1. Vietsovpetro
Draft contract
SECTION 2.0
GENERAL TERMS AND CONDITIONS
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TABLE OF CONTENTS
TABLE OF CONTENTS ....................................................................................................................... 2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
2.20
2.21
2.22
2.23
2.24
2.25
2.26
2.27
2.28
2.29
2.30
2.31
2.32
2.33
Subcontract Term .......................................................................................................................... 4
SUBCONTRACTOR Responsibilities.......................................................................................... 4
VIETSOVPETRO Responsibilities ............................................................................................. 16
Offshore Operations .................................................................................................................... 17
Title ............................................................................................................................................. 20
Guaranteed Completion Date ...................................................................................................... 22
Subcontract Schedule Compliance .............................................................................................. 23
Suspension................................................................................................................................... 24
Damages for Delay ...................................................................................................................... 26
Force Majeure ............................................................................................................................. 27
Inspection .................................................................................................................................... 32
Loadout, Sailaway, Handover, Provisional Acceptance and Final Acceptance .......................... 35
Warranty, Correction of Defects and Nonconforming Work ...................................................... 40
Liens and Claims ......................................................................................................................... 46
Liabilities and Indemnities .......................................................................................................... 47
Technology, Rights Thereto and Confidentiality Thereof........................................................... 55
Insurance ..................................................................................................................................... 59
Default and Termination ............................................................................................................. 62
Dispute Resolution ...................................................................................................................... 69
Safety, Health and Environment ................................................................................................. 72
Taxes and Import Duties ............................................................................................................. 74
Assignment and Subcontracting .................................................................................................. 78
Audit ............................................................................................................................................ 78
Security........................................................................................................................................ 79
Firearms, Alcohol, Controlled Substances and Behaviour .......................................................... 81
Changes ....................................................................................................................................... 81
VIETSOVPETRO Supplied Data ............................................................................................... 83
Representations and Warranties................................................................................................... 85
Governing Law ............................................................................................................................ 87
Subcontract Price......................................................................................................................... 88
Notices/ Representatives of the Parties ....................................................................................... 88
Business Ethics ............................................................................................................................ 89
Limitation of SUBCONTRACTOR‟s Liability........................................................................... 89
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Attachments
2-1
2-2A
2-2B
2-2C
2-3
2-4
2-5
2-6
2-7
2-8
2-9
2-10
2-11
2-12
2-13
2-14
Subcontract-Specific Details
Approved Subcontractors and Suppliers
Significant Subcontractors Not Yet Approved by VIETSOVPETRO
SUBCONTRACTOR‟s Sourcing Plan
Loadout, Sailaway, Handover, Provisional Acceptance and Final Acceptance
NORL
Sailaway Certificate
Handover Certificate
Provisional Acceptance Certificate
Final Acceptance Certificate
Performance Bond
Form of Parent Company/ Corporate Indemnity Agreement
Code of Ethics and Conduct
Consents and Permits
Health and Safety Guidelines
Environmental Guidelines
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2.1
Subcontract Term
2.1.1
(a)
This Subcontract shall commence as of the Effective Date and shall continue in effect until
whichever of the following is applicable (such period being referred to as the “Subcontract
Term”):
(i)
(ii)
such earlier date as may be agreed to in writing by the Parties; or
(iii)
(b)
VIETSOVPETRO has issued the Final Acceptance Certificate and the warranties and
guarantees contained in Section 2.13 have expired and all payments required hereby
have been made; or
termination as provided for herein.
Notwithstanding the foregoing, the provisions contained herein which stipulate liability or
which specify another continuing obligation, in each case in relation to matters occurring or
arising during the Subcontract Term, shall survive the Subcontract Term according to the time
periods stipulated in such provisions. If no such periods are so stipulated then relevant
statutes of repose and statutes of prescription or limitation regarding prescription or limitation
of Subcontract claims or causes of action shall apply.
2.1.2
VIETSOVPETRO may terminate this Subcontract as provided in Sections 2.10 and 2.18 and other
provisions of this Subcontract. SUBCONTRACTOR may terminate this Subcontract only as provided in
Section 2.10 and Section 2.18.9.
2.2
SUBCONTRACTOR Responsibilities
2.2.1
General
In accordance with the terms of this Subcontract, SUBCONTRACTOR shall be the single point of
responsibility to:
(a)
perform the Work:
(i)
(ii)
in a good and workmanlike manner;
(iii)
to the standards included in this Subcontract; and
(iv)
(b)
with diligent dispatch;
in accordance with Good Engineering and Operating Practices.
furnish, undertake, provide or cause to be provided, in a good and workmanlike manner, all
management, services, supervision, testing, labour, personnel, materials, supplies, plant and
equipment, machinery, facilities and other items whatsoever necessary to provide, in accordance
with the Subcontract; and project management, associated engineering, associated procurement,
relevant required construction, transportation, installation, associated testing, hook-up and precommissioning for the Contract Objects and Subcontract Objects in accordance with Applicable
Codes and Standards, manufacturers‟ warranties and Good Engineering and Operating Practices,
Applicable Law and all other requirements of this Subcontract; and
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(c)
2.2.2
complete the Work in accordance with the Subcontract Schedule so as to achieve Provisional
Acceptance in accordance with the Guaranteed Completion Date set out in Section 9.1.
Quality Management
(a)
(b)
2.2.3
SUBCONTRACTOR shall establish, operate and maintain a quality system for the entire
Work conforming to recognized international standards, such as the ISO 9000 series of
standards. SUBCONTRACTOR shall implement a quality control/ assurance program for the
Work consistent with the requirements of Section 4.0. SUBCONTRACTOR, as part of its
quality system, shall ensure that each Subcontractor and Supplier establishes and maintains a
satisfactory quality control/ assurance program specific to the Work that it will perform.
SUBCONTRACTOR‟s quality management responsibilities shall include planning and
executing a satisfactory program of quality audits. Company and VIETSOVPETRO shall be
entitled to participate in any quality audits conducted by SUBCONTRACTOR, and to carry
out its own quality audits of any part of the Work. SUBCONTRACTOR shall co-operate fully
with the Company representatives and VIETSOVPETRO representatives performing such
audits. SUBCONTRACTOR shall ensure that any corrective actions identified by any quality
audit are satisfactorily implemented without delay.
Subcontractors and Suppliers
(a)
Attachment 2-2A lists SUBCONTRACTOR‟s nominated Subcontractors for certain parts of the
Work to be subcontracted and SUBCONTRACTOR‟s nominated Suppliers for certain parts of
SUBCONTRACTOR‟s Supply to be procured that are in each case deemed to be approved by
VIETSOVPETRO as at the Effective Date.
(b)
Attachment 2-2B lists SUBCONTRACTOR‟s proposed candidates for certain parts of the Work
to be subcontracted and proposed candidates for certain parts of SUBCONTRACTOR‟s Supply
to be procured that in each case:
(i)
are not approved by VIETSOVPETRO as of the Effective Date; and
(ii)
are known as at the Effective Date to be candidates that if selected by
SUBCONTRACTOR and if approved by VIETSOVPETRO shall become Significant
Subcontractors.
(c)
Except for Subcontractors and Suppliers that are already deemed approved by VIETSOVPETRO
and included in Attachment 2-2A, SUBCONTRACTOR shall seek and obtain
VIETSOVPETRO‟s approval for any proposed Subcontractor for parts of the Work and/ or
proposed Supplier for part of SUBCONTRACTOR‟s Supply. SUBCONTRACTOR shall seek
and obtain such approval at least Forty (40) days prior to SUBCONTRACTOR‟s proposed
implementation of such arrangements.
(d)
SUBCONTRACTOR may use any of its Affiliates to perform any part of the Work or supply
any part of SUBCONTRACTOR‟s Supply subject to SUBCONTRACTOR seeking
VIETSOVPETRO‟s consent in advance of any such proposed use, and VIETSOVPETRO,
acting reasonably, having the right to withhold such consent if VIETSOVPETRO has good
reason to do so.
(e)
Where VIETSOVPETRO‟s approval of SUBCONTRACTOR‟s proposed Subcontractors and
Suppliers is required under the Subcontract, SUBCONTRACTOR shall not be entitled to any
addition to the Subcontract Price or any changes to the Subcontract Schedule as a result of
VIETSOVPETRO‟s non-approval of any proposed Subcontractor or Supplier.
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VIETSOVPETRO shall act reasonably in deciding whether to approve any proposed
Subcontractor or Supplier, but VIETSOVPETRO‟s experience of poor performance of a
proposed Subcontractor or Supplier shall, without need for further justification, be sufficient
grounds for non-approval.
(f)
(g)
SUBCONTRACTOR is solely responsible for the performance, or non-performance, of
Subcontractors and Suppliers except as expressly stated otherwise in the Subcontract.
(h)
2.2.4
SUBCONTRACTOR shall provide VIETSOVPETRO with copies of all SUBCONTRACTOR‟s
subcontracts and purchase orders in relation to the Work. Such subcontracts and purchase orders
shall be priced where they relate to Reimbursable Work, but may otherwise be unpriced.
VIETSOVPETRO shall be entitled to invoke the provisions of Section 5.12.4 in the event of
SUBCONTRACTOR‟s failure to honour its payment obligations towards Subcontractors and/ or
Suppliers.
Permits, Licences, Consents
(a)
SUBCONTRACTOR shall obtain and maintain in effect all permits, certificates, licences,
consents, visas, customs clearances, security clearances, vessel clearances and inspections, and
the like necessary or advisable for the performance of the Work in accordance with the terms of
this Subcontract other than those consents and permits that are the responsibility of Company
and/ or VIETSOVPETRO and are listed in Attachment 2-12. VIETSOVPETRO shall provide
all reasonably necessary information and documents to SUBCONTRACTOR and shall assist
SUBCONTRACTOR in obtaining the said consents and permits. SUBCONTRACTOR shall, in
good time before they are required, produce a complete listing of all said consents and permits,
and request VIETSOVPETRO to provide any reasonably necessary information, documents, or
assistance in respect thereof. SUBCONTRACTOR shall be solely responsible for any delay or
failure on SUBCONTRACTOR Group‟s part in obtaining at the due time or maintaining in
effect any required consent or permit.
(b)
SUBCONTRACTOR shall provide all reasonably necessary information and documents to
Company and/ or VIETSOVPETRO and shall assist Company and/ or VIETSOVPETRO in
obtaining all applicable permits listed in Attachment 2-12 and any other permits that Company
and/ or VIETSOVPETRO needs to obtain in relation to the Work.
(c)
SUBCONTRACTOR shall provide permitting support in relation to the Work. Such support
shall include:
(i)
(ii)
preparation of draft responses to enquiries from Governmental Authorities or any of
their respective representatives;
(iii)
presentations at hearings or meetings with Governmental Authorities; and
(iv)
(d)
attendance at meetings with VIETSOVPETRO and relevant Persons designated by
VIETSOVPETRO;
such other services in connection with SUBCONTRACTOR‟s operations as
VIETSOVPETRO may request from time to time.
If at any time SUBCONTRACTOR becomes aware of any required consent or permit,
SUBCONTRACTOR shall immediately give notice thereof to VIETSOVPETRO.
