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General terms

HME Conditions, version June 2002 1

GENERAL TERMS AND CONDITIONS OF CONTRACT

of HOLLAND MARINE EQUIPMENT ASSOCIATION (HME)

Filed with the Clerk of Rotterdam District Court on May 31st 2002, file number 71/2002

Published by Holland Marine Equipment Association, P.O. Box 24074, 3007 DB Rotterdam.

1. Definitions

In these General Terms and Conditions of Contract (hereinafter

referred to as the “Terms and Conditions”), the following terms shall

have the following meaning:

– “Supplier”: any supplier of Goods and/or Services under an

Agreement;

– “Customer”: the party with whom the Supplier entered into

an Agreement;

– “Agreement”: the specific written sales and/or service

contract or acknowledgement of order, with appendices,

between the Supplier and the Customer, including these

Terms and Conditions, which form an integral part thereof;

– “Services”: any services like jobbing, erection, installation,

commissioning, technical assistance, inspection, advice,

repair, overhaul and/or maintenance that the Supplier has

undertaken to provide, whether or not subsidiary to Delivery

of Goods and regardless of their appellation;

– “Goods”: any goods the Supplier has undertaken to

supply, including software and/or hardware, spare parts,

certificates and/or documentation required for proper

Performance;

– “Acceptance Protocol”: the document to be issued and

signed by both parties, which shall constitute evidence that

the Goods delivered and /or Services provided have been

found to be in accordance with an Agreement;

– “Delivery”: the delivery of the Goods, as agreed between the

parties in accordance with the Agreement;

– “Performance”: the provision of Services and/or the supply

of Goods by the Supplier;

– “Contract Price”: the price to be paid to the Supplier in

connection with the Delivery of Goods and/or provision of

Services under the Agreement.

– “Personnel”: all personnel either directly or indirectly

employed or hired by the Supplier, including representatives

of the Supplier

2. General

2.1 These Terms and the Agreement can be amended and

supplemented only if such amendment or supplement has

expressly been agreed upon as such in writing.

2.2 The Agreement replaces all prior oral and written

agreements with respect to the subject matter of the

Agreement.

2.3 Supplier’s offers are without engagement.

2.4 The Agreement is conditional on obtaining of all relevant

export licences.

2.5 The Supplier shall be entitled to subcontract or assign any

part of its rights and obligations out of the Agreement.

3. Obligations of the Customer

The Customer warrants that the Supplier will be enabled to

commence and effect Performance outside Supplier’s works

immediately upon arrival of Supplier’s Goods or Personnel and

without interruption or hindrance. For this purpose, the Customer

shall, before the arrival of Supplier’s Goods or Personnel, make

all the arrangements necessary -whether or not expressly

agreed upon- to ensure that the work can commence at the

agreed date and can be carried out without interruption or

hindrance.

3.1 Technical, Safety and Storage Assistance

3.1.1 In case the Performance takes place at the premises of

the Customer, the Customer shall take all measures

prescribed by law and/or any other reasonable measures

necessary for the prevention of accidents at his premises.

The Customer shall inform the Supplier at least 7 days

before commencement of any work in writing of the valid

safety precautions and shall ensure that his personnel

responsible for safety matters is present during the times

that Performance is to take place. The Supplier is entitled

to refuse or suspend Performance if the safety of his

Personnel is not sufficiently guaranteed.

3.1.2 In addition to article 3.1.1, the Customer shall, at no

charge, provide the Supplier with all assistance the

Supplier reasonably requires, such as -but not limited toskilled

and unskilled personnel, the necessary devices,

implements and auxiliary means, in particular the tools for

the assistant personnel and hoisting gear of sufficient

capacity (including operating staff), scaffolding etc., as

well as cleaning, packing and lubricant materials.

Furthermore, the Customer shall supply heating, lighting,

water and electricity and their connections in sufficient

capacity and quantity as well as welding gas and other

working requirements in so far as these are not to be

provided by the Supplier under the terms of the

Agreement. The equipment made available by the

Customer shall be safe and in perfect condition.

3.1.3 The Customer shall at all times bear responsibility for the

storage of all Goods delivered, including Spare Parts and

other materials, at least in a dry, closed and lockable room

on the site or in its near vicinity, in accordance with normal

practice and/or the instructions issued by the Supplier.

