BUSINESS ACTIVITY

General Terms and Conditions For F.O.B. Sales

Gulf Energy Limited (L.L.C.)

General Terms and Conditions for F.O.B. Sales

CODE (GEL GTC-000913/A)

ARTICLE I – DEFINITIONS

Metric Ton : One Thousand (1,000) Kilograms
Long Ton : Two Thousand Two Hundred and Forty (2,240) pounds
Barrel   : Forty Two (42) U.S. gallons
The Vessel  : Any ship whether owned or chartered or otherwise obtained by “BUYER” which is employed by “BUYER” to load the product(s) at “SELLER’S” delivery point.
Dollars and Cents : Monetary units so designated in the currency of the United States of America.
GEL : Gulf Energy Limited (L.L.C.), P.O. Box  4066, Sharjah, U.A.E.


ARTICLE II – QUANTITY AND QUALITY DETERMINATION

1. The quantity of each delivery shall be determined by shore  tank / mother vessel (as the case may be) measurement carried out by an independent inspector nominated by the Seller and accepted by the Buyer at the port of loading in the manner customary in that port. The quantity so ascertained shall be the Bill of Lading and Invoice quantity. “BUYER” has the right to appoint a representative / another Surveyor at his own cost to be present during the operation of loading from shore tank / mother vessel (as the case may be) and quantity measurement.
2. The quality of each delivery shall be ascertained on representative samples taken from the loading shore tank(s) / mother vessel (as the case may be) before start of loading by an independent inspector appointed by the seller and accepted by the Buyer. Three sets of samples shall be taken for each delivery. The sample shall be sealed and signed by BUYER’s and “SELLER’s representatives (or in the case of BUYER by an independent Inspector). One sample shall be kept by BUYER for its own use. One sample will be properly retained by SELLER as a reference sample and kept for a period of three (3) months after which any claim regarding the product quality will not be entertained.
3. In case any differences arise between “BUYER” and “SELLER” as regard the quality and quantity of the product(s) deliverable hereunder, the matter shall be settled at the port of loading by an independent inspector appointed by mutual agreement between the parties. The inspector’s decision shall be final and binding. The cost of such inspector shall be borne by “BUYER” and “SELLER” on 50/50 basis. Any additional charges of the inspector for performing duties not specified in the agreement shall be for the account of the party so instructing the inspector. Time consumed for quality/quantity determination and analysis shall not be counted as used laytime.
4. Quantities shall be calculated net at 60 degrees F. All measurements, sampling and testing shall be in accordance with the pertinent ASTM or API standard.
5. Shore tank / mother vessel (as the case may be) measurements / analysis for the purpose of quantity and quality of the product shall only be acceptable and binding to the Seller and the Buyer.
6. Specifications, all particulars notified to Buyer (e.g. analytical data) and all documents to which access has been given regarding the characteristics of the Products at any delivery location, shall not be construed as specifications of the Products to be delivered hereunder, but only as indications of the characteristics of the Products available at that location from time to time, and shall not constitute undertakings. Seller reserves the right to make alterations to such particulars or documents or to the Products. That same provision shall apply to the quality of the Products.
7. Products shall be of the quality generally offered by Seller to the Buyer at the time and place of the delivery. Any implied conditions and warranties, including the warranties of merchantability and fitness for a particular purpose, are expressly excluded and disclaimed. Buyer, having greater knowledge than Seller of his own requirements, shall have the sole responsibility for the prior selection of the particular grade(s) and acceptance thereof. 

ARTICLE III – RISK AND TITLE

Each delivery shall be completed and title shall vest absolutely in “BUYER” when the product(s) pass(es) the Vessel’s permanent hose connection at the port of loading at which time “BUYER” assumes all risks in respect of each delivery including loss, damage, deterioration, contamination or evaporation.

ARTICLE IV – PRICE

The price shall be the average of five (5) days (or as may be agreed in the Recap) of the mean of Platts Asia Pacific / Arab Gulf Market scan quotations for the "PRODUCT"  under the heading “FOB Arab Gulf” around cargo B/L date plus a premium per BBL or per Metric Ton (as the case may be) FOB Nosco Terminal Hamriyah –Sharjah.

The Platts quotations to be used are two published quotations prior to B/L date, B/L date and two published quotations after B/L date. If B/L date falls on a non Platts publication date then for pricing purpose only three published quotations prior to B/L date and two quotations after B/L date to apply.

The unit price shall be calculated/rounded up to three (3) decimal places with the third decimal place to be increased to the next digit whenever the fourth decimal place is five or greater than five.

Note: B/L date (loading completion date) is the middle date of the pricing five days.