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SUBCONTRACTOR shall promptly obtain and deliver to VIETSOVPETRO a copy of all such
consents and permits it is required to obtain under this Section.
2.2.5
Importation of SUBCONTRACTOR‟s Supply, the Subcontract Objects, and SUBCONTRACTOR‟s
Spread
(a)
SUBCONTRACTOR represents and warrants that it is fully familiar with and
knowledgeable of the requirements of the Government of Vietnam regarding the
associated construction of goods and services both from within and from outside the
Socialist Republic of Vietnam including particularly those relating to the Government of
Vietnam Ministry of Planning and Investment Circular No. 04/2012/TT-BKHDT dated
13 August 2012 and other Vietnamese applicable legal document providing the list of
machinery, equipment, spare parts, special-use vehicles, raw materials, supplies and
semi-finished products which can be domestically produced, as from time to time.
(ii)
The Parties agree that each Party shall duly fulfill all its obligations with regard to the
importation of items into the Socialist Republic of Vietnam, as set out in this Section
2.2.5 and other Sections of this Subcontract, so that Company and VIETSOVPETRO
and SUBCONTRACTOR shall have the full benefit of the Import Tax Exemption
referred to in Section 2.21.5.
(iii)
SUBCONTRACTOR is responsible for the preparation of all necessary data for all
SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s
Spread to be imported into the Socialist Republic of Vietnam in accordance with
Applicable Laws. For avoidance of doubt, VIETSOVPETRO is responsible for the
preparation of all necessary data for all VIETSOVPETRO‟s Supply; Contract Objects
and any of VIETSOVPETRO‟s marine vessels and equipment to be imported into the
Socialist Republic of Vietnam in accordance with Applicable Laws.
(iv)
Not used.
(v)
Company and VIETSOVPETRO will incorporate SUBCONTRACTOR‟s data into its
respective overall quota and shall submit it to the relevant Governmental Authorities,
obtain their approvals, and distribute a copy of the relevant parts of the approved quota
to SUBCONTRACTOR.
(vi)
(b)
(i)
SUBCONTRACTOR is responsible for providing clarification in response to all
questions by the Governmental Authorities of the Socialist Republic of Vietnam, or
Persons acting on behalf of such Governmental Authorities, regarding the importation of
SUBCONTRACTOR‟s Supply, the Subcontract Objects, and SUBCONTRACTOR‟s
Spread. Without relieving SUBCONTRACTOR of its responsibility for the timely and
proper provision of all data and documentation to allow the securing by Company and/
or VIETSOVPETRO of all required approvals and provision of required clarification,
VIETSOVPETRO
shall,
if
required
by
SUBCONTRACTOR,
give
SUBCONTRACTOR reasonable assistance and support in providing such clarification.
SUBCONTRACTOR is responsible for the timely preparation and submittal of pro forma
invoices in appropriate form in accordance with Applicable Law, and the requirements of the
Government of Vietnam, to support SUBCONTRACTOR items on the Company Importation
Quota. SUBCONTRACTOR shall cross-reference the pro forma invoices to the Company
Importation Quota, clearly indicating the section and subsection of each invoice item‟s location
on the Company Importation Quota. SUBCONTRACTOR shall submit such pro forma invoices
to VIETSOVPETRO who will submit to the Company or the Government of Vietnam.
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(c)
SUBCONTRACTOR is responsible for timely preparation and submittal to VIETSOVPETRO
who will submit to the Company or the Government of Vietnam of copies of bills of lading or air
waybills, actual invoices, packing lists, confirmation of quality inspection, and any other
pertinent documentation.
(d)
SUBCONTRACTOR is responsible for arranging all inspections required by the Government of
Vietnam for importation of SUBCONTRACTOR‟s Supply, Subcontract Objects and
SUBCONTRACTOR‟s Spread, and for prompt and satisfactory resolution of any matters arising
from such inspections.
(e)
SUBCONTRACTOR is responsible for all of SUBCONTRACTOR‟s costs associated with
compliance with the importation regulations of the Government of Vietnam. Such costs shall
include any demurrage, storage, standby or other charges arising in consequence of
SUBCONTRACTOR‟s failure to comply with such regulations or to secure approvals from the
Government of Vietnam in a timely and proper manner. SUBCONTRACTOR is also responsible
for such costs to the extent that any failure by Company to secure Import Tax Exemption of
SUBCONTRACTOR‟s Supply and/ or the Subcontract Objects and/ or SUBCONTRACTOR‟s
Spread in a timely manner is attributable to SUBCONTRACTOR, including
SUBCONTRACTOR‟s failure in the provision of timely and proper data and documentation.
(f)
SUBCONTRACTOR is responsible to import SUBCONTRACTOR‟s Supply, Subcontract
Objects and SUBCONTRACTOR‟s Spread in a timely manner to meet the Subcontract
Schedule. Any errors, omissions or delays in or resulting from the importation process for which
SUBCONTRACTOR is responsible in accordance with the Subcontract will not be grounds for a
Change. In addition, any errors, omissions or delays in or arising from Company and/ or
VIETSOVPETRO failing to secure Import Tax Exemption of SUBCONTRACTOR‟s Supply
and/ or the Subcontract Objects and/ or SUBCONTRACTOR‟s Spread in a timely manner that is
attributable to SUBCONTRACTOR, including SUBCONTRACTOR‟s failure in the provision
of timely and proper data and documentation, shall not be grounds for a Change.
(g)
SUBCONTRACTOR shall prepare all documentation and do everything else necessary for the
importation and re-exportation (as applicable) of any items furnished by SUBCONTRACTOR
not forming part of the Subcontract Objects or SUBCONTRACTOR‟s Supply, and of all
consumables and temporary materials required for the Work. SUBCONTRACTOR shall also
prepare for submission to Vietnamese Customs and/ or other Government of Vietnam any reports
required to account satisfactorily for the final disposition of all items imported permanently and
temporarily for the Work. SUBCONTRACTOR shall do all this in a timely manner to meet the
Subcontract Schedule, and in accordance with all Applicable Laws. Any errors, omissions or
delays in or resulting from the importation and re-exportation process for which
SUBCONTRACTOR is responsible in accordance with this Subcontract will not be grounds for
a Change.
(h)
SUBCONTRACTOR shall prepare all documentation and carry out all activities for the
importation and re-exportation (as applicable) of all SUBCONTRACTOR‟s Spread.
SUBCONTRACTOR shall do so in a timely manner to meet the Subcontract Schedule and in
accordance with Applicable Laws. Any errors, omissions or delays in or resulting from the
importation and re-exportation process for which SUBCONTRACTOR is responsible in
accordance with this Subcontract will not be grounds for a Change.
(i)
Without prejudice to the remainder of this Section 2.2.5, SUBCONTRACTOR is solely
responsible for making all necessary arrangements for the proper and timely exportation from,
importation into, and re-exportation from any country of SUBCONTRACTOR‟s Supply,
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VIETSOVPETRO Furnished Material (after receipt from VIETSOVPETRO), and
SUBCONTRACTOR‟s Spread and the Subcontract Objects in relation to the Work. Except only
as expressly provided otherwise in Section 2.21.5, SUBCONTRACTOR shall make all such
arrangements at its own cost, and pay all applicable taxes, duties, tariffs, levies, surcharges, fees,
and other charges. SUBCONTRACTOR shall expressly be liable for any import duties, taxes,
and the like applicable to the re-export by SUBCONTRACTOR Group from Vietnam, or the
retention by SUBCONTRACTOR Group, of SUBCONTRACTOR items initially imported into
Vietnam in connection with the Work.
2.2.6
SUBCONTRACTOR‟s Sourcing Arrangements
(a)
Where SUBCONTRACTOR‟s sourcing plan for the Work (Attachment 2-2C) indicates that
elements of the Work will be performed in particular locations, or that items of
SUBCONTRACTOR‟s Supply will be obtained from particular countries, proposed changes in
such specified locations or sources of supply will require VIETSOVPETRO‟s prior written
agreement.
(b)
VIETSOVPETRO, acting reasonably, will not be required to agree to any such proposed change
referred to in Section 2.2.6(a). VIETSOVPETRO shall be entitled to make its agreement
conditional upon SUBCONTRACTOR‟s reimbursement of any extra costs reasonably incurred
by VIETSOVPETRO as a result of the change.
(c)
SUBCONTRACTOR must request VIETSOVPETRO‟s agreement to any proposed change
referred to in Section 2.2.6(a) not later than Forty (40) days prior to implementation of the
change, and in any event in sufficient time to be able to comply with the sourcing plan set out in
Attachment 2-2C if VIETSOVPETRO, acting reasonably, does not approve the proposed
change. Each such request must clearly describe the reasons for the proposed change, and
provide appropriate substantiation.
(d)
If SUBCONTRACTOR makes a change in its intended sourcing arrangements as described in
Attachment 2-2C, and as a result Company and/or VIETSOVPETRO
(i)
incurs an increase (on an aggregate basis) in Vietnamese value added tax imposed on
goods; and/ or
(ii)
incurs an increase (on an aggregate basis) in Import Taxes payable on
SUBCONTRACTOR‟s Supply sourced outside the Socialist Republic of Vietnam; and/
or
(iii)
incurs an increase (on an aggregate basis) in Vietnamese Business Income Tax that
Company reimburses VIETSOVPETRO pursuant to the Contract; and/ or
(iv)
incurs any costs, expenses, losses and/ or penalties, of any nature whatsoever in each
case and subject only to authentication by a statement from a certified public accountant
and with no need for further substantiation, under Applicable Law,
then all such increased costs, expenses, and/ or penalties for which VIETSOVPETRO provides
reasonable substantiation shall be to SUBCONTRACTOR‟s account.
(e)
VIETSOVPETRO shall be entitled, having given SUBCONTRACTOR written notice of such
increased costs, expenses and/ or penalties suffered or incurred by Company and/or
VIETSOVPETRO, and at its option to:
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(i)
(ii)
2.2.7
deduct the amount thereof from payments otherwise due to SUBCONTRACTOR; or
allow SUBCONTRACTOR to reimburse the amount thereof, upon VIETSOVPETRO‟s
first written request.
General Access and Information
(a)
SUBCONTRACTOR shall permit full and free access to the Work at any Site, including
those of Subcontractors and Suppliers, at any reasonable time by any representative of, and
any personnel nominated by, Company and/ or VIETSOVPETRO. SUBCONTRACTOR,
with the prior approval of VIETSOVPETRO, shall permit representatives of Governmental
Authorities and Company to enter onto and inspect the Site, with reasonable advance notice
and escorted access to the Work. SUBCONTRACTOR may provide, and each such person
shall accept, reasonable safety and security measures implemented by SUBCONTRACTOR.
SUBCONTRACTOR shall also promptly provide information reasonably requested by
VIETSOVPETRO, Company, Governmental Authorities, or any of their representatives.
SUBCONTRACTOR shall include appropriate provisions in all its subcontracts and purchase
orders to ensure the proper enforceability of the provisions of this Section 2.2.7(a) and
Section 2.11.5(a).
(b)
SUBCONTRACTOR hereby grants to VIETSOVPETRO and/or its invitees permission to
enter upon and be present at any SUBCONTRACTOR-owned Construction Site or
Fabrication Site, as further described in Section 2.2.7(d).