Prior to the commencement of work or installation of these

Goods, they shall be checked by the Customer, in order to

make sure that the Goods are complete and undamaged.

Goods lost or damaged during storage shall be replaced

or repaired at the expense of the Customer.

3.2 Documentation

3.2.1 The Customer warrants that all documents and licences

required in connection with the import and export of the

Goods and/or the stay of Supplier’s Personnel in the

country and at the premises of the Customer shall be

available at the time of arrival of the Goods and/or

Personnel.

3.2.2 The Customer shall, at no charge, provide the Supplier

timely with any information reasonably required in

connection with the Agreement, such as – but not limited

to – relevant technical documentation, logs, inspection

reports and import licences.

3.2.3 The Customer shall keep any information received from

the Supplier strictly confidential, and shall use such

information solely for the proper performance of the

Agreement. All information provided by the Supplier shall

be returned by the Customer to the Supplier on Supplier’s

first request.

3.3 Intellectual property rights

3.3.1 All intellectual property rights, including but not limited to,

all drawings, designs, (technical) documentation, building

specifications, computer programs, as well as the carriers

on which such rights are laid down (hereafter jointly: “I.P.-

rights”), which come to the knowledge of the Customer

during the contract, will at all times remain vested in and

the property of the Supplier and will be returned to the

Supplier upon first request or immediately upon fulfilment

of the contractual obligations of both the Customer and

the Supplier.

3.3.2 All IP-rights produced or developed by or on behalf of the

Customer for or during the Contract, are hereby

transferred and assigned to the Supplier which transfer

and assignment the Supplier hereby accepts. The

Customer shall at first request of the Supplier perform any

act, if any, required by the applicable law to conclude full

transfer of the IP-rights to the Supplier, including signing

additional documents. The Customer hereby transfers in

advance all future IP-rights (“Future IP-rights”) to the

Supplier, which transfer is hereby accepted by the

HME Conditions, version June 2002 2

Supplier to the extent that the law does not permit transfer

in advance of the Future IP-rights, the Customer will, upon

the establishment of any Future IP-rights and at first

request of the Supplier, perform any act required for the

transfer of the Future IP-rights. The Customer hereby

grants the Supplier an irrevocable power of attorney to

perform – in the name of the Customer – all acts

necessary to conclude the transfer pursuant to the

aforementioned IP-rights.

3.3.3 In the event parties decide to deviate from the term and

conditions as laid down in the paragraphs 3.3.1 and 3.3.2,

and agree in writing that the (Future) IP-rights or any part

thereof will be transferred and assigned to the Customer,

the Customer will give the Supplier a perpetual, worldwide,

exclusive, royalty-free and non-transferable licence

for the use, including but not limited to exploitation,

publication and copying, of the (Future) IP-rights or any

part thereof.

4. Terms for Performance

4.1. Place of Performance

The place of Performance shall be stated in the Agreement. In

case the Agreement does not specify a place of Performance,

such place shall be determined by the Supplier at its discretion

after consulting the Customer.

4.2 Times of Performance

4.2.1 Time(s) or periods of Performance shall be stated in the

Agreement. Any time or period of Performance that differs

from the Agreement shall only be binding if they have

been agreed upon by the Supplier in writing. If

Performance is to take place during a specific and fixed

period of time by the expiry of which Performance is

deemed to be completed, any such period will not

commence until all contractual obligations of the Customer

have been met, all payments due have been made,

security desired by the Supplier has been put up and/or

any other preconditions have been fulfilled.

4.2.2 In case the Agreement does not specify the time of

Performance, such time shall be determined by the

Supplier at its discretion after consulting the Customer.

However, as far as the Agreement sees to the provision of

Services, the date of Performance mentioned in the

Agreement shall be an estimate only. The Supplier shall

make every reasonable effort to effect Performance at the

said date.

4.3 Delay in Performance

4.3.1 If Performance is delayed due to (i) any act or omission of

the Customer or (ii) the Customer failing to perform any of

the obligations mentioned in article 3 of these Terms and

Conditions, the Supplier is entitled to extend the time of

Performance with a reasonable period which is at least

equal to the additional period of time caused by such

delay.

