GENERAL TERMS AND CONDITIONS OF DELIVERY AND INSTALLATION

for the

Import and Export of Machinery and Equipment

LMW 188A*)

1. PREAMBLE

1.1. These general terms and conditions shall apply unless the contracting parties have expressly agreed otherwise in writing.

2. CONTRACT

2.1. The Contract shall be deemed to have been concluded when the Manufacturer has sent a written declaration of acceptance after having received the order, within the time limit set by the Buyer, if any.

2.2. If the Manufacturer has set a time limit for acceptance when making a written offer, the Contract shall be deemed to have been concluded if the Buyer has sent a written declaration of acceptance before the expiry of the time limit. However, this shall apply only if this declaration of acceptance is received within one week of the expiry of the deadline at the latest.

3. PLANS AND DOCUMENTS

3.1. The information contained in the catalogues, brochures, circulars, advertisements, illustrations and price lists regarding the weight, dimensions, capacity, price, performance and the like are only approximate. They shall be binding only if they are expressly referred to in the Contract.

3.2. Plans and technical documents which are handed over to the Buyer before or after the contract has been concluded, and which can be used for the manufacture and installation of the complete Works**) or parts thereof shall remain the exclusive property of the Manufacturer. The Buyer may not use, copy or reproduce them or hand them over or disclose them to third parties without the latter's consent. They shall become the property of the Buyer,

a) if an express contractual provision so provides, or

b) if they are based on an independent contract concluded prior to the delivery contract for the production of a design and which does not contain any reservation of title in favour of the Manufacturer.

*) If the Parties so choose, these General Terms and Conditions shall apply in the same way as the General Delivery Conditions for the Import and Export of Machinery and Equipment established in Geneva in March 1957 (No. 574 A). The original texts are in French, English and Russian. The observations of the experts who drew up these conditions, and the procedure they followed in doing so, are set out in COMMENTAIRE SUR LES CONDITIONS GENERALES POUR LA FOURNITURE A L'EXPORTATION DES MATERIELS D'EQUIPEMENT No. 188 (document E/ECE/169) published by the ECE. This publication can be obtained from the ECE sales office in Geneva, Switzerland, or through local sales offices for United Nations publications.

3.3. Plans and technical documents handed over by the Buyer to the Manufacturer before or after the conclusion of the Contract, and which may be used for the manufacture and installation of the complete Works or parts thereof, shall remain the exclusive property of the Buyer. The Manufacturer may not use, copy, reproduce or hand them over or disclose them to third parties without the latter's consent.

3.4. At the Buyer's request, the Manufacturer shall, at the commencement of the warranty period (Art. 23), provide to him, free of charge, instructions and drawings, other than shop drawings, containing sufficient particulars to enable the Buyer to use and maintain the Works and all parts thereof (including routine repairs) and to put them into operation, except where the commissioning has been entrusted to the Manufacturer under the Contract. These instructions and drawings shall become the property of the Buyer. The restrictions made in No. 2 of this Article concerning their use shall not apply, but the Manufacturer may prescribe their confidential treatment.

4. PACKAGING

4.1. In the absence of a deviating agreement,

a) the prices stated in the price lists and catalogues do not include packaging;

b) the prices quoted in binding offers and in the contract shall include the necessary packaging or protection to prevent damage to the delivery item on its way to the destination specified in the contract under normal transport conditions.

5. REGIONAL REGULATIONS

5.1. The Buyer shall, at the request of the Manufacturer, assist the Manufacturer in obtaining information regarding the statutory and regulatory requirements relating to the Works, as well as regarding any related taxes and charges.

5.2. If the installation costs change after submission of the offer as a result of a change in the statutory or official regulations, the additional or reduced costs shall be added to or deducted from the installation costs.

6. WORKING CONDITIONS

6.1. Unless the Buyer notifies the Manufacturer to the contrary, the price shall be understood to be subject to the following conditions:

a) The work is not carried out on unhealthy or dangerous terrain;

b) the Manufacturer's personnel have the opportunity to find adequate accommodation and food in the vicinity of the installation site and receive medical attention;

c) the Manufacturer shall be provided in good time and, unless otherwise agreed, free of charge, with equipment, consumables, water and energy at the installation site, to the extent stipulated in the Contract;

**) In these General Conditions, "the delivery item" shall mean the machinery, equipment, materials and other items to be supplied by the Manufacturer under the Contract, and "the Works" shall include both the "delivery item" and all the Works to be carried out by the Manufacturer under the Contract.

d) Unless otherwise agreed, the Buyer shall provide the Manufacturer, delivery item free of charge, with lockable or guarded premises in the vicinity of the installation site in which the delivery item and the equipment, tools and clothing of the installation personnel can be stored and safeguarded against theft and damage;

e) the Manufacturer is not required to carry out any construction or demolition work; nor is he required to take any extraordinary measures to transport the delivery item from the place of unloading to the place of installation, unless he has undertaken to deliver it to that place.