(c)
Not used.
(d)
SUBCONTRACTOR‟s permission pursuant to Section 2.2.7(b) shall:
(i)
Not used;
(ii)
entitle VIETSOVPETRO, Company and any VIETSOVPETRO invitees to enter
upon and be present at the respective Construction Site or Fabrication Site at any time
before Final Acceptance or, in the event of VIETSOVPETRO‟s termination of the
Subcontract or any part thereof pursuant to Section 2.18.1, before the equivalent of
Final Acceptance has been achieved by VIETSOVPETRO and any Replacement
Contractor(s), in order for VIETSOVPETRO to be able to exercise quiet enjoyment
of the full and free access rights granted under Section 2.2.7(a) and its rights under
Section 2.18.2; and
(iii)
entitle VIETSOVPETRO and any Replacement Contractor(s) to perform work on the
Contract Objects and/or Subcontract Objects, SUBCONTRACTOR‟s Supply, and
any VIETSOVPETRO Furnished Material at the respective Site, and to remove any
of the same from such Site when VIETSOVPETRO has terminated the Subcontract or
any part thereof pursuant to Section 2.18.1. Furthermore, SUBCONTRACTOR shall
permit VIETSOVPETRO and any Replacement Contractor(s) to use any
SUBCONTRACTOR Group-owned facilities, utilities, plant and equipment at any
such Site for completion or removal of the Contract Objects and/or Subcontract
Objects following termination of the Subcontract or any part thereof pursuant to
Section 2.18.1, and VIETSOVPETRO shall compensate SUBCONTRACTOR for
such use in accordance with Section 2.18.5. For the avoidance of doubt it is here
stated that SUBCONTRACTOR‟s permission pursuant to Section 2.2.7(b) is not
intended as and shall not be construed to be an agreement to pledge such property and
assets as security or as agreement to permit a lien, encumbrance or any other security
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interest on such property and assets. All SUBCONTRACTOR Group-owned
facilities, utilities, plant and equipment shall remain under the ownership and
administrative management of the owner who is a member of the
SUBCONTRACTOR Group and shall be controlled by such owner and operated by
SUBCONTRACTOR Group Personnel. SUBCONTRACTOR shall instruct its
Personnel to work cooperatively with VIETSOVPETRO or any Replacement
Contractor(s) and to its/their direction and SUBCONTRACTOR‟s management shall
not interfere with VIETSOVPETRO‟s or any Replacement Contractor(s) direction of
VIETSOVPETRO‟s or its Replacement Contractor(s) day-to-day operations.
2.2.8
Emergencies
(a)
In the event of any emergency in relation to the Work endangering life or property,
SUBCONTRACTOR shall take such action as may be reasonable and necessary to prevent,
avoid or mitigate injury, damage or loss. SUBCONTRACTOR shall, as soon as possible and in
any event within twenty (20) hours, report any such incidents, including SUBCONTRACTOR‟s
response thereto, in writing to VIETSOVPETRO.
(b)
In the event of any such emergency, VIETSOVPETRO may, but shall be under no obligation to,
take action itself to prevent, avoid or mitigate injury, damage or loss by causing the requisite
Work to be performed and SUBCONTRACTOR‟s Supply to be furnished. VIETSOVPETRO
shall have such right regardless of whether or not SUBCONTRACTOR has taken reasonable
precautions for the safety of persons or the protection of the Work or of structures or property at
or adjacent to the Site. VIETSOVPETRO may exercise such right with or without notice to
SUBCONTRACTOR if the delay involved in giving SUBCONTRACTOR such notice would
further endanger persons or property. The taking of such action by VIETSOVPETRO, or
VIETSOVPETRO‟s failure to do so, shall not limit or reduce SUBCONTRACTOR‟s liability.
(c)
SUBCONTRACTOR shall promptly reimburse VIETSOVPETRO for the performance of any
such Work or furnishing of any such SUBCONTRACTOR‟s Supply pursuant to Section 2.2.8(b)
in an amount equal to the reasonable and documented costs incurred by VIETSOVPETRO in
such performance of Work or furnishing of SUBCONTRACTOR‟s Supply:
(i)
if SUBCONTRACTOR has failed to take such reasonable and necessary action required
of it hereunder; or
(ii)
to the extent that VIETSOVPETRO‟s intervention has resulted in SUBCONTRACTOR
not incurring expenditures that otherwise would have been SUBCONTRACTOR‟s
responsibility under this Subcontract.
VIETSOVPETRO, at its sole option, may deduct the amount to be reimbursed by
SUBCONTRACTOR from any payment due to SUBCONTRACTOR under this Subcontract
or otherwise.
(d)
Without modifying in any way any provisions of Section 2.15, VIETSOVPETRO shall make
its arrangements for medical evacuation of personnel from offshore Sites available to
SUBCONTRACTOR on the same basis that VIETSOVPETRO makes such arrangements for
its own employees. VIETSOVPETRO shall have no liability to SUBCONTRACTOR Group
in connection with the provision of or failure to make such arrangements available for the
medical evacuation of SUBCONTRACTOR Group Personnel. VIETSOVPETRO shall be
entitled to recover from SUBCONTRACTOR the actual costs incurred by VIETSOVPETRO
in respect of medical evacuation of SUBCONTRACTOR Group Personnel.
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(e)
2.2.9
Draft contract
Application of the foregoing provisions of this Section 2.2.8 is not contingent upon an
agreement of the Parties as to i) the duration of a Weather Downtime occurrence; ii) the
timing or appropriate extent of a response to a Tropical Storm; or iii) the risk to personnel or
property of any Person arising from the presence of or operations by VIETSOVPETRO or
VIETSOVPETRO‟s other contractors, Company or Company‟s other contractors at an
Installation Site, and any failure of SUBCONTRACTOR and VIETSOVPETRO to have
reached such agreements shall not affect this Section 2.2.8.
Employment of Licensed Personnel; Labour Relations; Severance Payment Obligations
(a)
Whenever required by Applicable Law or Good Engineering and Operating Practices,
SUBCONTRACTOR shall employ, and shall ensure that Subcontractors employ as applicable in
respect of subcontracted Work,
(i)
personnel duly licensed by the appropriate Governmental Authority and/ or recognized
professional body, so as to qualify them to perform associated engineering and design, or
other professional services in the performance of the Work;
(ii)
personnel duly licensed and/ or certified by the appropriate Governmental Authority and/
or recognized professional body, so as to qualify them to perform associated
construction planning services, construction execution services, and construction
supervision services.
SUBCONTRACTOR shall ensure, through the proper functioning of its internal control and
quality systems, that no member of SUBCONTRACTOR Group employs in connection with
its performance under this Subcontract any unfit person or any person not skilled in the work
or exercise of responsibilities assigned to such person.
(b)
SUBCONTRACTOR shall employ labour and Subcontractors and Suppliers (whether directly or
indirectly employed) so as to cause no conflict or interference with or between the various trades,
or delay in performance of SUBCONTRACTOR‟s obligations. SUBCONTRACTOR shall be
responsible for all personnel management and labour relations matters relating to the Work and
shall at all times maintain harmony and cause Subcontractors and Suppliers to maintain harmony
among all personnel employed in connection with the Work, and among all unions and other
workers‟ representatives. SUBCONTRACTOR shall adopt and implement, and cause
Subcontractors and Suppliers to adopt and implement, reasonable policies and practices designed
to avoid work stoppages, slowdowns, disputes and strikes.
(c)
SUBCONTRACTOR shall give to VIETSOVPETRO prompt written notice of any labour
dispute or anticipated labour dispute that may be expected to have a material adverse effect on
the performance of the Work or the Subcontract Schedule. Such notice shall include details of
the actions proposed by SUBCONTRACTOR to mitigate such effect. SUBCONTRACTOR, at
its own cost, shall promptly take any measures reasonably required by VIETSOVPETRO to
avoid or mitigate the effects of labour disputes.
(d)
SUBCONTRACTOR shall not take any unlawful action to prevent its employees from lawfully
exercising their right of free association and their right to organize and bargain collectively.
SUBCONTRACTOR shall observe Applicable Laws relating to a minimum age for employment
of children, acceptable conditions of work, minimum wages, hours of work, and occupational
health and safety; and not to use forced labour.
(e)
Without limiting the generality of Section 2.2.9(d), SUBCONTRACTOR further agrees that it:
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(i)
(ii)
(f)
shall perform, or cause Subcontractors and Suppliers to perform, the Work in
conformance with all applicable occupational health and safety standards; and
shall not, in connection with the Work, employ, or permit Subcontractors or Suppliers to
employ, illegal immigrants, and shall not employ, or permit Subcontractors or Suppliers
to employ, workers under 18 years of age for any hazardous activities.
SUBCONTRACTOR shall be responsible and liable for the payment of severance pay for its
employees and of all its other obligations to its employees and Governmental Authorities as
required by Applicable Law. SUBCONTRACTOR shall defend, indemnify and hold harmless
VIETSOVPETRO and Company from and against any and all loss, liability, cost, claims,
damages, demands and expenses (including legal fees and cost) of every kind and character,
arising out of or as a result of SUBCONTRACTOR‟s failure to comply with this provision and/
or the failure of any member of SUBCONTRACTOR Group to fulfill the same obligation for its
employees.
2.2.10 Co-operation and Non-interference with VIETSOVPETRO‟s Other Contractors and Company‟s Other
Contractors
(a)
SUBCONTRACTOR shall be responsible for co-ordinating all project management, associated
engineering, associated construction, installation and other activities in relation to the Work and
the Contract Objects/ Subcontract Objects with VIETSOVPETRO. VIETSOVPETRO shall be
responsible for co-ordinating all project management, associated engineering, associated
construction, installation and other activities in relation to the work under the Contract and the
Contract Objects with those of VIETSOVPETRO‟s other contractors and Company‟s other
contractors carrying out concurrent activities in respect of the SVSW project or Company‟s
offshore operations. SUBCONTRACTOR shall develop and maintain detailed interface matrix
itemizing all interfaces for the Work. Such matrix shall include details and timing of all
information to be provided by SUBCONTRACTOR to other entities, and by other entities to
SUBCONTRACTOR, in relation to the Work.
(b)
During performance of the Work, VIETSOVPETRO and VIETSOVPETRO‟s other contractors
and Company and Company‟s other contractors will be working at and around the Installation
Sites.
Without limiting VIETSOVPETRO‟s obligations under Section 2.4.4,
SUBCONTRACTOR shall co-operate in good faith and use its reasonable efforts to co-ordinate
associated construction, installation, testing, and/ or pre-commissioning of the Contract Objects
and/or Subcontract Objects so as to enable any Person performing:
(i)
(ii)
(c)
the associated construction, installation, testing, pre-commissioning and/ or
commissioning of other items of work in connection with the SVSW project to complete
its work in a timely and efficient manner; and/or
Drilling and related operations to carry out its work in a timely and efficient manner.
Not used.