Furthermore, it is expressly agreed that the Supplier shall

have the right to extend the time of Performance in the

event that (i) the Supplier has not received the advance

payment (or an other contractual payment) as stipulated in

the Agreement, or (ii) the Customer has not provided

security that complies with the requirements in the

Agreement.

4.3.2 Any additional costs arising from delay which is

attributable to the Customer, shall be borne by the

Customer.

4.3.3 In case the Supplier fails to Perform in time due to

reasons attributable only to the Supplier, a grace period of

two weeks shall apply. Thereafter, the Customer shall be

entitled to claim liquidated damages of 0,5% for each

completed week of delay, calculated on the value of the

delayed Goods. Liquidated damages shall in no case

exceed 5% of the value of the delayed Goods. Liquidated

damages shall only be due if the Customer proves that the

delay caused damage and the amount of the loss suffered

can be substantiated accordingly. Liquidated damages

shall be the Customer’s only remedy for losses incurred

as a result of delay in Performance. Damages other than

the said liquidated damages are explicitly excluded.

4.3.4 In case of any occurrence, either foreseeable or not,

beyond the reasonable control of the Supplier or any of his

sub-Suppliers, which prevents the Supplier from effecting

Performance (“Force Majeure”), the date of Performance

will be extended with at least the period of Force Majeure.

Cases of Force Majeure are in particular -but not limited

to- fire, war or warlike acts, riots, insurrection,

mobilisation, floods, earthquakes and other natural

disasters, epidemics, quarantine measures, strikes,

lockouts, requisitioning, restriction of foreign currency

transfer, transport restrictions, and restrictions in the issue

of permits for the Personnel, importation and exportation

of Goods, tools and/or materials.

4.4 Special provisions for Delivery of Goods

4.4.1 The Customer shall have no right to reject or refuse

Delivery or acceptance of Goods due to minor defects

which do not prevent the normal operation of the Goods,

provided that the Supplier agrees to remedy such defects

after the Delivery of the Goods, in compliance with the

Agreement.

4.4.2 All Goods shall be delivered Ex Works, excluding

packaging, Suppliers premises, The Netherlands, unless

expressly otherwise agreed upon.

4.4.3 In the event that dispatch or collection of the Goods at the

designated place of delivery is delayed for reasons

beyond Supplier’s control, the Supplier shall be entitled to

store the Goods at the expense of the Customer in a

warehouse at Supplier’s choice. Upon storage, Delivery

shall be deemed completed and the risk for the goods

shall transfer to the Customer accordingly.

4.4.4 Unless otherwise agreed upon, the Supplier shall be

permitted to deliver the Goods in partial shipments. Each

shipment may be invoiced separately, in which case the

Customer shall pay the separate invoices as part of the

total Contract Price.

4.4.5 Any alteration of regulations either by Governments or

Classification Societies after the moment on which the

Supplier and the Customer entered into the Agreement,

can never be a ground for liability of the Supplier.

4.5 Special Provisions for the provision of Services

4.5.1 General terms of service and working hours

(1) Performance shall be considered completed when either

– the Supplier has notified the Customer that the provision

of Services has been completed and the Protocol of

Acceptance was signed; or

– eight days have elapsed from the time the Supplier

notified the Customer as above and Customer has

neglected to inspect the Services provided within this time

and/or failed to notify Supplier in writing of its approval or

rejection,

– the Customer commences, without the approval of the

Supplier and during the term of Performance, the use or

the operation of the Goods on which the Services were

provided.

(2) Unless expressly otherwise agreed upon in the

Agreement, Services shall be provided during a working

week which shall be in accordance with normal industry

practice. A working day is deemed to be a manday.

(3) Hours worked outside these normal working hours, on

Sundays or on official holidays will be charged separately

as overtime.

(4) Supplier’s Personnel will be guided, if possible, by the

operational conditions at the Customers premises and by

the climatic conditions of the country.

4.5.2 Additional Obligations of the Customer for the

provision of Services

(1) During Performance, the Supplier is entitled to replace the

Personnel delegated by him by other qualified Personnel.

