 15

7.4 PURCHASER will accept the repair of the GENSETS only under the
following conditions:

7.5

a)

The repair does not effect the overall life time of the GENSETS.

b)

The repair does not reduce the efficiency of the GENSETS.

In case of any loss of GENSETS or part thereof in the absence of which

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

7.6 The SUPPLIER shall continue to perform its obligations under the
CONTRACT during the time required for replacement of the lost
relevant GENSETS or part thereof.
By way of clarification it is agreed that the transfer of risk and
ownership of the GENSETS shall not in any manner, absolve the
SUPPLIER of its other obligations and liabilities under the CONTRACT.
5.1 The risk of loss passes to the PURCHASER in accordance with Incoterms 2000 conditions
as stated in Clause 2.1, irrespective of whether only a part of the goods to be supplied are
ready for dispatch or shipped or whether the SUPPLIER is required to render additional
services under the contract, such as transportation or installation. The SUPPLIER, at the
PURCHASERS expense, shall obtain such insurance as the PURCHASER may request in
writing, covering losses which are at the PURCHASERS risk arising out of theft, breakage,
transportation, fire and water damage, as well as out of such other insurable casualties as
the PURCHASER may specify.
5.2 In the event of delay in shipment for which the PURCHASER is responsible, the risk of loss
passes to the PURCHASER as of the date the goods are ready for dispatch. From this date
on the GENSETS will be stocked on account and at the risk of the PURCHASER. The
SUPPLIER shall, however, upon request and expense of the Purchaser, contract the
insurance requested by the PURCHASER.
86.

WARRANTY

86.1

The SUPPLIER warrants that the EQUIPMENTGENSETS is new and in compliance

with the Scope of Supply (Annex I) and Technical Description (Annex II) of the
CONTRACT and is free from any defects in design, materials or workmanship and is of
satisfactory quality and fit for the purpose.

Page - - 16

86.2
The SUPPLIER shall at its own expenses shall and at the sole option of the
SUPPLIER, exchange, replace or repair such parts of the GENSETS which have failed or
which have essential impact on their usability during a period of 24 months after the date of
commissioning of the GENSETS or and 360 months after the transfer of perils to the
PURCHASER, whichever period expires first, solely as a result of a substantial deficiency
which was inherent in the GENSETS or the part thereof before transfer of perils and due
faulty design, faulty material or bad workmanship.
86.32 The PURCHASER must promptly notify the SUPPLIER in writing of obvious defects or
deficiencies after detection thereof. Replaced parts shall become the property of the
SUPPLIER upon request of the SUPPLIER.
86.4
The SUPPLIER is not liable for defects or deficiencies which are resulting from the
following reasons, as long as they are not resulting from a default of the SUPPLIER;
Importer, unsuitable or negligent use, handling and/or operation of the GENSETS by the
PURCHASER or third parties; improper or faulty installation respectively commissioning by
the PURCHASER or third parties; use of spare parts other than Genuine DEUTZ Power
Systems Parts; normal wear and tear; use of unsuitable consumables (such as, fuel, oil,
cooling liquid or any other consumables), particularly the use of consumables not
conciliated in the operation manuals; improper building ground; chemical; electro-chemical
or electric influences.
86.5
The SUPPLIER shall at its own costs and expense rectify defects for which the
SUPPLIER is responsible according to this Article, within one month or other such time to
be agreed in advance between the SUPPLIER and the PURCHASER. During such period
the SUPPLIER shall be liable to pay the PURCHASER liquidated damages of @ 0.50 % of
the CONTRACT PRICE for each full week which on aggregate shall not exceed in any
event 5% of the CONTRACT PRICE during which the SUPPLIER carried out the repairs. If
the SUPPLIER fails to rectify such defects within such time period, the PURCHASER may
grant an extension of time to SUPPLIER to rectify such defects and charge liquidated
damages at the rate mentioned herein above or the PURCHASER may terminate the
CONTRACT and shall be entitled to compensation as mentioned in Article 10.7. The costs
for the rectifying the defects shall be born by the SUPPLIER. If the SUPPLIER neglects to
rectify such defects within the agreed time, the PURCHASER is entitled to execute the
work necessary to rectify the defect at cost and risk to the SUPPLIER, by giving fourteen
(14) days written notice to that effect and charge liquidated damages at the rate mentioned
herein during the rectification period. The PURCHASER shall be obliged to allow after
agreement with the SUPPLIER the required time and opportunity for all repairs and
replacements necessary in SUPPLIERS sole discretion, otherwise the SUPPLIER shall be
exempt from his obligations.
86.5
The PURCHASE shall be entitled to remove any defects or deficiencies by himself or
third parties and to claim from the SUPPLIER compensation or necessary costs only in
urgent case of threat of operational reliability and for defence of out of scale of damages, in
which cases the SUPPLIER shall be informed immediately, respectively if the SUPPLIER is
behind the schedule with rectification of deficiencies.
86.76 During the WARRANTY PERIOD, the SUPPLIER shall have the rights of access to the
EQUIPMENTGENSETS, provided that he has informed the PURCHASER duly in
advance.The SUPPLIER shall bear insofar as the complaint is legitimate out of all costs
directly arising from repair or replacement only the costs for the spare parts including the
delivery costs and the reasonable costs for removal and minting, as well, if this can be fairly
required in the individual case, the costs for eventual necessary mechanics and back staff
of PURCHASER. Other costs shall be borne by the PURCHASER.
86.87 The initial warranty period of the GENSETS will not be extended due to repair or
replacement of parts.If, during the WARRANTY PERIOD, any part of the