(d)
SUBCONTRACTOR shall also use all reasonable efforts to avoid any action or inaction that will
or could interfere with such other activities. It may be necessary, if required by
VIETSOVPETRO, to reschedule activities connected with the performance of the Work to
eliminate or minimize interferences or standby time, and SUBCONTRACTOR shall co-operate
fully in this effort and in accordance with SUBCONTRACTOR‟s obligations under Section 2.4,
but without prejudice to Section 2.4.4(b).
2.2.11 Other SUBCONTRACTOR Responsibilities
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(a)
SUBCONTRACTOR acknowledges that the Subcontract documents do not set out every detail
of the Work. SUBCONTRACTOR shall carry out the entire Work, including all necessary
associated design evolution and any part of the Work not expressly detailed in the Subcontract
documents, nor specified in SUBCONTRACTOR‟s proposal for the Work, but necessary for the
proper performance and completion of the Work according to the provisions of this Subcontract
and for the completed Work to fulfill properly all the functions contemplated by the Subcontract.
(b)
SUBCONTRACTOR agrees that it shall be responsible for performing all activities and
providing all services, SUBCONTRACTOR‟s Supply, and other items not specifically described
in this Subcontract if:
(i)
it reasonably may be inferred in accordance with the high standards employed by
leading international contractors in the offshore engineering and construction industry
that the performance of such activities and the providing of such services,
SUBCONTRACTOR‟s Supply, and other items were intended as parts of the Work; or
(ii)
the performance of such activities and the providing of such services,
SUBCONTRACTOR‟s Supply, and other items are necessary or advisable in order for
SUBCONTRACTOR to satisfy its obligations under this Subcontract.
Work undertaken and SUBCONTRACTOR‟s Supply and other items provided pursuant to
this Section 2.2.11 shall be performed as Work and not as Change Work.
(c)
SUBCONTRACTOR agrees that its designated Project Manager shall have the full authority, as
between VIETSOVPETRO and SUBCONTRACTOR, to make any decisions required of
SUBCONTRACTOR in relation to the Work, without referral to or the need to seek further
authority from any other person or group of persons. The authority of SUBCONTRACTOR‟s
Project Manager shall include the full authority to approve any commitments or expenditures by
SUBCONTRACTOR under the Subcontract or any contractual arrangements with
Subcontractors and Suppliers, even if these exceed SUBCONTRACTOR‟s own internal budget
for the corresponding items.
(d)
SUBCONTRACTOR expressly agrees that if its designated Project Manager lacks the full
authority to prioritize or otherwise determine the allocation of SUBCONTRACTOR‟s corporate
resources to the Work, VIETSOVPETRO‟s Project Manager and other members of
VIETSOVPETRO‟s project management team shall have the right of direct and unrestricted
access to SUBCONTRACTOR‟s senior management having such authority. VIETSOVPETRO
shall be entitled to exercise such right whenever it has concerns regarding matters actually or
apparently outside SUBCONTRACTOR‟s Project Manager‟s authority, but shall generally do so
only after consultation with SUBCONTRACTOR‟s Project Manager. SUBCONTRACTOR
undertakes to give satisfactory consideration to any such concerns raised by VIETSOVPETRO.
(e)
In addition to its obligations under Sections 2.2.11 (c) and (d), each constituent member of
SUBCONTRACTOR has appointed a project sponsor from its senior management not involved
in the day-to-day management of the Work, as set out in Attachment 2-1. The project sponsor
shall be the primary point of contact for VIETSOVPETRO‟s senior management not involved in
the day-to-day management of the Subcontract, and will take prompt and effective action in
respect of any concerns of VIETSOVPETRO‟s senior management regarding
SUBCONTRACTOR‟s performance of the Work. There shall be regular periodic meetings
between the project sponsor and VIETSOVPETRO‟s senior management. The agenda for each
such meeting shall include review of the progress of the Work, review of planned activities for
the next period, and identification and implementation of appropriate measures to assure the
successful execution of the Work.
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Draft contract
SUBCONTRACTOR‟s responsibilities include all of its other responsibilities and obligations
provided elsewhere in this Section 2.0 and other parts of this Subcontract.
2.2.12 Compliance with Regulatory Requirements, Applicable Codes and Standards
(a)
SUBCONTRACTOR shall determine all the regulatory requirements affecting the performance
of the Work and the associated design, installation and operation of the Contract Objects and
Subcontract Objects. SUBCONTRACTOR shall prepare the technical documentation related to
the Work to support VIETSOVPETRO‟s enquiries to the applicable Governmental Authorities.
SUBCONTRACTOR shall not make, and shall ensure that other members of
SUBCONTRACTOR Group do not make, any direct contact with Governmental Authorities or
their certification agencies in relation to the Work without first informing VIETSOVPETRO and
obtaining VIETSOVPETRO‟s written approval for such contact. In any contact with
Governmental Authorities or their certification agencies, SUBCONTRACTOR shall not make,
and shall ensure that other members of SUBCONTRACTOR Group do not make, any
representations on behalf of Company or VIETSOVPETRO.
(b)
SUBCONTRACTOR shall co-ordinate with Company‟s Certification Contractor as necessary to
secure regulatory approval of the applicable portions of the Work. Such co-ordination shall
include: providing Company‟s Certification Contractor with all requested data, and inspection
and testing plans (ITPs) for SUBCONTRACTOR‟s Supply, the Contract Objects and/or
Subcontract Objects when applicable; and issuing notifications in good time of any upcoming
hold or witness points that Company‟s Certification Contractor expects to attend pursuant to such
ITPs.
(c)
Any approval, inspection, consent, act or omission of VIETSOVPETRO (other than a failure to
perform the VIETSOVPETRO responsibilities in this Subcontract or an express release given in
writing by VIETSOVPETRO) shall not affect SUBCONTRACTOR‟s responsibility for
performing the Work in accordance with the provisions of this Subcontract, nor
SUBCONTRACTOR‟s responsibility for any defect, deficiency, error, omission, nonconformance or default. Such SUBCONTRACTOR‟s responsibilities include, without
limitation, compliance with Applicable Law, Applicable Codes and Standards, and Good
Engineering and Operating Practices.
(d)
Such SUBCONTRACTOR‟s responsibilities shall not be released or affected by:
(i)
VIETSOVPETRO‟s execution of this Subcontract;
(ii)
any VIETSOVPETRO approval provided for under this Subcontract, including its
approval of any Subcontractor or Supplier;
(iii)
VIETSOVPETRO‟s participation in or failure to participate in any inspection or test; or
(iv)
VIETSOVPETRO‟s acceptance of the Loadout Certificate, the Sailaway Certificates,
any Handover Certificates, the Provisional Acceptance Certificate, or the Final
Acceptance Certificate.
2.2.13 Environmental Compliance
SUBCONTRACTOR shall perform the Work so that the Work shall conform to all environmental
requirements of this Subcontract, Applicable Law, Applicable Codes and Standards, and Good
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Engineering and Operating Practices. SUBCONTRACTOR shall comply with its environmental
management obligations pursuant to Section 2.20.6.
2.2.14 Compliance with Hazardous Operations Review and Quantitative Risk Assessment Requirements
In addition to its own obligations in respect of safety aspects of the design of the Contract Objects and
Subcontract Objects as described in Section 2.20 and Section 4.0 and Section 8.0,
SUBCONTRACTOR shall participate actively in Company‟s and VIETSOVPETRO‟s jointly
performed hazardous operations review and quantitative risk assessment of the design of the Contract
Objects and Subcontract Objects. SUBCONTRACTOR shall implement the conclusions of the
review and assessment into its design of the Contract Objects and Subcontract Objects.
2.2.15 VIETSOVPETRO Supplied Data
SUBCONTRACTOR shall comply with its obligations pursuant to Section 2.27 in respect of
VIETSOVPETRO Supplied Data.
2.2.16 SUBCONTRACTOR‟s Failure to Fulfill Responsibilities
In addition to any specific remedies stipulated in this Section 2.2 or elsewhere in the Subcontract, if
SUBCONTRACTOR fails to any material extent to fulfill any of its responsibilities hereunder despite
VIETSOVPETRO, acting reasonably, having requested such fulfillment in writing and given
SUBCONTRACTOR a reasonable opportunity to correct the failure, but is permitted by
VIETSOVPETRO to continue performance of the Work, VIETSOVPETRO shall be entitled to a
reduction in the Subcontract Price, as reasonably determined by VIETSOVPETRO, commensurate
with any such failure. Alternatively, if VIETSOVPETRO, in the absence of proper performance by
SUBCONTRACTOR that does not invoke termination pursuant to Section 2.18.1, and after written
notice to SUBCONTRACTOR of its intention to do so, performs or has others perform any functions
that are within SUBCONTRACTOR‟s responsibility under this Subcontract, it shall be entitled to
recover from SUBCONTRACTOR its reasonable documented costs incurred in so doing.
It‟s understood that right after SUBCONTRACTOR completes (i) the Milestone No. 03-05 for
Handover of completed Pipelines and Associated Works (as evidenced by VIETSOVPETRO‟s
signature on Pipelines and Associated Works Handover Certificates), (ii) Milestone No. 04-06 for
Handover of completed SVSW Topside and Ancillary items (as evidenced by VIETSOVPETRO‟s
signature on SVSW Topside and Ancillary items Handover Certificates), VIETSOVPETRO‟s Hookup and Commissioning Subcontractor (“HUC Subcontractor”) shall commence their work in Su Tu
Vang South West Project. Notwithstanding any provision herein, in case SUBCONTRACTOR fails to
comply with the Subcontract Schedule which leads to the standby of offshore hookup and
commissioning work of HUC Subcontractor, SUBCONTRACTOR shall grant a full and free access
for a critical team of HUC Subcontractor to enter into the SUBCONTRACTOR‟s Spread for
performing their work.
2.3
VIETSOVPETRO Responsibilities
2.3.1
VIETSOVPETRO has the following responsibilities under this Subcontract:
(a)
to pay obligations, including the Subcontract Price, that are the responsibility of
VIETSOVPETRO in accordance with the terms of this Subcontract;
(b)
to provide the VIETSOVPETRO Supplied Data in accordance with Section 2.27 and Section 8.0;
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(c)
to provide the VIETSOVPETRO Furnished Materials without defect or deficiency in accordance
with Section 7.0 and the schedule and conditions as provided for in the Subcontract;
(d)
to provide the VIETSOVPETRO Contract Object (except for that not to be provided to
SUBCONTRACTOR under the Subcontract) without defect/deficiency in accordance with the
schedule and conditions as provided for in the Subcontract;
(e)
to obtain the consents and permits as described in Attachment 2-12 in a timely manner to allow
SUBCONTRACTOR to complete the Work in accordance with the Subcontract Schedule;
(f)
to give approvals and reasonable assistance required of it pursuant to the Subcontract, without
undue delay;
(g)
to arrange, subject to Section 2.4.4, for reasonable access for SUBCONTRACTOR to the
Installation Site at the times reasonably required by SUBCONTRACTOR in accordance with the
Subcontract Schedule; and
(h)
all other responsibilities and obligations of VIETSOVPETRO provided elsewhere in this
Subcontract.