HME Conditions, version June 2002 3

(2) In case of accidents or illness of Supplier’s Personnel, the

Customer shall provide the necessary (professional)

assistance.

(3) Any waiting time for which the Supplier is not responsible,

will be charged to the Customer as normal working time.

4.5.3 Transfer of risk

(1) In so far as no special agreement is made, the risk of the

accidental destruction or deterioration of the Services as a

whole or of self-contained parts will be transferred to the

Customer at the moment the Supplier notifies the

Customer of the completion of the provision of the

Services. If a trial run or seatrial are agreed upon, the

transfer of risk shall take place upon completion of

successful trial run or seatrial.

(2) Objects and materials made available by the Customer,

will be taken in charge by the Supplier in accordance with

the scope of agreements made for this purpose. The risk

of accidental destruction or deterioration of these objects

and materials shall remain with the Customer; for damage

to these objects and materials for which the Supplier is

responsible, article 7 shall apply.

(3) Should the provision of Services or the trial run or seatrial

be interrupted, stopped or delayed for reasons beyond

Supplier’s control, the risk of accidental destruction or

deterioration of the Services provided shall be transferred

to the Customer during the period of the interruption,

stoppage or delay.

5. Retention of title

5.1 All Goods delivered by the Supplier, shall remain Supplier’

s property until the Customer has fulfilled all its obligations

under this Agreement and under any previous agreement

of similar kind between the Customer and the Supplier.

5.2 Until the moment property has been transferred to the

Customer in accordance with the previous paragraph, the

Customer shall take no actions (like combining the Goods

delivered, either in production or in storage, with other

goods, or transferring, selling or encumbering them in any

respect, or taking them into another country) which could

jeopardise the unfettered execution of Supplier’s property

right. Furthermore, the Customer shall take any actions

reasonably required in order to protect these rights, and

shall immediately return the Goods to the Supplier at first

request.

6. Warranty

6. 1 General

The following paragraphs shall apply to all warranties provided

by the Supplier insofar articles 6.2 and 6.3 do not contain any

differing stipulations applicable to the specific type of warranty.

6.1.1 Any warranty to be provided by the Supplier, shall be

strictly limited to, at its discretion either repair or replace at

its works or at local premises and during normal working

hours, defects due to poor workmanship, use of defective

materials or defective design, provided these defects have

been reported to the Supplier in writing during the

warranty period, within 7 days from the moment the

Customer became known or could reasonably have

become known of the above mentioned defects.

6.1.2. Defective parts which have been replaced shall be made

available to the Supplier upon request and shall be

deemed property of the Supplier from the moment those

parts are exchanged.

6.1.3 The warranty provided does not cover any defect due to or

connected with: (i) any materials or components or design

provided by or on behalf of the Customer, (ii) the

negligence or other improper acts or omissions of the

Customer, its employees or agents or other third parties,

(iii) improper installation and alterations carried out without

Supplier’s prior written consent. In particular, warranty

provided does not cover any defects that are caused by or

connected with normal wear and tear, the use of

unsuitable materials by the Customer or which are caused

by any use, maintenance, service or operation of the

Goods delivered or services provided, which is not in

conformity with Supplier’s manuals, instructions or which

is otherwise not in accordance with good engineering

practice.

6.1.4 The warranty obligation does not include consequential

costs, including -but not limited to- cranage, electricity,

scaffolding, assisting work, docking, demounting,

mounting and travel- and boarding costs of Supplier’s

Personnel. If the warranty obligation has to be carried out

at a location outside The Netherlands, the Supplier bears

only the material costs and the costs of working time

required under normal conditions, as would be incurred

when the warranty obligation would have been carried out

in the Netherlands. The Customer shall bear the costs for

travelling, travelling time, waiting time, day and night

allowances, tariff expenses as well as costs that are to be

borne by the Supplier according to the articles of these

General Terms.

6.1.5 No warranty obligation will be enforceable by the

Customer until the Supplier has received payment of the

Contract Price in full.

6.2 Warranty for Goods delivered

6.2.1 The warranty period ends 12 ( twelve) months after the

date on which

(i) the Goods have been taken into use; or

(ii) a trial run or seatrial has been found successful; or

(iii) the Protocol of Acceptance has been issued;

or 18 (eighteen) months after Delivery of the Goods,

whichever comes first.