If the conditions set out in the above are not met, the prices shall increase accordingly.

6.2. However, if one or more of these conditions is not fulfilled and the Manufacturer cannot therefore be expected reasonably to carry out the installation, he may refuse to do so, without prejudice to any of his due rights.

7. INSTALLATION BASED ON TIME CALCULATION AND INSTALLATION AT A FLAT RATE (FIXED CONSOLIDATED PRICE)

7.1. The following costs will be invoiced separately for installation, based on time calculation (time and effort basis):

a) the travelling expenses of the installation personnel and the costs of transporting the tools and personal luggage to a reasonable extent based on the Manufacturer's out-of-pocket expenses; the type and class of the means of transport may be specified in the Contract;

b) a daily allowance (including reasonable pocket money) for the entire duration of absence of the installation personnel from their residence; this shall also be paid on rest days and public holidays;

c) the hours worked according to the progress of the work on the basis of the receipts signed duly by the Buyer; overtime, work on Sundays, public holidays and night-time work shall be charged at the special rates specified in the Contract; in the absence of any agreement to the contrary, the hourly rates shall include compensation for wear and tear and amortisation of the Manufacturer's light tool;

d) the time required for:

I) the preparation and completion of formalities for the outward and return journey of the installation personnel;

II) the outward and return journey of the installation personnel;

III) the daily return journey between the accommodation and the place of installation, if it exceeds half an hour and if no reasonable accommodation is available closer to the place of installation;

IV) the waiting time of the installation personnel if the work is interrupted for reasons for which the Manufacturer is not responsible as per the Contract;

e) the expenses incurred by the Manufacturer under the Contract for the provisioning of tools and, where applicable, hiring heavy tools belonging to him;

f) taxes and duties on the invoice amount payable by the Manufacturer in the country where the installation is carried out.

7.2. In the case of installation at a lump sum price, the cost estimate shall include all the individual items listed in Art. 7 No. 1. If, however, the duration of the installation is prolonged due to any circumstance for which the Buyer or one of its suppliers, excluding the Manufacturer, is responsible, and if the work of the installation personnel is interrupted or prolonged as a result, then, the waiting time, the additional working time, the total subsistence costs, as well as the additional travelling expenses of the installation personnel shall be billed separately.

8. INSPECTION AND TESTING OF THE DELIVERY ITEM

INSPECTION

8.1. If the Contract contains an explicit provision for the Buyer's right to inspect, the Buyer shall be entitled to have the quality of the material used and the parts produced inspected and tested by authorised representatives, both during manufacture and after its completion. The inspection and testing shall take place during normal working hours at the manufacturing plant by prior agreement on the date and time.

8.2. If, in the opinion of the Buyer, formed on the basis of this inspection, certain materials or parts of the delivery item are defective or not in conformity with the contract, he must raise his objections in writing stating the reasons.

TESTING

8.3. Unless otherwise agreed, the testing provided for in the Contract (with the exception of the acceptance tests) shall take place at the Manufacturer's plant during normal working hours. If the Contract does not contain any provisions concerning the technical details, the testing shall be governed by the general practice of the industry concerned in the country of manufacture.

8.4. The Manufacturer shall notify the Buyer in sufficient time so as to enable his representatives to be present at the tests. If the Buyer is not represented, he shall receive the test report from the Manufacturer, the correctness of which he is not entitled to dispute.

8.5. If a test (other than an acceptance test as envisaged in Art. 21) shows the delivery item to be defective or not in conformity with the Contract, the Manufacturer shall remedy the defect or restore the delivery item to conformity with the Contract as soon as possible. The test shall be repeated at the request of the Buyer.

8.6. In the absence of any agreement to the contrary, the Manufacturer shall bear all the costs of the tests carried out in his plant, but not the personal expenses of the Buyer's representatives.

9. TRANSFER OF RISK

9.1. Subject to Art. 10 No. 1, the time of transfer of risk shall be determined in accordance with the international rules on the interpretation of Trade Terms of the International Chamber of Commerce (Incoterms) in the version that is in force on the date of the conclusion of the Contract. If the Contract does not specify the type of sale, the delivery item is deemed to be sold "ex works".