Page - - 17

EQUIPMENTGENSETS, is replaced or repaired, the guarantee period as above for that

part is extended by six (6) months.
8.9

The SUPPLIER warrants that:

8.9.1

8.9.2

the SUPERVISION will be provided by the SUPPLIERs INSTALLATION

ADVISORSUPERVISOR with all due skill, experience, knowledge and
expertise and in accordance with sound practices and procedures;
To the extent that breach of the warranty as per sub clause 8.8.1 above has led
to damage to the EQUIPMENTGENSETS, SUPPLIER shall be liable to rectify
the damage and/or replace the damaged portion, DDP SITE.

8.10 LUBE OIL CONSUMPTION

8.10.1

If the Lube oil consumption of the EQUIPMENTGENSETS is not

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

8.10.2

Conditions of measurement for average lube oil.

79.

Start of measurement > 1000 operating hours after COMMISSIONING

Measurement must be carried out over a period of min. 500oh (min. 12
hours after each start) at a constant performance and of the
EQUIPMENTGENSETS between 75%-100%.
For the above the SUPPLIER shall have three attempts to set right any
deficiency.
Costs arising out of the Lube Oil measurement will be not covered by
the SUPPLIER,
If the SUPPLIER requires its personnel during the test run then
SUPPLIER may do so at its own costs and expenses.

Acceptance

9.1

SUPPLIER shall provide a suitably qualified installation advisorsupervisor and

commissioning engineer(s) for the purposes of carrying out the COMMISSIONING,
START-UP, test
run
and
PERFORMANCE
and
RELIABILITY
TESTS.
COMMISSIONING, START UP, Test Run and PROVISIONAL TAKE OVER of the
supplied EQUIPMENTGENSETS shall be executed in accordance with the
Commissioning Procedure (Annex IX).

9.2

The COMMISSIONING of the EQUIPMENTGENSETS is limited to 24 working days

(eight hours per day). In the case of delay caused by reasons attributable to SUPPLIER
and not attributable to PURCHASER the cost of the additional working days shall be
borne by the SUPPLIER. In the case of delay caused by reasons attributable to neither
SUPPLIER nor PURCHASER an amicable solution shall be found. The PURCHASER

Page - - 18

shall inform the SUPPLIER in writing about the date of readiness of START UP and
COMMISSING by giving thirty days notice in advance. Five days before STARTUP and
COMMISSIONING the PURCHASER shall send to the SUPPLIER the completed
installation check list, confirming that the mounting and installation of the
EQUIPMENTGENSETS has been finalized according to SUPPLIERS Technical
Description (Annex II) and project related documentation and that all SITE facilities
necessary for EQUIPMENTGENSETS operation are ready for continuous and
uninterrupted operation.
9.3

The COMMISSIONING of the EQUIPMENTGENSETS shall be carried out by the

SUPPLIER in accordance with the Commissioning procedures contained in Annex IX.

9.4

SUPPLIER guarantees that if tested in accordance with APPENDIX IX the

EQUIPMENTGENSETS shall achieve the Parameters set-forth in APPENDIX IV of this
CONTRACT.