2.4
Offshore Operations
2.4.1
SUBCONTRACTOR and Subcontractors shall afford representatives of VIETSOVPETRO, Company
and Governmental Authorities access to Sites and SUBCONTRACTOR‟s Spread for the purpose of
conducting safety inspections. The execution of any such inspection shall in no way relieve
SUBCONTRACTOR of any of its obligations under this Subcontract. SUBCONTRACTOR shall
promptly rectify, at its cost, any defects, nonconformances or deficiencies identified in any such
inspection.
With respect to any safety inspection prior to movement of any part of
SUBCONTRACTOR‟s Spread to perform Work at a Fabrication Site or Construction Site, or the
Installation Site, such defects, nonconformances or deficiencies must be rectified prior to such movement.
SUBCONTRACTOR shall not be responsible for the costs of the Persons performing such inspections
(including per diem allowances, travel expenses and professional fees) unless the need for such
inspections arises out of acts or omissions of SUBCONTRACTOR Group, including where re-inspection
is needed because an earlier inspection revealed matters needing correction. SUBCONTRACTOR shall
be responsible for vessel-time and all other SUBCONTRACTOR Group‟s costs in relation to such
inspections.
2.4.2
SUBCONTRACTOR shall arrange for and, except as provided below, also pay for:
(a)
(b)
2.4.3
inspection by Vietnamese Governmental Authorities of SUBCONTRACTOR‟s primary vessels
prior to their entry into Vietnamese territorial waters, as required by Applicable Law; and
security and other clearances and/ or import and export of SUBCONTRACTOR‟s Spread to the
Site.
SUBCONTRACTOR shall ensure that all parts of SUBCONTRACTOR‟s Spread (including, without
limitation, marine vessels, marine plant, cranes, diving facilities, pipe laying equipment, piling
equipment, welding equipment, survey and inspection equipment, positioning equipment, other
installation equipment and installation aids utilized in performance of the Work) are in such good
condition as to permit the most efficient working thereof and with a full and competent complement of
masters, officers, crews and operators. SUBCONTRACTOR shall further ensure that all parts of
SUBCONTRACTOR‟s Spread are in every way fit for service in all weather conditions foreseeable for
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the Site and the industry-recognized offshore working season. SUBCONTRACTOR shall also ensure
there are sufficient spares onboard the vessels.
2.4.4
(a)
Without relieving VIETSOVPETRO of any of its obligations under this Subcontract,
SUBCONTRACTOR shall ensure that every aspect of and all operations connected with the
Work are carried out so as not to damage, or to interfere unnecessarily or improperly with, any of
VIETSOVPETRO Group‟s offshore facilities or VIETSOVPETRO Group operations or
Company Group‟s offshore facilities or Company Group operations. SUBCONTRACTOR shall
provide and properly maintain necessary safeguards for protection of Company Group‟s offshore
facilities and/or VIETSOVPETRO Group‟s offshore facilities in relation to
SUBCONTRACTOR‟s operations.
(b)
Provided that SUBCONTRACTOR has properly planned and scheduled the installation of the
Contract Objects and Subcontract Objects (including having coordinated and planned with
VIETSOVPETRO or VIETSOVPETRO‟s other contractors and support properly
VIETSOVPETRO in coordinating and planning with Company or Company‟s other
contractors to avoid and/ or minimise any delay or disruption) and is working to the Subcontract
Schedule, if SUBCONTRACTOR experiences an unavoidable delay or disruption or incurs
additional cost during offshore installation of any of the Contract Objects and/or Subcontract
Objects because:
(i)
the presence of or operations by VIETSOVPETRO or VIETSOVPETRO‟s other
contractors or Company or Company‟s other contractors demonstrably and materially
hinder(s) or interfere(s) with SUBCONTRACTOR‟s scheduled operations under this
Subcontract; or
(ii)
the Work of VIETSOVPETRO or VIETSOVPETRO‟s other contractors or Company
or Company‟s other contractors is defective or ill-timed and SUBCONTRACTOR
depends upon proper and timely execution thereof in order for SUBCONTRACTOR
to perform the Work in accordance with the Subcontract Schedule,
then SUBCONTRACTOR shall be entitled to a Change Order Authorization, provided further
that SUBCONTRACTOR gave VIETSOVPETRO timely notice of the likely implications for
the Work so that VIETSOVPETRO was able to take alternative steps (whether or not actually
taken) to avoid such delay, interference, or additional cost.
The Change Order Authorization shall set out such adjustment to the Subcontract Price as is
reasonable to compensate SUBCONTRACTOR for the time lost and additional costs incurred;
and/ or such adjustment of the Subcontract Schedule, including extension, if any, to the
Guaranteed Completion Date, appropriate for the delay experience. Provided, however, that there
shall be no adjustment to the Subcontract Schedule to the extent that and for so long as there is
any concurrent delay event due to pre-existing matters within SUBCONTRACTOR‟s risk or
responsibility under the Subcontract. SUBCONTRACTOR shall use its best endeavours to
minimize the effect of any such delay or disruption. SUBCONTRACTOR shall not be entitled
to assert any claim or excuse in respect of any act or omission of any member of
SUBCONTRACTOR Group except only if such act or omission is committed by a member of
SUBCONTRACTOR Group that is otherwise a contractor to VIETSOVPETRO and/ or
Company and, as such, is complying with its contractual obligations.
(c)
SUBCONTRACTOR shall obtain from the appropriate Governmental Authorities the necessary
permit or permits to install the Contract Objects and Subcontract Objects at the offshore location
with the proposed SUBCONTRACTOR‟s Spread and installation procedure, and in accordance
with the Subcontract Schedule. During SUBCONTRACTOR‟s offshore installation Work,
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SUBCONTRACTOR shall co-ordinate and interface with the appropriate Governmental
Authorities regarding the daily offshore operations. Any delays, disruptions, or interferences
caused by Third Parties (other than VIETSOVPETRO‟s other contractors and/ or Company‟s
other contractors, as addressed in this Section 2.4.4) working in the same vicinity, shipping
traffic, fishing activities and other installation complexities shall, subject to Section 2.10, be the
responsibility of SUBCONTRACTOR unless and insofar as expressly provided otherwise in the
Subcontract.
2.4.5
SUBCONTRACTOR shall ensure that all aspects of, and all operations connected with, the Work are
carried out so as not to damage any Third Party Property including, without limitation, submarine
telecommunication cables. SUBCONTRACTOR shall perform the operations in a safe manner and
properly maintain necessary safeguards for protection of such Third Party Property.
2.4.6
(a)
(b)
SUBCONTRACTOR shall expeditiously buoy, light, raise and remove all or any part of the
Project Property or any other plant, material, equipment, item, vessel or craft included in
SUBCONTRACTOR‟s Spread that may be sunk or lost in the course of the performance of the
Work.
SUBCONTRACTOR shall carry out all such operations:
(i)
so as to comply with all Applicable Laws and to avoid any hazard to navigation, any
delay in the completion of the Work, and any hazard or disturbances to Company‟s and
VIETSOVPETRO‟s offshore operations; and
(ii)
at the cost of the Parties as determined in accordance with Section 2.15.8.
(c)
2.4.7
SUBCONTRACTOR shall otherwise deal with such sunk or lost items as VIETSOVPETRO,
acting reasonably, may direct.
(a)
SUBCONTRACTOR shall not, without the prior consent of VIETSOVPETRO, disrupt the
Work for any SUBCONTRACTOR Group vessel to render assistance or perform salvage unless
the master of the vessel is required to render assistance where the safety of persons is at risk, or
by the general maritime law or other relevant code of law. SUBCONTRACTOR shall promptly
notify VIETSOVPETRO in writing of any such salvage or assistance operations, and in any
event within twenty (20) hours.
(b)
In the event of salvage, then all salvage and all proceeds from derelicts shall first be divided
equally between Company and VIETSOVPETRO in accordance with the Contract after
deducting the master‟s, officers‟ and crew‟s share, hire of vessel for time lost at the time-based
unit rates set out in this subcontract, and other reasonable expenses incurred.
SUBCONTRACTOR shall be entitled to 50% of VIETSOVPETRO‟s share of such salvage and
proceeds. Subject as aforesaid, reasonable expenses (excluding any damage to or loss of the
vessel or other SUBCONTRACTOR Group property) incurred in saving or attempting to save
life and in unsuccessful attempts to salvage shall be borne equally by Company and
VIETSOVPETRO and SUBCONTRACTOR shall be liable for 50% of VIETSOVPETRO‟s
portion of such reasonable expenses. Provided, however, that Company and VIETSOVPETRO
shall not be liable to contribute towards any salvage payable by SUBCONTRACTOR or any
member of SUBCONTRACTOR Group arising in any way out of services rendered under this
Section 2.4.7. Reasonable expenses incurred in unsuccessful salvage attempts, and reasonable
expenses exceeding actually realized salvage and proceeds from derelicts, shall be borne equally
by Company and VIETSOVPETRO and SUBCONTRACTOR shall be liable for 50% of
VIETSOVPETRO‟s portion of such reasonable expenses.
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Draft contract
SUBCONTRACTOR shall be entitled, by means of a Change Order Authorization, to
adjustment of the Subcontract Schedule, including extension, if any, to the Guaranteed
Completion Date, if and to the extent such adjustment is required as a result of time lost by
salvage performed by SUBCONTRACTOR under this Section 2.4.7. Provided, however, that
there shall be no adjustment to the Subcontract Schedule to the extent that and for so long as
there is any concurrent delay event due to pre-existing matters within SUBCONTRACTOR‟s
risk or responsibility under the Subcontract. SUBCONTRACTOR shall use its best endeavours
to minimize the effect of any such delay or disruption.
2.4.8
SUBCONTRACTOR shall waive all salvage rights, where such rights could otherwise be exercised,
should it be called upon to recover any of Company‟s or Company‟s other contractors‟ property or
VIETSOVPETRO‟s or VIETSOVPETRO‟s other contractors‟ property. VIETSOVPETRO shall use all
reasonable endeavours to get VIETSOVPETRO‟s other contractors and Company‟s other contractors
similarly to waive salvage rights in respect of SUBCONTRACTOR Group Property.
2.4.9
SUBCONTRACTOR shall not, unless it has first obtained VIETSOVPETRO‟s written approval, which
shall not be unreasonably withheld, demobilize, remove from the Work, or substitute any marine vessel
used by SUBCONTRACTOR Group in the performance of the Work.
2.5
Title
2.5.1
(a)
SUBCONTRACTOR warrants that it has, and undertakes that it will at all times maintain, good
title, free and clear of all liens, charges and other encumbrances, to all materials, equipment, tools
and supplies furnished by SUBCONTRACTOR or Subcontractors or Suppliers that are or are
intended to become part of the SUBCONTRACTOR‟s Supply or the Contract Objects and/or
Subcontract Objects or that are or are intended to be used by Company and/or VIETSOVPETRO
in the maintenance thereof, and in all drawings, documents and associated engineering and other
data prepared or furnished by SUBCONTRACTOR or Subcontractors or Suppliers in performing
the Work.