9.2. In the case of sale "ex works", the Manufacturer shall inform the Buyer in writing of the time at which the delivery is to be taken. Such information must be given sufficiently well in advance to enable the Buyer to take the measures that are normally necessary.

10. LATE ACCEPTANCE OF THE DELIVERY

10.1. If the Buyer does not accept the delivery at the contractually agreed time, he shall nevertheless make the delivery-dependent payments on the agreed dates, as if the delivery had taken place. The Manufacturer shall arrange for the storage of the delivery item at the Buyer's expense and risk. At the Buyer's request, he must insure the delivery item at the Buyer's expense. However, if the delay in accepting delivery is due to a circumstance provided for in Art. 25 and the Manufacturer is able to store the delivery item on his premises without impediment to his business, the costs of storage shall not be charged to the Buyer.

10.2. If the delay in accepting delivery is not due to a circumstance provided for in Art. 25, the Manufacturer may request the Buyer in writing to accept delivery within a reasonable time. If, for any reason, the Buyer fails to comply with the request within the stipulated period, the Manufacturer may terminate the Contract with written notice (without judicial intervention) in respect of such part of the delivery item as has not been accepted, and thereupon recover from the Buyer any loss suffered by reason of such non-fulfilment. Such compensation shall be limited to the amount stated in A of the Appendix or, in the absence thereof, to the value of such part of the delivery item as per the Contract.

11. PAYMENT

11.1. Payments shall be made in accordance with the agreed terms.

11.2. The advance payments made by the Buyer shall be offset and credited against the delivery price. They do not constitute any penalty, the surrender of which would constitute grounds for termination of the Contract.

11.3. If the delivery item has been delivered before all sums due from the Buyer as per the Contract have been paid, the delivery item shall remain the property of the Manufacturer until full payment has been made, to the extent permitted by the law in whose jurisdiction the delivery item is situated. If the latter does not permit the retention of title but allows the Manufacturer to reserve other rights over the delivery item, the Manufacturer may exercise all such rights. The Buyer is obliged to cooperate with measures taken by the Manufacturer to protect his property right or any other right in lieu thereof over the delivery item.

11.4. The Manufacturer may not claim payment conditional on the performance of any of his own obligations before the performance of his obligation, unless the non-performance is due to an act of commission or omission on the part of the Buyer.

11.5. If the Buyer is in arrears with his payments, the Manufacturer may suspend the performance of his own obligations until the arrears have been cleared, unless the arrears are due to an act of commission or omission on the part of the Manufacturer.

11.6. If the Buyer is in arrears with his payments as a result of a circumstance provided for in Art. 25, the Manufacturer shall not be entitled to claim interest on arrears.

11.7. In all other cases, the Manufacturer shall be entitled to claim from the Buyer, with reasonable advance written notice, interest on the arrears, starting from the due date, and at the rate specified in section B of the Appendix. If the Buyer fails to pay the sum due within the period specified in C of the Appendix, the Manufacturer may withdraw from the Contract with a simple written notice (without judicial intervention) and claim damages up to the amount specified in A of the Appendix.

12. PREPARATORY WORK

12.1. The Manufacturer shall, in good time, supply the plans for the installation of the delivery item, as well as all instructions (which, in the absence of any agreement to the contrary, shall relate only to the Works) that are necessary for the construction of suitable foundations, the unobstructed movement of materials and equipment to the installation site, and the establishing of all necessary connections to the delivery item, regardless of whether the Manufacturer is required to make such connections as per the Contract.

12.2. The Buyer shall carry out the preparatory work in accordance with the plans and instructions supplied by the Manufacturer (cf. No. 1). This work must be completed on time. The foundations must be able to accommodate the delivery item in due course. If the Buyer has to transport the delivery item, this must be done in such a way that the delivery item is at the place of installation on time.

12.3. Costs arising from errors or omissions in the plans and instructions referred to in No. 1 shall be borne by the Manufacturer if they become apparent before acceptance of the delivery item. If such defects or omissions become apparent only after acceptance, they shall be deemed to be design defects within the meaning of Art. 23.

13. LIAISON OFFICERS

13.1. The Buyer and the Manufacturer shall each appoint in writing a responsible representative, both of whom shall be responsible for liaising with each other during the performance of the ongoing Works.