ARTICLE V – PAYMENT

Payment shall be made by an irrevocable confirmed Letter of Credit payable at sight (or as might be specified and agreed in the Recap) to be issued from a First Class International Bank. The L/C is to be advised through a bank nominated by the Seller and in accordance to Seller’s L/C wording and to be negotiated at the counters of Seller’s bank. The L/C shall be received at Seller's bank at least 3 working days prior to the agreed loading date. Seller has the right to ask for confirmation of the L/C by a bank acceptable to the Seller and the cost of such confirmation shall be to the Buyer's account.

Note: Loading of the product shall be effected by Seller only after receipt of L/C through their L/C advising bank and if there is any delay in receiving of L/C at Seller’s end, such delay will consequently result in delay in effecting the loading of shipment vessel. Any costs / loss incurred by Seller as a consequence of such delay shall be paid to the Seller by the Buyer.

Each of the parties to pay their own banking charges.

Buyer shall remain responsible for payment in the event that payment is not made under the Letter of Credit for any reason.

In case original shipping documents are not available when payment becomes due, Seller to provide Buyer with a Letter of Indemnity in a format acceptable to Buyer (LOI by fax / email acceptable).

ARTICLE VI – VESSEL NOMINATING PROCEDURE AND LOADING CONDITIONS

1.

In respect of each delivery under this agreement, “BUYER” shall nominate to “SELLER” a Vessel complying with such limitations as are contained in this Agreement. “BUYER” shall not nominate a Vessel which is prohibited from operating in the port of loading according to present or future regulations issued by the Government, or authorities responsible for such port loading. Such nominations shall be made in writing to reach “SELLER’S” office no later than five (5) days before the  agreed  loading range and shall specify:

a)    Name, nationality and full particulars of the Vessel or Vessels to be named.
b)    Estimated time of arrival (ETA) at the loading port.
c)    Quantity of product(s) to be loaded as agreed between “BUYER” and “SELLER”.

“SELLER” shall accept or reject the nomination promptly after receipt thereof, having discussed the nominated Vessel with load port authorities, but acceptance may not unreasonably be withheld. Upon receipt by “SELLER” of Notice of Nomination and subject to the foregoing “BUYER” and “SELLER” shall be deemed to have agreed on the loading range. Should the expected date of arrival of the Vessel (or of any Vessel substituted thereof under the provisions of this Clause) fall beyond the range, the “BUYER” shall give a renewal Notice of Nomination which notice “SELLER” shall have the right to reject. “BUYER” shall have the right to substitute for the nominated Vessel another Vessel of similar size and capacity subject to its acceptability to “SELLER”, “BUYER” shall give notice to “SELLER” of the nomination of such substituted Vessel at least three working days before the expected date of arrival of the substituted Vessel or of the expected date of arrival declared in the Notice of Nomination, whichever is the earlier. Should the substitute Vessel differ materially from that originally nominated, “SELLER” will accept or reject such substitute nomination within two working days after receipt thereof.

2.

Concurrent with nominating the Vessel to “SELLER”, “BUYER” shall advise “SELLER” full details of documentation requirements under Article XIV - Other Terms and Conditions (A)  Vessel Documentation below in respect of the cargo to be shipped. If such advice is not received by “SELLER” at least 7 days before the Vessel arrival, then “SELLER” accepts no responsibility accruing therefrom. Vessel will not be handled before the receipt of documentary instructions and any delay resulting therefrom will be for “BUYER’S” account.

3. When the Vessel has arrived at the loadport and is ready to load, a notice of readiness (NOR) shall be tendered to the “SELLER” by the master of the Vessel. NOR to load should be tendered during daylight hours only (NOR after sunset is not acceptable since loadport authority do not berth vessel after sunset). Having been granted berth. NOR shall be given by any available means followed by written confirmation as soon as is practical. The date and hour of tendering and acceptance of NOR shall determine the priority of loading provided NOR is tendered and accepted. “SELLER” undertakes to load the vessel as promptly as possible.

ARTICLE VII – LAY TIME AND DEMURRAGE

Lay Time     : As might be agreed in the Recap.

Demurrage :  Not applicable.

ARTICLE VIII – TRADE MARKS

Nothing contained in the sale contract whether express or implied shall be deemed to confer any right upon “BUYER” to apply any trade mark owned by “SELLER” or any of “SELLER’S” associates to any petroleum products supplied under the sale contract.