(b)
Full title to said materials, equipment, tools, supplies, and (subject to Section 2.16.3) to drawings,
documents and associated engineering and other data, shall pass to VIETSOVPETRO and/or
Company progressively as the Work is performed, at the earliest of:
(i)
the date said materials, equipment, tools, and supplies are identified to or appropriated
for the Work or this Subcontract;
(ii)
the date said drawings, documents and associated engineering and other data are
prepared, or furnished for the Work;
(iii)
the date the said materials, equipment, tools and supplies are delivered:
(A)
(B)
as to such items sourced from within the Republic of Vietnam, to the
Construction Site or to the Installation Site, as applicable; or
(C)
(iv)
as to such items sourced from outside the Republic of Vietnam, to the point
of import into the Republic of Vietnam;
to such point of delivery as otherwise identified in this Subcontract;
the date payment for said materials, equipment, tools, supplies, drawings, documents and
associated engineering and other data is made by VIETSOVPETRO to
SUBCONTRACTOR;
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(v)
the date of Handover (if applicable) or Provisional Acceptance; or
(vi)
upon termination of this Subcontract.
Provided, however, that VIETSOVPETRO, shall have the right, but not the obligation, to take
over from SUBCONTRACTOR all or any part of any surplus items of SUBCONTRACTOR‟s
Supply procured for the Work but not actually used. Except as VIETSOVPETRO may elect, by
written notice to SUBCONTRACTOR, to take over any such surplus items,
SUBCONTRACTOR shall be responsible for disposing of surplus items. The effect upon the
Subcontract Price, if any, of either or any combination of the preceding cases shall be determined
in accordance with the provisions of Section 10.0 – Changes and Section 5.0 – Compensation.
(c)
The passing of title to VIETSOVPETRO and/or Company shall in no way affect
SUBCONTRACTOR‟s obligations as set forth in other provisions of this Subcontract, including
those in Section 2.2.5 relating to the importation of SUBCONTRACTOR‟s Supply.
(d)
Transfer of title shall in no way affect VIETSOVPETRO‟s rights (including those to reject or
require correction of nonconforming items, or to require correction of defective items) nor
VIETSOVPETRO‟s obligation to pay all sums due to SUBCONTRACTOR for items to which
VIETSOVPETRO and or Company asserts title before VIETSOVPETRO has made payment to
SUBCONTRACTOR for such items, as set forth in other provisions of this Subcontract.
Notwithstanding the foregoing, for the purposes of Sections 2.5.1(b), 2.13 and 2.15.6, unless
VIETSOVPETRO, at its sole discretion on a case-by-case basis, decides otherwise, the following
items shall be considered as SUBCONTRACTOR Group Property and shall not be considered to
be SUBCONTRACTOR‟s Supply:
(i)
(ii)
(e)
defective or nonconforming items that have been removed in order for them to be
replaced with alternative items pursuant to Section 2.13, after such replacement has been
completed; and
items procured for the Work but not used in the Work nor taken over by
VIETSOVPETRO pursuant to Section 2.5.1(b).
SUBCONTRACTOR shall be responsible for the care, custody and control of said materials,
equipment, tools, supplies and exercise due care thereof to protect them from loss or damage
until SUBCONTRACTOR has satisfactorily delivered them into VIETSOVPETRO‟s custody on
Handover or Provisional Acceptance or upon termination of this Subcontract, whichever first
occurs. With regard to spares, SUBCONTRACTOR shall use due care to protect them from loss
or damage, including carrying out preservation or maintenance prescribed by Suppliers, until
satisfactory delivery of such spares to VIETSOVPETRO.
2.5.2
Title in all material, equipment, documentation or other property issued by VIETSOVPETRO to
SUBCONTRACTOR shall at all times be and remain vested in VIETSOVPETRO and/or Company.
2.5.3
(a)
Pursuant to Section 2.5.1(b), but subject to Section 2.16.3, all drawings, documents, associated
engineering, computer programs, disks and/ or tapes and other data prepared or furnished by
SUBCONTRACTOR or Subcontractors or Suppliers in performing the Work shall become the
property of VIETSOVPETRO and/or Company at the time of preparation and may be used by
VIETSOVPETRO and/or Company for any purpose whatsoever. Provided, however, that in the
case of computer programs and any data derived from these and any other items that are the
subject of pre-existing ownership rights, SUBCONTRACTOR may instead provide
VIETSOVPETRO and/or Company, at no extra charge to VIETSOVPETRO or Company, with
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an irrevocable, royalty-free, assignable licence acceptable to VIETSOVPETRO allowing
Company‟s unrestricted use and quiet enjoyment of such items in relation to operation,
maintenance, repair, modification and use of the Contract Objects and/or Subcontract Objects,
and sale of the products thereof.
(b)
SUBCONTRACTOR shall ensure that VIETSOVPETRO and/or Company has full rights to use,
independently and at no extra charge, any software and any other items in relation to
SUBCONTRACTOR‟s Supply that may be subject to a Supplier‟s licence agreement or similar
contractual arrangement. SUBCONTRACTOR shall ensure that any licence and similar terms
applicable to VIETSOVPETRO‟s and/or Company‟s use of the Contract Objects and/or
Subcontract Objects are acceptable to VIETSOVPETRO before SUBCONTRACTOR enters
into any agreement containing or pertaining to such terms.
(c)
SUBCONTRACTOR shall obtain for Company‟s benefit, at no extra charge, all software
licences and the like that Company may need in relation to the use and quiet enjoyment of any
items that SUBCONTRACTOR is to provide to VIETSOVPETRO pursuant to this Subcontract.
2.5.4
SUBCONTRACTOR shall protect VIETSOVPETRO and/or Company interest in all materials,
equipment, tools, supplies, drawings, documents and associated engineering and other data with respect
to which title has passed to VIETSOVPETRO and/or Company but which remain in the possession of
SUBCONTRACTOR Group, or which have been issued by VIETSOVPETRO to SUBCONTRACTOR
Group for use in the performance of the Work. For such purpose, SUBCONTRACTOR shall take or
cause to be taken all actions necessary under the laws of the appropriate jurisdiction(s) to protect
VIETSOVPETRO‟s and/or Company‟s title, and shall defend, indemnify and hold harmless
VIETSOVPETRO and Company against claims by other entities with respect thereto where such claims
involve or relate to SUBCONTRACTOR Group, or result from or arise out of any act or omission by
SUBCONTRACTOR Group.
Provided, however, that VIETSOVPETRO shall reimburse
SUBCONTRACTOR for the substantiated reasonable actual costs of actions not already specified herein
as SUBCONTRACTOR‟s responsibility that VIETSOVPETRO requires SUBCONTRACTOR to take to
protect VIETSOVPETRO and/or Company title before VIETSOVPETRO has made full payment for the
items concerned in accordance with the Subcontract.
2.5.5
Any portion of the Work for which title has passed to VIETSOVPETRO and/or Company but which
remains in the care and custody of SUBCONTRACTOR Group, together with material or equipment or
other property issued by VIETSOVPETRO to SUBCONTRACTOR Group, shall be clearly identified by
SUBCONTRACTOR Group (by physical marking or labelling, wherever practicable) as being the
property of VIETSOVPETRO and/or Company and shall be segregated or otherwise clearly
distinguishable from SUBCONTRACTOR Group Property.
2.5.6
SUBCONTRACTOR shall cause all conditions of this Section 2.5 to be inserted mutatis mutandis in all
contracts with Subcontractors and Suppliers so that Company and VIETSOVPETRO and
SUBCONTRACTOR shall have the rights set forth herein with respect to each Subcontractor and
Supplier.
2.6
Guaranteed Completion Date
SUBCONTRACTOR guarantees that Provisional Acceptance for the Work shall occur not later than the
date set out in Section 9.1 for such Milestone (as such date may be adjusted by a Change Order
Authorization as specifically provided in this Subcontract), the “Guaranteed Completion Date”.
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2.7
Subcontract Schedule Compliance
2.7.1
(a)
SUBCONTRACTOR shall perform the Work expeditiously, continuously and diligently using
adequate, qualified and competent personnel together with adequate and efficient project
management, associated engineering, onshore fabrication and offshore installation facilities and
resources; and shall perform and complete the Work in accordance with the Subcontract
Schedule.
(b)
SUBCONTRACTOR shall continuously monitor the progress of the Work so as to know at all
times the planned and actual progress. SUBCONTRACTOR shall promptly provide such
information as VIETSOVPETRO may require for monitoring and verifying the progress of the
Work.
(c)
In the event that SUBCONTRACTOR‟s actual progress approaches a behind-schedule
condition, SUBCONTRACTOR shall immediately advise VIETSOVPETRO and thereafter
meet with VIETSOVPETRO to discuss causes for the adverse trend and any deficiencies in
progress, and proposed corrective measures. SUBCONTRACTOR shall implement in good
time all agreed corrective measures. Costs associated with implementing such measures shall
be borne by the Party or Parties who caused and/or contributed to cause the delay. In the event
where VIETSOVPETRO has liability, the associated costs shall be calculated using the
applicable Unit Rates in Section 5.0.
(d)
SUBCONTRACTOR shall not give priority to work for its other clients to the detriment of the
Work.
(a)
If SUBCONTRACTOR fails to perform and complete the Work in accordance with the
Subcontract Schedule, including failing, or appearing to be failing, to accomplish a Milestone on
or before the date for the completion of such Milestone as set forth in Section 9.1,
VIETSOVPETRO may deliver to SUBCONTRACTOR a notice of schedule delay (the “Notice
of Schedule Delay”). Within 5 (Five) days after it has received such a Notice of Schedule Delay,
SUBCONTRACTOR shall deliver to VIETSOVPETRO a schedule recovery plan (the
“Schedule Recovery Plan”).
(b)
Such Schedule Recovery Plan shall set forth in detail how SUBCONTRACTOR intends to
increase the rate of performance of the Work to recover to the Subcontract Schedule as soon as
practicable. SUBCONTRACTOR shall base the proposed Schedule Recovery Plan on
SUBCONTRACTOR taking whatever measures are necessary to recover to the Subcontract
Schedule, such as, but not limited to, rescheduling of the Work; increasing labour and
supervisory levels; expediting the Work; utilizing more productive marine vessels, plant or
construction equipment; introducing or increasing overtime; increasing shift work; and
mobilizing additional marine vessels, plant and construction equipment.
(c)
SUBCONTRACTOR shall revise its proposed measures and the Schedule Recovery Plan as
reasonably required by VIETSOVPETRO to assure recovery to the Subcontract Schedule is
accomplished as soon as practicable. VIETSOVPETRO shall not unreasonably withhold
approval of SUBCONTRACTOR‟s proposed Schedule Recovery Plan.
Upon
VIETSOVPETRO‟s approval of the Schedule Recovery Plan, SUBCONTRACTOR shall
immediately commence diligent implementation of the measures set out therein.
(d)
Without prejudice to Section 2.10, Section 10.2, or Section 10.3, a Schedule Recovery Plan shall
not constitute or be grounds for a change to the Subcontract Schedule.
2.7.2
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Draft contract
(a)
If SUBCONTRACTOR fails, or has reason to believe that it is likely to fail, to recover to the
Subcontract Schedule in accordance with the latest VIETSOVPETRO-approved Schedule
Recovery Plan, SUBCONTRACTOR shall promptly give notice thereof to VIETSOVPETRO.