13.2. They are required to stay in the immediate vicinity of the installation site during working hours.

14. AUXILIARY STAFF

14.1. At the request of the Manufacturer, which shall be notified to the Buyer in good time, the latter shall make available to him free of charge the skilled and unskilled labour provided for in the Contract. Should it prove necessary, he shall to a reasonable extent also provide him with unskilled labourers even if this is not provided for in the contract.

15. SAFETY REGULATIONS

15.1. The Buyer shall disclose to the Manufacturer the safety regulations he has issued for his own personnel. The Manufacturer must make it compulsory for his installation personnel to observe them.

15.2. If the Buyer discovers violations of these regulations, he should notify the Manufacturer immediately in writing. He shall be entitled to prohibit offenders from entering the installation site with immediate effect.

15.3. The Manufacturer must draw the Buyer's attention to the particular hazards which may arise from the execution of the installation work.

16. OVERTIME

16.1. The Parties shall reach agreements on the conditions under which overtime is to be allowed, with due consideration for the legal provisions in the country of the Manufacturer and the country in which the installation is to be done.

17. NON-CONTRACTUAL WORK

17.1. The Buyer may not use the Manufacturer's personnel for work that is not covered by the Contract without the Manufacturer's prior consent. Even if the Manufacturer gives his consent, he accepts no liability for this work. The Buyer is responsible for the safety of the Manufacturer's personnel who may be engaged in the process.

18. RIGHT OF CONTROL OF THE MANUFACTURER

18.1. The Manufacturer shall have the right to carry out inspections at the installation site at any time during normal working hours, at his own expense, until acceptance, and during the course of work that is carried out on the basis of the warranty obligation. The persons entrusted with this task shall observe the visiting regulations in force at the Buyer's premises.

19. INSTRUCTION OF THE BUYER'S STAFF

19.1. The Contract may, where appropriate, include conditions under which the Manufacturer shall provide guidance to personnel engaged in the operation of the delivery item.

20. DEADLINE FOR COMPLETION

20.1. In the absence of any agreement to the contrary, the period for completion of the work shall commence on the following date, whichever is the latest:

a) Date of conclusion of the Contract in accordance with Article 2,

b) Date on which the Manufacturer learns that a necessary import licence has been issued,

c) Date on which the Manufacturer receives a contractual deposit that is to be paid before the start of fabrication.

20.2. If completion is delayed by a circumstance provided for in Art. 25 or by an act of commission or omission on the part of the Buyer, then, a period of grace for completion appropriate to the circumstances shall be granted. Apart from the case mentioned in No. 5 of this Article, this will also apply if the cause of the delay occurs after the expiry of the contractually agreed period.

20.3. Where the Contract provides for a binding period for completion, but the Manufacturer fails to complete the Works within the agreed period (or the extended period in accordance with No. 2 of this Article), the Buyer shall be entitled to demand a reduction in the Contract Price, provided that he makes such a request to the Manufacturer in writing and within a reasonable period. However, this will not be applicable if it is evident from the circumstances that he has not suffered any damages. The reduction shall be equal to the percentage of the value as stated in D of the Appendix for that part of the work as a result of the delay, as calculated from the contractually stipulated date of completion, but shall not exceed the maximum rate stated in E of the Appendix. It will be offset against the payments to be made by the Buyer from the time of completion. Subject to No. 5 of this Article, this price reduction shall exclude any further liability for damages on the part of the Manufacturer due to delay in completion.

20.4. If the period for completion that is envisaged in the contract is only approximate, either party may, after the expiry of two thirds of that period, request the other party in writing to agree a binding period for the completion. If the parties fail to agree in any of these cases, either party may, in accordance with Article 28, refer the matter to the arbitration court for determining a reasonable time for completion. The time limit so fixed shall be deemed to be the contractual time limit for completion. The provisions of No. 3 of this Article shall therefore apply to it.

20.5. If the Buyer was entitled to claim the maximum reduction in price specified in No. 3 of this Article in respect of any part of the Works (or would have been entitled to such a right if he had claimed a reduction in price under that provision), he may fix a final time for completion by means of written notice to the Manufacturer. This time shall take into consideration the delay in completion that has occurred already. If, for any reason beyond the control of the Buyer or any Manufacturer engaged by him, the Manufacturer fails to do all that is incumbent upon him to complete his obligation to complete the work within this period, the Buyer may repudiate the Contract with a simple written notice (without judicial intervention) in respect of such part of the Works, and thereupon recover from the Manufacturer any loss or damage suffered by reason of such non-performance. The compensation shall be limited to the amount specified in F of the Appendix or, in the absence of such specification, to the value as per the Contract of that part of the Works which could not be used as intended as a result of the Manufacturer's failure to perform.