97.51 The PARTIES agree that directly after the commissioning a performance test shall be
executed. For the execution of a performance test the following applies;
a) This Supply Contract and the description of scope of supply for the GENSETS may
include many different performance parameters and technical data related to the
GENSETS. However the PRTIES agree that the only critical performance
parameters related to the GENSETS are electrical output and fuel consumption to
the extent each is specified in Annex IV (hereinafter referred to as ACCEPTANCE
PARAMETERS).
ab) The PURCHASER has to inform the SUPPLIER about the execution of the
performance test in such due time, at least two weeks before the test should be
executed, that the SUPPLIER or his representative are able to participate.
b) Regarding the performance test a protocol will be furnished and signed by
PURCHASER and SUPPLIER or their representatives. This protocol will specify
the PROVISIONALTAKE OVER of the EQUIPMENTGENSETS. The
EQUIPMENTGENSETS will be considered PROVISIONAL TAKE OVER by the
PURCHASER if the Performance ParametersACCEPTANCE PARAMETERS
(Annex IV) are achieved during the PERFORMANCE and RELIABILITY
TEST.acceptance of the GENSETS or the conditional acceptance of the
GENSETS. In the latter case possible defects claimed by the PURCHASER have
to b included in the protocol. The GENSETS will be considered as as
PROVISIONAL TAKE OVERaccepted, if the ACCEPTANCE PARAMETERS are
achieved during the performance test PERFORMANCE and RELIABILITY TEST.
c) If and when tested the EQUIPMENTGENSETS fails to achieve the performance
parametersACCEPTANCE PARAMETERS as per APPNDIX IV the SUPPLIER
shall be afforded a period of one month or such other period as otherwise agreed
between the PARTIES, during which the SUPPLIER at its own costs and expenses
can repair, correct and/or adjust the EQUIPMENTGENSETS, at its own cost and
expense,
so
the
EQUIPMENTGENSETS
achieve
the
performance
parametersACCEPTANCE PARAMETERS as per APPENDIX IV. During such
period the SUPPLIER shall be liable to pay the PURCHASER liquidated damages
of @ 0.50 % of the CONTRACT PRICE for each full week which on aggregate shall
not exceed in any event 5% of the CONTRACT PRICE during which the
SUPPLIER carried out the repairs. If the SUPPLIER fails to rectify such defects
within such time period, the PURCHASER may grant an extension of time to
SUPPLIER to rectify such defects and charge liquidated damages at the rate
mentioned herein above or the PURCHASER may terminate the CONTRACT and
shall be entitled to compensation as mentioned in Article 11.7. The costs for the

Page - - 19

rectifying the defects shall be born by the SUPPLIER. If on retesting the

EQUIPMENTGENSETS
again
fails
to
meet
the
performance
parametersACCEPTANCE PARAMETERS as per Annex IV but achieves the
MINIMUM PERFORMANCE values as specified in Article 9.5 (d) and Annex IV, the
Supplier shall be liable to pay liquidated damages of 0.1% for each 1% shortage in
the PRODUCT which in aggregate shall not exceed, in any circumstances 7.5% of
the CONTRACT PRICE.
d) The PURCHASER has not right to deny the acceptance of the GENSETS and the
signing of the performance test protocol due to minor deficiencies, particularly
deficiencies not concerning the ACCEPTANCE PARAMETERS. The SUPPLIER
shall remedy these deficiencies in a reasonable period.
e) In case of deviations of ACCEPTANCE PARAMETERS from the values specified in
Annex IV the PURCHASER shall grant the SUPPLIER two times a reasonable
period of minimum 8 weeks for remedying such deficiencies. The performance test
for such defaulting GENSET shall the be repeated.MINIMUM PERFORMANCE
shall be achieved, if the performance parametersACCEPTANCE PARAMETERS
set-forth in Appendix IV are met by 90% of the performance
parametersACCEPTANCE PARAMETERS. If the SUPPLIER fails to achieve the
MINIMUM PERFORMANCE, the SUPPLIER shall have failed to perform and
PURCHASER shall be entitled to terminate the CONTRACT, in which case, the
PURCHASER shall be entitled to terminate the CONTRACT and shall be entitled to
compensation as mentioned in Article 11.7. if the EQUIPMENT achieves the
MINIMUM PERFORMANCE then the SUPPLIER shall be liable to pay to
PURCHASER a liquidated damages. The PURCHASER against the
liquidated damages @1% of the CONTRACT PRICE for each 1% reduction
in the PRODUCT(s) will PROVISIONALLY TAKE OVER the EQUIPMENT.
f)