If VIETSOVPETRO so requires, SUBCONTRACTOR shall promptly deliver to
VIETSOVPETRO a further Schedule Recovery Plan complying with the requirements and in
accordance with the procedures set forth in Section 2.7.2.
(b)
SUBCONTRACTOR shall deliver written reports to VIETSOVPETRO each week, or more
frequently if required by VIETSOVPETRO, detailing SUBCONTRACTOR‟s progress under
any Schedule Recovery Plan.
(c)
None of the foregoing shall limit SUBCONTRACTOR‟s obligation, as set forth in Section 2.7.2,
to expedite the performance of the Work by taking such measures as are necessary to recover to
the Subcontract Schedule as soon as practicable.
2.7.4
SUBCONTRACTOR shall bear the costs of implementing the Schedule Recovery Plan except and to the
extent the need for such plan is attributable to VIETSOVPETRO‟s breach of its obligations under Section
2.3, suspension pursuant to Section 2.8.1, or recovery from the effects of a Force Majeure or a Change, in
each case pursuant to a duly authorized Change Order Authorization. In the event of disagreement as to
whether or not SUBCONTRACTOR is entitled to a Change Order Authorization, SUBCONTRACTOR
shall promptly and assiduously implement any written instructions given by VIETSOVPETRO pending
resolution of the matter.
2.7.5
Neither SUBCONTRACTOR‟s obligations nor VIETSOVPETRO‟s rights and remedies under this
Section 2.7 and Section 2.18 are diminished or prejudiced in any way by the Delay Liquidated Damages
provisions of Section 2.9.
2.8
Suspension
2.8.1
(a)
Notwithstanding any other provisions of the Subcontract, VIETSOVPETRO at any time and
from time to time may suspend without cause all or part of the Work for a reasonable period of
time by giving SUBCONTRACTOR written notice specifying the part of the Work to be
suspended and the effective date of the suspension. SUBCONTRACTOR shall suspend its
activities accordingly, but shall continue to perform all unsuspended parts of the Work. Unless
otherwise instructed by VIETSOVPETRO, SUBCONTRACTOR shall during any such
suspension maintain its staff and labour on or near the Site and otherwise ready to proceed with
the Work upon receipt of VIETSOVPETRO‟s further instructions. Appropriate adjustments to
the Guaranteed Completion Date and/ or the Subcontract Price shall be made by means of a
Change Order Authorization. Regarding adjustment to the Subcontract Price, VIETSOVPETRO
shall compensate SUBCONTRACTOR at the applicable rates specified in Section 5.0 (or, in the
case of a partial suspension of SUBCONTRACTOR‟s Spread, an amount equal to such portion
that has been suspended) for:
(i)
standby of SUBCONTRACTOR Group‟s employees, SUBCONTRACTOR‟s Spread
and/ or SUBCONTRACTOR Group‟s construction tools, plant and equipment during
the period of suspension if and to the extent such items cannot be properly utilized by
SUBCONTRACTOR Group in performance of the Work hereunder or other work for
other persons as agreed by VIETSOVPETRO;
(ii)
demobilizing and remobilizing SUBCONTRACTOR Group‟s employees,
SUBCONTRACTOR‟s Spread, and/ or SUBCONTRACTOR Group‟s construction
tools, plant and equipment, if such demobilization and remobilization are authorized in
advance in writing by VIETSOVPETRO; and
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(iii)
2.8.2
After having given a suspension notice as provided above, VIETSOVPETRO shall have
the right to direct SUBCONTRACTOR to resume its activities on all or some of the
suspended Work. Provided, however, that if VIETSOVPETRO suspends operations by
SUBCONTRACTOR‟s Spread so as to prevent SUBCONTRACTOR completing such
operations before the end of the industry-recognized offshore working season,
SUBCONTRACTOR, acting reasonably, shall not be obliged to resume performance of
such operations before the start of the next offshore working season. In such event,
SUBCONTRACTOR shall cooperate in minimizing the total costs to be borne by
VIETSOVPETRO, which shall include applicable demobilization and remobilization
charges pursuant to Section 2.8.1(a). For the purpose of Section 2.8, “industryrecognized offshore working season” and “offshore working season” means the period
from 1 April to 31st October inclusive.
If SUBCONTRACTOR has been demobilized and instructed by VIETSOVPETRO not
to retain SUBCONTRACTOR Group‟s employees, SUBCONTRACTOR‟s Spread and/
or SUBCONTRACTOR Group‟s construction tools, plant and equipment during the
period of suspension, VIETSOVPETRO shall give reasonable prior notice of
remobilization to SUBCONTRACTOR and SUBCONTRACTOR shall exert all
reasonable efforts to meet VIETSOVPETRO‟s desired remobilization date.
(iii)
(c)
(i)
(ii)
(b)
other items directly related to the suspended part of the Work, such as protecting and
securing any materials and equipment intended for incorporation into the suspended
Work.
If any such suspension by VIETSOVPETRO exceeds, or may reasonably be expected to
exceed, thirty five (35) Days in the aggregate, SUBCONTRACTOR shall be entitled,
after obtaining VIETSOVPETRO‟s consent (such consent not to be unreasonably
withheld), to demobilize all or part of SUBCONTRACTOR‟s Spread in order to meet
SUBCONTRACTOR‟s other contractual obligations. SUBCONTRACTOR, when
seeking such consent, shall submit to VIETSOVPETRO a plan for remobilization which
shall include an estimate of the time period required for SUBCONTRACTOR‟s
remobilization taking into account such other contractual obligations and such other
information as VIETSOVPETRO shall reasonably request to fully evaluate such request.
SUBCONTRACTOR shall keep full and detailed records of all costs of demobilization,
maintenance, and standby, and of other costs in respect of extended suspensions pursuant to this
Section 2.8.1, for any of which it believes it is entitled to receive compensation. Such records
shall be open to inspection by VIETSOVPETRO at all reasonable times. SUBCONTRACTOR
shall provide such regular reports to VIETSOVPETRO as VIETSOVPETRO may reasonably
request, which shall show cumulative costs to date and forecast costs for the entire estimated
suspension period. SUBCONTRACTOR shall invoice VIETSOVPETRO on a monthly basis for
such costs incurred, and provide reasonable documentary proof to establish the basis for
SUBCONTRACTOR‟s calculations.
VIETSOVPETRO shall have the right to suspend any portion of the Work for which
SUBCONTRACTOR is in default pursuant to Section 2.18, or in violation of the safety regulations
described in Section 2.20. Such suspension shall be by written notice to SUBCONTRACTOR and shall
apply only to the portion of the Work cited therein. No adjustment to the Guaranteed Completion Date or
the Subcontract Price shall be made as a result of such suspension and VIETSOVPETRO may suspend
payments to SUBCONTRACTOR for any part of such suspended Work that was performed prior to said
suspension. After having given a suspension notice as provided above, VIETSOVPETRO shall have the
right to direct SUBCONTRACTOR to resume its activities on all or some of the suspended Work.
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Draft contract
(a)
VIETSOVPETRO shall pay the Subcontract Price to SUBCONTRACTOR in accordance with
Section 5.0, provided that VIETSOVPETRO shall be entitled to withhold payment of any
disputed amount, or where VIETSOVPETRO is pursuing in good faith any claim or the like
against SUBCONTRACTOR in relation to the Subcontract, an amount commensurate with such
claim. Any payment falling due on a Day that is not a Business Day for either
VIETSOVPETRO‟s bank or SUBCONTRACTOR‟s bank shall be made on the next following
Business Day. SUBCONTRACTOR shall be entitled to interest at the non-compounded rate of
the three-month LIBOR for US Dollars plus 2% (200 basic points) per annum for the period of
delay on undisputed amounts not paid at the due time in accordance with the Subcontract. Any
interest to which SUBCONTRACTOR is entitled shall be calculated and claimed by
SUBCONTRACTOR at the time of SUBCONTRACTOR‟s final invoice. Such calculation shall
also take account of any amounts paid by VIETSOVPETRO earlier than the due date, using
solely for this purpose, and without creating a liability for SUBCONTRACTOR, a negative
interest rate of the three-month LIBOR for US Dollars plus 2% (200 basic points) applied to the
period by which the payment was made early. SUBCONTRACTOR shall provide with each
invoice submitted to VIETSOVPETRO a summary of payments to date, showing any cumulative
interest to which SUBCONTRACTOR considers it is entitled.
(b)
Without prejudice to Section 2.8.3(a), if VIETSOVPETRO‟s payment of any undisputed amount
is more than twenty (20) Days past due, SUBCONTRACTOR may notify VIETSOVPETRO of
its intention to suspend the performance of any or all of its obligations under the Subcontract.
Provided, however, that such 20-Day period shall not be deemed to have commenced until
VIETSOVPETRO has received from SUBCONTRACTOR all credit notes requested by
VIETSOVPETRO in respect of disputed amounts.
After receipt of said notice,
VIETSOVPETRO shall have fifteen (15) Days to make payment to SUBCONTRACTOR (the
“Cure Period”). SUBCONTRACTOR shall continue performing its obligations during the Cure
Period. If SUBCONTRACTOR does not receive payment by the end of said Cure Period, and
provided that it has duly continued performance of its obligations during the Cure Period,
thereafter and until it receives payment SUBCONTRACTOR may suspend all or any portion of
its obligations under the Subcontract by written notice to VIETSOVPETRO. Appropriate
adjustments to the Guaranteed Completion Date and/ or the Subcontract Price, which will take
into consideration additional costs incurred by SUBCONTRACTOR due to late payment of
undisputed amounts and any consequent suspension as contemplated by this Section 2.8.3(b),
shall be made by means of a Change Order Authorization.
2.8.4
SUBCONTRACTOR shall, during the suspension of the Work, properly preserve, protect and secure the
Work, including any Contract Objects and/or Subcontract Objects, as applicable, and
SUBCONTRACTOR‟s Supply and VIETSOVPETRO Furnished Material in SUBCONTRACTOR
Group‟s custody.
2.9
Damages for Delay
2.9.1
The Parties expressly agree that:
(a)
(b)
2.9.2
Delay Liquidated Damages amounts stipulated in Attachment 2-1 are appropriate; and
SUBCONTRACTOR shall pay any Delay Liquidated Damages becoming due pursuant to this
Section 2.9.
If SUBCONTRACTOR fails to achieve a Milestone designated in Attachment 2-1 as being subject to
liquidated damages by the date for such Milestone, as set out in Attachment 2-1, as any such date may be
adjusted by any Change Order Authorization, SUBCONTRACTOR shall pay to VIETSOVPETRO as
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liquidated damages (“Delay Liquidated Damages”) the applicable sum stipulated in Attachment 2-1 for
each day (or part day) of delay, unless and to the extent that such delay is due to Force Majeure or other
circumstances that are valid grounds for excusable delay by SUBCONTRACTOR under the Subcontract,
until the key Milestone is achieved.
2.9.3
Delay Liquidated Damages shall not exceed, in the aggregate, the maximum amount set out in
Attachment 2-1, such amount being equivalent to ten percent (10%) of the Subcontract Price.