21. ACCEPTANCE TESTS

21.1. Unless otherwise agreed, acceptance tests shall be carried out. In this case, the Buyer shall be notified in writing by the Manufacturer as soon as the Works are ready for acceptance. This notification must be made sufficiently in advance so as to enable the Buyer to take all the necessary measures. The acceptance tests shall be carried out in the presence of both parties under the technical conditions envisaged in the contract. In the absence of any such provisions, the acceptance tests shall be carried out as is customary in the relevant branch of industry in the country of manufacture.

21.2. During the acceptance tests, if the Works are found to be defective or in violation of the Contract, the Manufacturer shall remedy the defect or restore the Works to their contractually agreed condition, at his own expense and as soon as possible. At the Buyer's request, the acceptance tests shall be repeated at the Manufacturer's expense.

21.3. Subject to the provisions set out in No. 2, the Buyer shall provide the energy (power), lubricants, water, fuel and all other materials to a reasonable extent, free of charge and to the extent necessary for carrying out the acceptance tests and for configuring the works ready for operation. He shall also make all other necessary arrangements for this purpose at his own expense.

22. ACCEPTANCE

22.1. As soon as the work has been completed in accordance with the Contract and all acceptance tests have been successfully carried out after installation has been completed, the work shall be deemed to have been accepted by the Buyer. The warranty period shall commence at this point in time. The Buyer shall issue a certificate (acceptance report) stating the date of completion and the acceptance test.

22.2. If the Buyer prevents the acceptance tests from being carried out, acceptance shall be deemed to have taken place. The warranty period shall commence upon written notification from the Manufacturer to the Buyer.

22.3. If the acceptance tests cannot be carried out as a result of circumstances prevailing at the Buyer's end, the acceptance tests shall be postponed. It is irrelevant whether these circumstances fall under Art. 25 or not. However, the postponement may not exceed the time limit set by the parties. In the absence of such a time limit, a period of 6 months is taken as the limit. In that case, the following provisions shall apply:

a) The Buyer shall make the payments as if the acceptance had taken place. However, in the absence of an agreement to the contrary, in the event of circumstances constituting a ground for discharge under Art. 25 No. 1, the Buyer need not pay at the time envisaged in the Contract for the acceptance tests the amounts for work that has not yet been carried out, nor pay before the expiry of the warranty period specified in paragraph d) the amounts retained as security for the warranty.

b) The Buyer shall, in due course, notify the Manufacturer in writing of the date from which the acceptance tests may be carried out, and shall request the Manufacturer to fix a new date for their execution. This new date shall be within the period specified in G of the Appendix and shall commence from the date specified by the Buyer in the aforesaid notice.

c) The Manufacturer may, at the Buyer's expense, inspect the Works before the acceptance tests are carried out and repair any defects and damage and make good any losses which may have occurred since the date on which the Works were made available for the acceptance tests to be carried out as per the Contract.

d) The warranty period shall commence on the day on which the deferred acceptance tests are carried out successfully.

e) At the Buyer's request, the Manufacturer shall, in accordance with the contractual provisions relating to the transfer of risk, provide for the protection and maintenance of the Works until the acceptance tests have been carried out. This period is limited to one month, reckoned from the day on which the work was originally made available for the acceptance tests. The Buyer shall reimburse to the Manufacturer the costs of all measures taken by the latter to protect and maintain the Works. After the expiry of this month, the Manufacturer shall be released from the obligations pertaining to the protection and maintenance of the Works, unless otherwise agreed. If the Manufacturer is unable to leave behind personnel on site because of other obligations, he shall give the Buyer all the necessary instructions to enable him, as far as possible, to carry out the necessary measures for the protection and preservation of the Works.

f) If the acceptance tests have not taken place after the expiry of the agreed period or, in the absence of such, after the expiry of 6 months, Art. 22.2. shall apply insofar as Art. 25 does not intervene.

23. WARRANTY

23.1. The Manufacturer is obliged to remedy, in accordance with the following provisions, any defect affecting usability, which can be attributed to a defect in design, material or workmanship.

23.2. This obligation shall apply only to such defects as have been detected during a period the duration of which is specified under H of the Appendix (hereinafter referred to as the warranty period), and which commences upon acceptance.

23.3. Different time limits may be fixed in the Contract for individual parts of the Works expressly mentioned (regardless of whether these have been executed by the Manufacturer or not).