The contractual tolerances and the tolerances of the meausirng system applies in
favour of the SUPPLIER.

g) The GENSETS shall also considered as accepted

a) if it was not possible to conduct the performance test due to reasons the
SUPPLIER was not responsible for;
b) if the PURCHASER refuses to accept the GENSETS, without being entitled for
it;
c) if the PURCHASER refuses to sign a performance test protocol, setup
according to Clause 7.1 c);
d) as soon as the PURCHASER operates the GENSETS.
h) If the PURCHASER is suffering losses due to non-compliance of ACCEPTANCE
PARAMETERS, which is taking place to SUPPLIER fault, the PURCHASER to the
exclusion of any other remedy, shall be entitles to claim liquidated damages. The
amount of liquidated damages shall be calculated as follows:
a) electrical output

0.25% of contract price of deficient gensets per 1%

power deficiency; maximum 2.5% of the contract price
of deficient gensets

b) fuel consumption

0.25% of contract price of deficient gensets per 1%

consumption increase; maximum 2.5% of the contract
price of deficient gensets

Page - - 20

The total of all liquidated damages is limited to a total of 5% of the contract price of
deficient gensets.
79.54

The liability of the SUPPLIER for meeting the ACCEPTANCE PARAMETERS expires;
a)

on successful performance of ACCEPTANCE PARAMETERS during the

performance test; or

b)

on the date of payment by the SUPPLIER of liquidated damages pertaining to

the MINIMUM PERFORMANCE of the EQUIPMENTGENSETS pursuant to
Clause 9.5 (d)7.3 (if applicable); or

c)

After the expiry of WARRANTY PERIOD, unless the SUPPLIER is responsible

for the delay of the PERFORMANCE and RELIABILITY TEST, in which case
said period shall be accordingly extended.

79.65
Any other claims of the PURCHASER resulting from faults of the GENSETS, in
particular any claim of compensation of damages, not occurring on the GENSETS
themselves are exhausted. The PURCHASER shall without delay give his FINAL
ACCEPTANCE of the EQUIPMENTGENSETS after the expiration of the WARRANTY
PERIOD, after which all obligations of the PARTIES under this CONTRACT will come to an
end.
9.7 PERFORMANCE AND RELIABILITY TESTS\
9.7.1 Precondition:
During all test runs SUPPLIERs GENSETS will run parallel with existing generators of the
PURCHASER.
Test run in speed mode: with all GENSETS, PURCHASER provides load sharing signal
according to interface list and electrical overview from SUPPLIER. In case of a mechanical
governor on the PURCHASERS engines, test run with droop cooperation (lower frequency on
full load).
Test run in power mode: with all GENSETS of SUPPLIERs (All SUPPLIERS GENSETS are
set to a fixed value of 90-100% of nominal power) and fluctuation will be covered with existing
engines of PURCHASER.
In case less electrical load or natural gas is available, the PERFORMANCE TEST(S) should be
accomplished on a unit by unit basis. Time for testing must be notified by SUPPLIER to
PURCHASER at least two (2) weeks in advance.
Note: Only possible if PURCHASERs engines are able to run with load sharing line, power
mode.
(According to the precondition in the Technical Descriptions)
9.7.2 Performance Test Run
Testing of the GENSETS shall include a SUPPLIERs guided [72] hours non-stop test run
(excluding oil consumption), operated by PURCHASERs personnel in order to show
performance mentioned in item ________ of this CONTRACT. COMMISSIONING engineer of
the SUPPLIER is only obliged to stay [8 hours] per day at SITE, which is up to him when he will
be available. If the engine fails to perform at the test run, COMMISSIONING engineer has [6]
hours time to solve the problem, without that the test period counts from zero again. If

Page - - 21

COMMISSIONING engineer needs more than [6] hours, then the test run will be started again.
If any of the GENSETS are not able to fulfil the test run due to any other reason, which is not
caused by the SUPPLIER, COMMISSIONING engineer is not obliged to wait until the test run
can be carried out. If test run should be carried out at later stage, PURCHASER bears cost for
travel to the SITE and the accommodation costs in advance unless postponement is caused
due SUPPLIERs fault. After successful test run the SUPPLIER and PURCHASER will sign the
Form of GENSETS Acceptance Report.
9.7.3 RELIABILITY TEST Run:
This RELIABILITY TEST run will last [15 days] and will take place immediately after the [72]
hours PERFORMANCE TEST run. This RELIABILITY TEST Run will be supervised by the
SUPPLIER. During the last (3) three days of this RELIABILITY TEST Run GENSETS data
can be collected.
108.