6.2.2 No new or additional warranty shall be available for Goods

repaired or replaced according to article 6.1 of these terms

and Conditions.

6.2.3 No warranty shall be available for Goods other than

Goods produced, supplied and/or installed by the

Supplier.

6.3 Warranty for Services Provided

6.4.1 The Supplier warrants Performance to the best of its

abilities. Any additional warranty with respect thereto is

explicitly excluded.

6.4.2 Claims by the Customer for damage to the object(s) upon

which the Services were performed, are governed by

article 7 of these Terms and Conditions.

6.4 Warranty for infringements of intellectual property rights

In case the Goods or Services infringe any third party’s

intellectual property rights, Supplier’s sole obligation shall be to,

at its discretion, either procure the right for the Customer to

continue to use the Goods, or to alter the Goods to make them

non-infringing.

7. Liability

7.1 Supplier’s contractual liability is strictly limited to the

warranty obligations as mentioned in article 6 of these

Terms and Conditions.

7.2 Supplier’s liability shall be strictly limited to (1) the amount

of the Contract Price, calculated at an average use of

manpower and facilities, or (2) the amount which is paid

out under Supplier’s liability insurance policy, which ever

is the lesser.

7.3 The Supplier shall in no event be liable for any economic

losses and/or consequential damage, including -but not

limited to- environmental pollution, docking costs and

mounting and demounting costs.

7.4 The Customer shall indemnify the Supplier against any

costs and damages in connection with claims of any third

party against the Supplier in connection with the

Agreement, in so far the Supplier would not be liable to

the Customer therefor.

8. Payment Terms

8.1 Unless explicitly otherwise agreed upon, payments shall

be made cash on delivery or by payment to a bank

HME Conditions, version June 2002 4

account designated by the Supplier within 30 days of the

date of invoice and without any deductions, compensation

for debts or withholding of any nature.

8.2 Upon reasonable request of the Supplier, the Customer

shall provide sufficient security for the total Contract Price.

If the Customer does not meet any such request of the

Supplier, the Supplier shall have the right to wholly or

partially terminate or suspend the Agreement by a written

notification to the Customer.

8.3 Any objections of whatever kind to invoiced amount shall

be submitted to the Supplier in writing within 14 days of

the date of the invoice, failing which the invoiced amount

shall be deemed to have been accepted by the Customer.

8.4 If the Customer fails to perform any of the above payment

obligations, the Customer shall pay to the Supplier interest

on the amount overdue at 1.5 per cent per month or part

of a month. In addition the Supplier may, after having

notified the Customer in writing, suspend Performance

until payment is received with respect to the Agreement

and/or the above payment terms. All the extra-judicial and

judicial costs of debt collection shall be for the Customer’s

account, whereby a minimum of 15 per cent of the

outstanding amount shall be payable by the Customer.

9. Suspension and Termination of Agreement

In case of Force Majeure, either party’s sole remedy shall be

termination of the Agreement after the period of Force Majeure

has continued without interruption for a period of 6 months.

The Supplier shall be entitled to either suspend Performance or

to terminate the Agreement in case either the Customer does

not meet any of the obligations mentioned in these General

Terms and Conditions of Contract, or the Supplier has reasons

to believe that the Customer shall not be able to meet these

obligations.

10. Applicable Law and Jurisdiction

10.1 This Agreement shall be governed by the laws of the

Netherlands.

10.2 All disputes arising between the parties to this Agreement

shall be settled through friendly consultations between the

Parties.

10.3 In case no agreement can be reached through these

consultations, and the Customer is not a resident of The

Netherlands, the dispute shall be finally settled by

arbitration under the Rules of Arbitration of the

International Chamber of Commerce (ICC), by one or

more arbitrators appointed in accordance with the said

Rules. The arbitral proceedings shall be in the English

language and will take place in the place of residence of

the Supplier, The Netherlands.

10.4 In case no agreement can be reached through these

consultations, and the Customer is a resident of The

Netherlands, the dispute shall be submitted to the

competent Dutch Court.