23.4. The daily operating time of the Work, as well as the shortening of the warranty period in case of use beyond the intended daily operating time, are specified under J of the Appendix.

23.5. Any spare parts or repaired parts supplied under this article shall be subject to the same warranty conditions as the original work, with the new warranty period specified under H of the Appendix. For all other parts of the Works, the warranty period shall be extended only by the time during which the Works have been at a standstill as a result of a defect covered by this Article.

23.6. The Buyer may invoke this article only if he notifies the Manufacturer immediately and in writing of the detected defects. He must give the latter every opportunity to ascertain and remedy these deficiencies.

23.7. Upon such notification, the Manufacturer shall remedy the defect as soon as possible and, except in the cases referred to in No. 8 of this Article, at his own expense. Unless the defect requires repair at the place of installation, the Buyer shall send the defective parts to the Manufacturer for repair or replacement. In such a case, the Manufacturer's warranty obligation with regard to the defective part shall be deemed to have been fulfilled if he returns the properly repaired part to the Buyer or delivers a replacement part.

23.8. In the absence of any agreement to the contrary, the Buyer shall be responsible for transporting the defective parts, repaired parts or spare parts between the place of installation and one of the following places, at his own expense and risk:

I) the Manufacturer's plant, if the contract is concluded "ex works" or "free on rail";

II) the port from which the Manufacturer has dispatched the delivery item, if the Contract is FOB, FAS, CIF or C&F;

III) the border of the country from which the Manufacturer dispatched the delivery item, in all other cases.

23.9. If, in accordance with No. 7 of this Article, the repair is to be carried out at the place of installation, and if the parties fail to come to an agreement, all travelling and subsistence expenses incurred by the Manufacturer's personnel, as well as the costs and risks of transporting the material and necessary tools, shall be apportioned between the parties by the arbitrator at his reasonable discretion.

23.10. The defective parts replaced in accordance with this Article shall be at the disposal of the Manufacturer.

23.11. If the Manufacturer refuses to fulfil his obligation or fails to act with due expedition in spite of a reminder, the Buyer may have the necessary repairs carried out at the Manufacturer's expense and risk, provided, however, that he carries them out with due care and in an appropriate manner.

23.12. The Manufacturer's warranty obligation does not extend to defects based on the materials supplied by the Buyer, or which are due to a design prescribed by the Buyer.

23.13. The Manufacturer's warranty obligation applies only to defects that arise under the contractually intended operating conditions and subject to proper usage. It does not apply to defects whose cause occurred only after acceptance. In particular, it does not apply to defects resulting from: poor maintenance by the Buyer, modifications made without the written consent of the Manufacturer, poorly executed repairs by the Buyer or normal wear and tear.

23.14. After acceptance, the Manufacturer shall not accept any liability beyond that stipulated in this Article, even for defects caused before acceptance. It is explicitly agreed that the Manufacturer shall not be liable to pay any compensation to the Buyer for injury to persons or damage to goods which are not the subject matter of the Contract and for damages occurring after acceptance, or for loss of profit, unless the circumstances of the individual case show that the Manufacturer is guilty of gross negligence.

23.15. Any lack of care or skill does not constitute an instance of gross negligence; rather, gross negligence exists only if the Manufacturer disregards serious consequences of an act of commission or omission which he should normally have foreseen if he had exercised due professional care, or if he deliberately disregards the consequences of his conduct.

24. LIABILITY FOR PERSONAL INJURY OR PROPERTY DAMAGE

24.1. In the event of personal injury or damage to property occurring before full acceptance of the work, liability shall be apportioned as follows:

a) I) The Manufacturer shall bear any loss or damage to the delivery item or to the Works that occurred before the transfer of risk, regardless of the manner in which it was caused, except where such loss or damage is due to the act of commission or omission on the part of the Buyer;

II) the Manufacturer shall bear any loss or damage to the delivery item or to the Works that occur after the risk has been transferred, if the loss or damage is caused by an act of commission or omission on the part of the Manufacturer;

III) if any part of the delivery item or the Works is destroyed or damaged without the Manufacturer being responsible for it, in accordance with a I) or a II), the Manufacturer shall replace or repair such parts at the Buyer's request and expense.

b) If the Buyer suffers damage to his property (apart from the Works), such damage shall be compensated by the Manufacturer in so far as he has caused it or in so far as it is due to defects in equipment or tools provided by him for the installation. One prerequisite for this liability, however, is that the circumstances of the case should show clearly that the Manufacturer has disregarded the need for due care and necessary technical expertise.

c) I) In the case of accidents to persons, the Buyer and the Manufacturer shall be liable to the injured party in accordance with the law of the place where the accident has occurred.