2.9.4
In the event VIETSOVPETRO terminates the Subcontract pursuant to Section 2.18.1, the Extra Costs
payable by SUBCONTRACTOR shall include a sum equivalent to the maximum amount of Delay
Liquidated Damages specified in Section 2.9.3. Provided, however, that VIETSOVPETRO shall refund
any excess Delay Liquidated Damages if and to the extent that, after termination of the Subcontract,
VIETSOVPETRO and/ or any Replacement Contractor subsequently complete(s) the Work by a date
which, if it had been achieved by SUBCONTRACTOR under the Subcontract, would have resulted in
less than the maximum amount of Delay Liquidated Damages being payable by SUBCONTRACTOR.
2.9.5
Any Delay Liquidated Damages shall be due and payable within thirty (30) Days of
SUBCONTRACTOR‟s receipt of VIETSOVPETRO‟s invoice therefor. VIETSOVPETRO may submit
monthly invoices for interim amounts. VIETSOVPETRO shall have the right to offset, in whole or in
part, Delay Liquidated Damages amounts invoiced to SUBCONTRACTOR, up to the maximum amount
specified in Section 2.9.3, from any payments due to SUBCONTRACTOR.
2.9.6
Without prejudice to VIETSOVPETRO‟s right to terminate the Subcontract and recover Extra Costs
pursuant to Section 2.18.5, to the extent that Delay Liquidated Damages are duly enforceable by
VIETSOVPETRO in respect of delay that does not give rise to termination of the Subcontract, they shall
be VIETSOVPETRO‟s sole remedy for the delay to which they relate, notwithstanding references to
time is of the essence or other delay provisions elsewhere in the Subcontract.
2.9.7
The provisions of this Section 2.9 are without prejudice to, and shall not be construed to limit,
VIETSOVPETRO‟s rights and remedies under the Subcontract or damages or any claim or cause of
action based on breaches other than failure to achieve at the due time the Guaranteed Completion Date set
out in Attachment 2-1.
2.10
Force Majeure
2.10.1 (a)
The expression “Force Majeure” means any event or circumstance that is not reasonably
foreseeable or, if reasonably foreseeable, is beyond the control and without the fault or
negligence of the Party claiming Force Majeure (acting and having acted as a Reasonable and
Prudent Person) and, in either case, that would make impossible (the term “impossible” in this
context and for these purposes includes impracticability because of extreme and highly
unreasonable difficulty, expense, injury or loss involved) the performance of all or some of its
obligations hereunder, which failure in performance could not have been prevented or overcome
by the exercise by it of the standard of a Reasonable and Prudent Person.
(b)
Subject to the conditions of, and without prejudice to the generality of, Section 2.10.1(a), “any
event or circumstance” referred to therein includes:
(i)
strikes, lockouts, labour or other industrial disturbances (including sabotage), except as
provided in Section 2.10.4(i);
(ii)
acts of God, or operation of the forces of nature that is unforeseeable;
(iii)
epidemics and quarantine restrictions;
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(iv)
landslides, earthquakes, fires, washouts, floods, and explosions;
(v)
acts of Governmental Authority, acts of war or the public enemy, including blockades,
insurrections, revolution, terrorism, piracy, riots, civil disturbances, arrests and restraints
of rulers and peoples, or conditions arising out of or attributable to war (declared or
undeclared);
(vi)
failure in performance by a Subcontractor or Supplier resulting from such Subcontractor
or Supplier itself being affected by Force Majeure;
(vii)
failure in performance by a VIETSOVPETRO subcontractor or supplier resulting from
such subcontractor or supplier itself being affected by Force Majeure; and
(viii)
failure in performance by Company resulting from the Company itself being affected by
Force Majeure.
2.10.2 Subject to the provisions of this Section 2.10, neither Party shall be liable to the other for any failure to
fulfill any obligation under this Subcontract to the extent it is prevented from or delayed in performing
such obligation by Force Majeure. (For the purposes of this Section 2.10 the words “inability” and
“unable” shall be construed to mean prevented or delayed.).
2.10.3 A Party‟s inability or failure to pay money when due hereunder shall not be treated as Force Majeure.
2.10.4 Notwithstanding anything in Sections 2.10.1 and 2.10.2, the following events or circumstances giving rise
to a Party‟s or any Subcontractor‟s or Supplier‟s inability or failure to perform shall not be treated or
construed as Force Majeure:
(a)
if the inability was primarily caused by lack of finances of the Person claiming the occurrence of
Force Majeure; or by the bankruptcy, insolvency or the like of any Subcontractor or Supplier, or
of any of VIETSOVPETRO‟s other contractors and Company‟s other contractors;
(b)
if the failure was primarily caused by the entity‟s inability to make any payment in US Dollars or
other applicable currency;
(c)
if the inability was primarily caused by general economic or market conditions including without
limitation recession, depression, inflation, deflation, exchange rate fluctuations, availability of
foreign exchange funds or changes in prices or any other event that merely makes performance
uneconomic or commercially impracticable;
(d)
the late delivery of SUBCONTRACTOR‟s Supply or SUBCONTRACTOR‟s Spread for any
reason that is not otherwise Force Majeure;
(e)
the late performance by any entity caused by such entity‟s failure to engage qualified
Subcontractors and/ or Suppliers who have sufficient capacity or to hire an adequate number of
personnel or labour;
(f)
delays resulting from inadequacy of SUBCONTRACTOR‟s Spread or achieving less than
planned productivity or experiencing harder or softer than expected ground, seabed or soil
conditions during piling or similar operations;
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(g)
delays resulting from adverse weather conditions (other than in respect of operation of the forces
of nature that is unforeseeable pursuant to Section 2.10.1(b)) or unfavourable ground, seabed,
soil, current, tidal or sea conditions, seabed obstructions, or other similar adverse conditions;
(h)
delays resulting from the presence at any Site of other contractors or Third Parties;
(i)
strikes or lockouts, labour or other industrial disturbances (including sabotage) involving a
Party‟s and/ or Subcontractor‟s and/ or Supplier‟s own employees, except for regional, national
or industry-wide strikes, labour or other industrial disturbances not attributable to such Party and/
or Subcontractor and/ or Supplier;
(j)
delays in obtaining approval for importation of SUBCONTRACTOR‟s Supply, Subcontract
Objects and/ or SUBCONTRACTOR‟s Spread, unless the Person affected has been a
Reasonable and Prudent Person in applying for such approval;
(k)
the withdrawal or expiration of, or failure to obtain, unless the Person affected has acted as a
Reasonable and Prudent Person, any necessary consent, confirmation, authorization or other
approval of any Governmental Authority which the entity, acting as a Reasonable and Prudent
Person, can apply for and obtain, maintain or extend or could have applied for and obtained,
maintained or extended;
(l)
any event or circumstance comprising, or resulting from, any Willful Misconduct by
SUBCONTRACTOR Group, in the case of Force Majeure relief claimed by
SUBCONTRACTOR, or by VIETSOVPETRO Group, in the case of Force Majeure relief
claimed by VIETSOVPETRO, (in either case, in the performance of this Subcontract or
otherwise);
(m)
the imposition of sanctions by any legitimate Governmental Authority due primarily to the
failure of SUBCONTRACTOR Group, in the case of Force Majeure relief claimed by
SUBCONTRACTOR, or of VIETSOVPETRO Group, in the case of Force Majeure relief
claimed by VIETSOVPETRO, to comply with any Applicable Law; or
(n)
any occurrence that a Party claims as Force Majeure unless that Party shall have complied with
the notice requirements set forth in Section 2.10.5.
2.10.5 A Party (the “Affected Party”) intending to seek relief under this Section 2.10 shall give notice (the
“Force Majeure Estimate”) to the other Party (the “Non-Affected Party”) at each of the following times:
(a)
as soon as practicable but in any event within ten (10) days of the day (the “Relevant Day”) upon
which the Party first knew or ought reasonably to have known of the inability to fulfill an
obligation for which relief is sought hereunder;
(b)
at the end of each subsequent period of seven (7) days;
(c)
as soon as reasonably practicable whenever the Affected Party‟s bona fide estimate of the
duration of the event or circumstance of Force Majeure changes; and
(d)
as soon as reasonably practicable when the Affected Party anticipates that it will be able to
resume performance of its obligations under this Subcontract.
2.10.6 The initial Force Majeure Estimate given under Section 2.10.5 shall contain the following information
relating to the event or circumstances of Force Majeure:
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(a)
particulars of the occurrence; and
(b)
the Affected Party‟s bona fide estimate of its expected duration from the Relevant Day, the date
that full performance will be resumed, and the expected extent of the Affected Party‟s inability to
perform;
and to the extent known or then reasonably ascertainable:
(c)
the reasons for the occurrence;
(d)
the actions which the Affected Party, acting as a Reasonable and Prudent Person, would take to
remedy the Force Majeure event or circumstance and its bona fide estimate of the expected
schedule thereof; and
(e)
the Affected Party‟s bona fide estimate of the date or dates of any incremental (less than full)
increase or resumption of performance.
Each subsequent Force Majeure Estimate shall contain any of the above information not previously
notified, a full report confirming or updating and amplifying the information contained in previous
Force Majeure Estimates, and such further information as the Non-Affected Party may reasonably
require.
2.10.7 Upon request, an Affected Party shall, as soon as practicable, give or procure access, insofar as it is
reasonably able to do so, for a reasonable number of representatives of the Non-Affected Party to
examine, at the Non-Affected Party‟s sole risk and cost, the scene of the event or circumstance which
gave rise to the inability to perform.
2.10.8 When the Affected Party gives notice that it anticipates that it will be able to resume performance of its
obligations under this Subcontract, the Parties shall co-operate to accomplish any necessary activities
during such notice period to enable resumption of full performance.
2.10.9 If an event or circumstance of Force Majeure occurs, each Affected Party shall as soon as reasonably
practicable take all necessary steps as may be reasonably practicable in accordance with the standard of a
Reasonable and Prudent Person to remedy the inability to perform and resume full and proper
performance hereunder. Relief under this Section 2.10 shall cease to be available to a Party from the time
when such Party ought to have commenced taking such steps.
2.10.10 (a)
If any occurrence of Force Majeure causes a prolonged delay in performing the Work, or if an
interruption in the Work through a Force Majeure occurrence may reasonably be anticipated to
continue for a prolonged period, VIETSOVPETRO may terminate this Subcontract in whole or
in part. Such termination shall not give rise to any claim for compensation other than the same
compensation that SUBCONTRACTOR would have been entitled to receive under Section
2.18.7 if VIETSOVPETRO had terminated this Subcontract in whole or in part for its
convenience, but excluding any termination fee specified in Section 2.18.7(c)(i) where
SUBCONTRACTOR is the Affected Party. The meaning of “prolonged” in this Section 2.10.10
shall depend on the nature of the Work and the effect of the delay in or interruption of the Work.
Within this context, a delay of less than thirty (30) consecutive days might be “prolonged,” but
any delay of thirty (30) consecutive days or more shall in any event be deemed to be “prolonged”
for purposes of this Section 2.10.10.
(b)
Without prejudice to Section 2.10.11, if any occurrence of Force Majeure causes a delay of sixty
(60) consecutive days or more in performing the Work or any material part thereof,
SUBCONTRACTOR may notify VIETSOVPETRO that SUBCONTRACTOR will terminate
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