ARTICLE XI – FORCE MAJEURE

Neither the Seller nor the Buyer shall be liable for damages or otherwise for any failure or delay in performance of any obligation hereunder other than any obligation to make payment, when such failure or delay is caused by Force Majeure, being any event or occurrence or circumstance reasonably beyond the control of that party, including but without prejudice to the generality of the foregoing, failure or delay caused by  or resulting from Acts of God, strikes, riots, fires,  floods, wars (whether declared or undeclared),  destruction of the product, perils of the sea, embargoes, accidents, restrictions imposed by the government authorities or person purporting to act there for(including allocations, priorities, requisitions, quotas, price controls) delays of the shore tank / mother vessel due to breakdown, adverse weather or sea conditions.

The party whose performance is so affected shall notify the other party indicating the nature of such cause and, to the extent possible, inform the other party of the expected duration of the Force Majeure event.

The time for the seller or Buyer to perform their respective obligations under the sale contract (other than the obligations to pay when due all amounts that are owing to the other which shall not be suspended) shall be extended during any period during which these obligations are prevented, hindered, curtailed or delayed by reason of any force majeure event up to a cumulative period of 30 days. If any of these obligations shall be prevented, hindered, curtailed or delayed for more than 30 days, either party may terminate the sale contract with respect to such delivery upon written notice to the other party.

ARTICLE X – PERFORMANCE

1. If “BUYER” shall fail to take any delivery of product(s) deliverable under the terms of the sale contract through “BUYER’S” own fault and such failure shall not be excused by any other provisions of the sale contract, SELLER shall, in addition to any other legal remedies it may have, be entitled to sell the product(s) comprised in such delivery for “BUYER” and the price so obtained shall be deemed conclusively to be the best price which “SELLER” could obtain. From such price shall be deducted “SELLER’S” expenses incurred through “BUYER’S” failure to take delivery and remainder shall be applied towards the price(s) mentioned in the Agreement and “BUYER” shall pay to “SELLER” the balance, if any, of such price(s) within thirty (30) days of “SELLER’S” invoice.
2. Seller is entitled to recover from Buyer all direct and indirect losses, costs and expenses incurred as a consequence of cancellation of the Contract by Buyer, for whatever reason.
3. The Seller shall not be liable for any special, indirect, consequential, punitive or exemplary damage of any kind including but not limited to loss of prospective profits, anticipated cost savings, contracts or financial or economic loss, claims in tort including negligence of the Seller, its agents, servants or sub-contractors, arising out of, or in connection with, the performance or nonperformance under the Contract.

ARTICLE XI – ASSIGNEMENT

The sale contract when agreed may not be assigned by “BUYER” without prior written consent of “SELLER” which consent may be withheld in “SELLER’S” absolute discretion without assigning any reason thereof.

ARTICLE XII – TERMINATION IN THE EVENT OF LIQUIDATION OR DEFAULT

If “BUYER” shall go into liquidation (other than a voluntary liquidation for the purpose of reconstruction or amalgamation) or shall enter into an agreement or composition with its creditors, or if “BUYER” shall commit a substantial breach of the conditions on his part contained in the sale contract including being in arrears of payment, then “SELLER” shall have the right to terminate the sale contract forthwith on giving to the “BUYER” notice in writing to that effect. Such nomination shall not prejudice any right of “SELLER” which exists at the date of such termination.

ARTICLE XIII – GOVERNING LAW AND ARBITRATION

This Agreement shall be governed by and construed in all respects in accordance with the Laws of the United Arab Emirates.

All disputes in connection with the sale contract shall be finally settled by arbitration in Sharjah-United Arab Emirates under the Rules of Arbitration of the United Arab Emirates or to be resolved by the Court.

ARTICLE XIV– OTHER TERMS AND CONDITIONS

(A)  Vessel Documentation:

1. BUYER” undertakes that each Vessel shall comply with all regulations in force and at the loadport including but not limited to fires onboard vessel or other port regulations or instructions which may from time to time be in force while loading at “SELLER’S” berth.
2. Any vessel nominated to load at the loadport shall be of the dimensions and capacities acceptable to the loadport authorities.
3. Cleaning of any vessel’s tanks whilst alongside a berth is strictly prohibited.

(B)  Load Port Expenses:

1. All Port Dues, Agency charges and/or any other charges on vessel  at load port shall be borne by "BUYER".
2. All Way Leave, Customs Duties and/or any other  charges on cargo at load port shall be borne by "BUYER"

.ARTICLE XV – NOTICES AND COMMUNICATIONS

Any notice or communication given by fax, email. The fax number and email addresses of the Seller are set out below and the parties shall immediately notify one another of any changes thereto”

“SELLER”

ATTENTION:    Marketing Manager
Gulf Energy Limited (L.L.C)
P.O. BOX. 4066
Sharjah- United Arab Emirates
FAX    : 00971 6 5280222

Email: gel@emirates.net.ae

       

These General Terms and Conditions supersedes any other General Terms and Conditions of the Sellers.