II) If the injured party asserts claims against the Buyer, the latter shall have a right of recourse against the Manufacturer only in the cases mentioned under b).

III) If the injured party asserts claims against the Manufacturer, the latter shall have a right of recourse against the Buyer only to the extent that the law of the place where the accident occurred grants such a right, and only on condition that the Manufacturer himself would not have had to compensate the Buyer in accordance with c) II) if the claims had been asserted against the latter.

d) In the event of damage to the property of third parties, the provisions of c) shall apply.

e) The provisions of this Article regarding the contractual liability of the parties shall also apply to their employees. With regard to the skilled and unskilled labour provided by the Buyer in accordance with Art. 14.1, the Manufacturer shall be liable for his instructions and directions insofar as they are incorrect or inaccurately expressed, or have been given to a person who evidently lacked the necessary aptitude.

24.2. In order to be able to assert the rights to which it is entitled under Art. 24.1. c) and d), the party against whom a claim is pressed must inform the other party thereof and leave them free to conduct settlement negotiations if they so wish, or to enter into or participate in the proceedings in their place, insofar as this is possible under the law of the court concerned.

24.3. Any limit on the compensation payable by the parties under this Article shall be set out in I of the Appendix.

24.4. The provisions of this Article shall also apply if the Manufacturer fulfils his obligations under Art. 23 at the place of installation.

25. REASONS FOR EXONERATION

25.1. 25.1. The following circumstances shall be deemed grounds for exoneration if they occur after the conclusion of the Contract and stand in the way of its performance:

Labour disputes and any circumstances independent of the will of the parties, such as fire, mobilisation, confiscation, embargo, ban on transfer of foreign exchange, insurrection, lack of transport, general shortage of supplies and restriction of energy consumption.

25.2. The party invoking any of the above circumstances shall notify the other party immediately and in writing of their occurrence and cessation.

25.3. The consequences of these circumstances with regard to the time limit for the fulfilment of the party's obligations are determined in Art. 10, 11, 20 and 22. If, however, these circumstances make it impossible to fulfil the contract within a reasonable time, then, without prejudice to Art. 10 No. 2, 11 No. 7 and 20 No. 5, either party shall have the right to dissolve the contract by simple written notice (without judicial intervention).

25.4. In the event that the Contract is dissolved in accordance with No. 3 of this Article, the parties shall agree on the distribution of the costs that have been incurred already for its execution through amicable settlement.

25.5. If an amicable settlement is not reached, the arbitration court will have to decide which party has been prevented from fulfilling its obligations. That party shall reimburse the other party for the said costs, less any sums due to it under No. 7. If these exceed the amount of the aforementioned costs, the concerned party shall be entitled to compensation for the additional amount. If the arbitration court decides that both parties were prevented from fulfilling their obligations, it shall apportion the costs in an equitable manner, taking into account all the circumstances of the case.

25.6. For the purposes of this Article, "costs" shall mean the reasonable actual expenses. Each party shall ensure that its loss remains within the narrowest possible limits. As regards delivery to the Buyer, the Manufacturer's expenses shall be deemed to be that part of the Contract Price which corresponds to such delivery, taking into account all the work that has is carried out during the installation of the delivery item.

25.7. The Buyer shall be compensated for all sums which he has paid to or is liable to pay to the Manufacturer by deducting these from the costs incurred by the Manufacturer under the provisions of the Contract.

The Manufacturer shall be compensated for that part of the contractually agreed sale price which corresponds to the actual delivery by deducting from them the costs incurred by the Buyer. In the case of an incomplete delivery, the value corresponding to that incomplete delivery shall be credited. In both cases, all work carried out during the installation of the delivery item shall be taken into account.

26. LIMITATION OF DAMAGE COMPENSATION

26.1. If a party is obliged to pay damages, these are to be paid to the extent of the damage that was foreseeable for the party at fault at the time of concluding the contract.

26.2. The party invoking non-performance of the Contract shall be obliged to do everything to mitigate the damage incurred, provided that it does not thereby incur unreasonable costs or disadvantages. Otherwise, the party who has not performed the Contract may claim a reduction in damages on the basis of this omission.

27. TERMINATION OF CONTRACT

27.1. Termination of the contract, for any reason whatsoever, shall not entail the loss of the rights of the parties which have accrued during the term of the Contract up to the point of its termination.