Overall limitation of liability

8.1 The SUPPLIER shall not be liable to the PURCHASER for any indirect or consiquental loss
or damage whatever of which legal ground, including, but not limited to, loss of profit, loss
of use, loss of production or loss of contracts.
8.2 Without prejudice to the limitations and exclusions of liability in favour of the SUPPLIER the
aggregate liability of the SUPPLIER to the PURCHASER, whether under the Supply
Contract or under Law is limited to 7.5% of the total contract price according to Clause 3.1.
10.1
The SUPPLIER shall be liable to the PURCHASER for any physical loss of or damage
to the EquipmentGENSETS or property of the PURCHASER caused directly or
indirectly by the fault of the SUPPLIER during the performance of the SUPPLIERS
obligations under the CONTRACT.
10.2

The SUPPLIERS liability shall not, in any circumstances, exceed 30% of the
CONTRACT PRICE. If the SUPPLIER incurs liability exceeding the said amount, the
PURCHASER shall indemnify, defend and hold the SUPPLIER harmless.

10.3

The limit as specified section 10.2 above shall not include SUPPLIERs liability
a)

under article 2 for the Scope of Supply in accordance with

Annex I and for the Technical Description in accordance
with Annex II.

b)

under Article 8, Article 9 and Annex IV (Warranties and

Performance)

c)

in case of willful acts and willful negligence.

d)

to achieve the Minimum Performance as per Article 9.5 (d).

10.4 Any liability of the SUPPLIER shall cease at the end of the respective WARRANTY
PERIOD, applicable for the part of works due to which the damage was caused.
10.5

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

Page - - 22

do the limitations and exclusions stated under this Article apply to

damages or loss caused by wilful act on the part of the PURCHASER.
10.6 Neither PARTY shall, in any event or under any circumstances, be liable to the
other PARTY for any loss of use or production, unavailability of the
EQUIPMENTGENSETS, loss of profit, cost of capital, loss of interest or
revenues, cost of purchased or replacement power or for any direct, indirect
or consequential damages or losses whatsoever.
11.

TERMINATION OF THE CONTRACT

11.1

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

11.2

The PURCHASER shall have the right to terminate the CONTRACT for any
material breach by the SUPPLIER by giving thirty (30) days prior written notice to
the SUPPLIER of its intention to terminate the CONTRACT in order to allow the
PARTIES to reach a mutually beneficial solution thereof, if one of the following
conditions has occurred due to reasons other than Force Majeure:

11.3

The delivery of the EQUIPMENTGENSETS according to the PROJECT TIME

SCHEDULE (APPENDIX VI), is delayed due to reasons for which the SUPPLIER is
liable to pay liquidated damages, when the maximum liquidated damages payable
limit is reached.

11.4

If, for the reasons attributable to SUPPLIER EQUIPMENTGENSETS fails to

achieve the Minimum Performance as per Article 9.5 (d) then the PURCHASER
shall be entitled to terminate the CONTRACT.

11.5

If, for the reasons attributable to SUPPLIER, SUPPLIER fails to perform any or all
of the PERFORMANCE and RELIABILITY TESTS within a maximum period of
[01 months] in respect of the EQUIPMENTGENSETS in order to meet the
PRODUCT Performance ParametersACCEPTANCE PARAMETERS as specified in
Annex IV including Minimum Performance as per Article 9.5 (d) and Annex IV then
the PURCHASER shall be entitled to terminate the CONTRACT.

11.6

Notwithstanding anything contained in this CONTRACT and in particularly Article 10,

if the PURCHASER terminate the CONTRACT in pursuance of the Article 11.3, 11.4
and 11.5, in such an event(s) the SUPPLIER shall refund the full amount of
CONTRACT PRICE and in addition 30% of CONTRACT PRICE to the
PURCHASER. Upon termination under this article SUPPLIER shall dismantle,
remove and transport the EQUIPMENTGENSETS to [_________] at SUPPLIER own
risk, cost and expense.

11.7

If the SUPPLIER becomes bankrupt or insolvent, has a receiving order against

him, compounds with his creditors, or carries on business under a receiver, trustee
or manager for the benefit of his creditors, or goes into liquidation.

Page - - 23

11.8

The carrying out of the CONTRACT has been suspended by the SUPPLIER for
more than three (3) months and the payments have not been effected by the
PURCHASER during the said period; or

11.9

The PURCHASER has issued a suspension order and the EQUIPMENTGENSETS

suspended are not reinstated within six (6) months after receipt by the SUPPLIER
of the suspension order; or

11.10

The PURCHASER becomes bankrupt or insolvent, has a receiving order against

him, compounds with his creditors, or carries on business under a receiver, trustee
or manager for the benefit of his creditors or goes into liquidation.

11.112

Each of the PARTIES shall be entitled to terminate the CONTRACT by submitting

thirty (30) days prior written notice to the other PARTY in the event that one or
more events of FORCE MAJEURE in accordance with Article 22 have occurred for
a period of six (6) months or more.

129.

Force Majeure

12.1

Any delay in or failure of performance of either party hereto shall not

constitute default hereunder, or give rise to any claim in damage, if
and to the extent such delay in or failure of performance is caused by
an event of Force Majeure.

12.2

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

12.3

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

12.4

If Force Majeure should continue for a period in excess of [six (6)]

months, both parties shall consult and agree whether to terminate the
CONTRACT or how to adapt the CONTRACT taking into consideration
the effects of Force Majeure on the Project Time Schedule. If no
agreement can be reached between the parties, each party may give

Page - - 24

notice of termination of the CONTRACT to the other party. In such case,

if the parties cannot settle the remaining mutual claims and obligations
as a consequence of the termination, the matter shall be decided by
Arbitration under the terms of Article 14.
9.1 The delivery dates and the time for fulfillment of any of the obligations of SUPPLIER and
PURCHASER shall be reasonably extended in case of any delay arising out of an event of
Force Majeure such as, but not limited to theft, fire, flood, epidemics, earth quakes or other
natural catastrophes, war blockades, embargos, industrial conflicts, in particularly strikes
and lock outs or any other event beyond the wishes and control of the SUPPLIER or any
sub-supplier. The SUPPLIER shall also not be held responsible if the circumstances occur
during a delay in delivery. About the aforementioned circumstances the SUPPLIER shall
notify the PURCHASER as soon as reasonably practicable regarding commencement and
termination of these delays. If the performance of the Contract is substantially prevented,
hindered or delayed for a single period of more than 90 days or on aggregate period of
more than 150 days on account of one or more events of Force Majeure during the running
time of the Contract, the PARTIES will attempt to develop mutually satisfactory solution
within 30 days. If the PARTIES cannot reach a mutually acceptable solution within this time
period either PARTY may terminate the CONTRACT by giving a written notice to the other.
The PURCHASER has to indemnify the SUPPLIER from any costs resulting from
performance of this Contract which can not be compensated otherwise.
13.

OFFICIAL APPROVALS
13.1 The EQUIPMENTGENSETS shall comply with applicable regulations and
requirements of the authorities within the country of construction of the
EQUIPMENTGENSETS, valid on the effective date of this CONTRACT.
13.2 The SUPPLIER shall provide the applicable documentation related to the
EQUIPMENTGENSETS in accordance with Project Time ScheduleDocument
Submittal Schedule (Annex XVI). The PURCHASER is responsible for obtaining all
necessary approvals, permits, licences within the country of construction of the
EQUIPMENTGENSETS.

14.

REPRESENTATIVES

14.1
For the EQUIPMENTGENSETS supply phase of the project the SUPPLIER and
PURCHASER shall name Project Managers for the project co-ordination.
150.

Collateral agreements and effectiveness of the Contract

150.1This Contract shall become effective from the date of signature thereof by both PARTIES.
150.2Collateral agreements and changes of the Contract shall be valid only when executed In
writing.
150.3Previous agreements on the subject matter of this Contract shall become invalid upon
signature of the Contract.
150.4in the event that individual provisions of the Contract have become or become invalid
upon conclusion or during the term of this Agreement, the remaining provisions shall,
nevertheless remain valid. The PARTY will make efforts to agree on new provisions instead
of the invalid ones which will be legally effective, correspond to the tenor of this Contract
and approach the purpose of the invalid provision as much as possible.
150.5In the event the down payment or payments guarantees according to Clause 4 are not
executed within 12 months after the date of effectiveness of the contract, the Contract will
be automatically cancelled.
10.6 In the event of any inconsistency or conflict between the terms and
conditions of this Contract and the annexes to this Contract, the documents
should prevail each other in the following order.

Page - - 25

a)
b)

the Contract itself

the Annexes in order of their numbering

10.7

If one or several provisions of this Contract should be legally invalid for any
reason whatsoever, the validity of the remaining provisions shall not be
affected thereby. In such case, the PARTIES shall replace the invalid
contractual provision by such other provision coming as close as possible to
the legal and economic purpose of the Contract. The same shall apply
mutatis mutandis to any nuclear provision contained in this Contract. If the
PARTIES fail to meet their duty to replace or complete any such provision,
the above mentioned requirements of this Contract.

161.

Applicable law and Jurisdiction

161.1 All dispute and differences which may arise out of or in connection wit the
present CONTRACTAgreement, or the breach thereof, which cannot be settled
amicably between the PARTIES shall be finally settled, excluding any other
jurisdiction but for enforcement of the arbitral award, by arbitration under the
Pakistan Arbitration Act 1940Rules of arbitration of the international chamber of the
commerce (icc, paris) by an arbitration committee of three arbitrators.
161.2 The place of arbitration proceedings shall be Lahore, PakistanGeneva,
Switzerland. The language of arbitration shall be the English language.
116.3 The arbitration award shall be final and binding on both Parties and subject
to no appeal and shall deal with the question of the costs of arbitration and all
matters relating thereto.
161.4 The PARITES agree that this Agreement shall be governed by and construed
in accordance with the laws of Switzerland, with the exception of the United Nations
Conventions on the International Sale of Goods (CISG).
The CONTRACT shall be construed and interpreted in all respects in accordance with its own
provisions and all agreements concluded between the PARTIES in connection
therewith, and, subsidiary, in accordance with Pakistani law and the exclusive
jurisdiction of the Pakistani Courts.
17.

TAXES

17.1

Any taxes, duties, fees, and other fiscal charges, including customs duties, directly or
indirectly levied by any authority or country outside Pakistan in connection with the
CONTRACT, its conclusion or its execution shall be borne and directly paid by
SUPPLIER.

17.2

Except as specifically otherwise agreed in the CONTRACT , any taxes, duties, fees,
and other fiscal charges, including customs duties, directly or indirectly levied by the
authorities of Pakistan, including government appointed surveyors, in connection with
the CONTRACT, its conclusion or its execution (hereinafter collectively referred to as
"Impositions") shall be borne and directly paid by PURCHASER over and above the
agreed prices stated or referred to in the CONTRACT.

17.3

The all or any income tax due towards the SUPPLIER in relation to this
CONTRACT whether in Pakistan or outside Pakistan shall be sole
responsibility of the SUPPLIER.

17.4

If SUPPLIER shall effectively obtain a credit against any German taxes payable on the
basis of taxes paid by PURCHASER on behalf of SUPPLIE in Pakistan, which are
evidenced by tax receipts, in the English language, handed over to SUPPLIER, then

Page - - 26

SUPPLIER shall pass on to PURCHASER the net benefit of such tax credit and
reimburse to PURCHASER the corresponding amount of such tax credit.

17.5

Both Parties agree to co-operate to eliminate or reduce any

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

18.

PATENTS AND USE OF DOCUMENTATION

18.1

All drawings and technical documents relating to the

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

18.2

The SUPPLIER agrees to indemnify the PURCHASER against any losses,

expenses, responsibilities and claims arising from the EQUIPMENTGENSETS
dealt with in this CONTRACT, which constitute an infringement of the patent
rights of a third party.

19.

ASSIGNMENT AND SUB-LETTING

19.1

Either PARTY shall not assign the CONTRACT unless mutually agreed between the
Parties. The SUPPLIER shall be responsible for all EquipmentGENSETS supplied by
all SUB-SUPPLIERS.

20.

EFFECTIVE DATE OF CONTRACT

20.1

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

IN WITNESS WHEREOF, the parties hereto have caused this document to be executed and
signed as follows on the day and date first above written.

Page - - 27

_____________________________
Place

______________________________________
Date

____________________________________________________________________
for Rupali Polyester Ltd.
_____________________________
Place

______________________________________
Date

____________________________________________________________________
for DEUTZ Power Systems Gmbh
Witness:
__________________________
Name: ____________

Witness:
_________________________
Name: ____________