28. ARBITRATION, APPLICABLE LAW

28.1. All disputes arising from the Contract shall be settled finally under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with these Rules.

28.2. In the absence of any agreement to the contrary, the Contract shall be governed by the law of the Manufacturer to the extent permitted by the law of the country in which the Works are carried out.

28.3. The arbitrators shall decide on an equitable basis only if the parties explicitly agree to it.

APPENDIX

ANNEX

of the German capital goods industry to the

ECE General Terms and Conditions of Delivery and Installation for the Import and Export of Machinery and Equipment*)

The following provisions contain the information provided for in the Annex to the General Terms and Conditions of Delivery and Installation as well as further supplementary agreements of the contracting parties.

In the case of differences in the interpretation of the German text and the text in another language, the German text shall be authoritative.

1. Regarding Art. 1

All agreements between the contracting parties must be in writing in order to be valid.

2. Regarding Art. 3

The indications referred to in Art. 3 No. 1 shall have binding force only insofar as they are expressly designated as binding in the contract.

3. Regarding Art. 9

If, in the case of a sale "ex works", the Manufacturer, at the request of the Buyer, undertakes to dispatch the goods, the risk shall pass to the Buyer when the goods are handed over to the first carrier, provided that this point in time is earlier than the point in time stipulated in Article 9 No.

If, in the case of sale "ex works", the Buyer does not take delivery of the delivery item due to a circumstance referred to in Art. 25, the risk shall pass to the Buyer at the latest at the time of the occurrence of this circumstance.

4. Regarding Art. 10

The maximum amount of damages (Art. 10 No. 2, Annex, item A) shall be 25% of the value of the part of the delivery item in question resulting from the contract. The Buyer is entitled to prove a minor damage of the Manufacturer.

5. Regarding Art. 11

The Manufacturer shall be entitled to refuse performance if, owing to a circumstance arising after the conclusion of the contract, he has reason to fear that he will not receive the Buyer's consideration in full and on time (Art. 11 No. 5).

The interest rate (Art. 11 No. 7, Annex Item B) shall be 8 percentage points above the rate of the marginal lending facility of the European Central Bank applicable at the time the payments fall due. The new warranty period (Art. 11 No. 7, Appendix item H) is 1 months. The maximum amount of the damage sum shall be 25% of the value of the relevant part of the delivery item resulting from the contract and other supplementary agreements of the contracting parties. Buyer is entitled to prove a minor damage of the Manufacturer.

6. Regarding Art. 20

A further precondition for the commencement of the completion period (Art. 20 No. 1) is that agreement has been reached on all technical questions, the clarification of which the parties reserved the right to negotiate at a later stage when the contract was concluded, and that any approval necessary for the fulfilment of the contractor's obligations has been granted.

The price reduction (Art. 20 No. 3, Annex, Items D + E) amounts to 0.5% for each completed week; it cannot exceed 5% in total.

In the case of Art. 20 No. 5 (Annex item F), the parties are required to reach an amicable settlement. The amount of damages shall be calculated according to the circumstances of the individual case within the limits of 5 and 25 % of the contract price for that part of the work which could not be used in the intended manner as a result of the delay in completion; damages exceeding this amount shall only be compensated in cases of intent, gross negligence and culpable breach of material contractual obligations within the meaning of Clause 13 of this Schedule.

7. Regarding Art. 21

Acceptance tests (Art. 21 No. 1) shall only take place if expressly agreed in the contract.

8. Regarding Art. 22

The period for postponement mentioned under Art. 22 No. 3 Clause 3 may not exceed 3 months.

The period provided for in Art. 22 No. 3 b (Annex Item G) may not exceed 3 weeks and must be within the period of 3 months mentioned in the preceding sentence.

The date specified by the Buyer from which the acceptance tests can be carried out must be chosen in such a way that the above deadlines can be met.

9. Regarding Art. 23

The Buyer shall inform the Manufacturer of the protective devices that he will require to protect against hazards when using the delivery item or the Works. They shall be supplied at the Buyer's expense if the parties have agreed on the type and scope of the protective devices to be supplied. Their absence beyond this delivery obligation does not constitute a defect (Art. 23 No. 1).

The warranty period (Art. 23 No. 2, Appendix Item H) is 12 months, unless a different warranty period is explicitly agreed in the contract.

The daily operating time (Art. 23 No. 4, Appendix Item J) is 8 hours. In the event of longer use, the warranty period shall be shortened accordingly.

The new warranty period (Art. 23 No. 5, Appendix item H) is 0 months

There is no warranty obligation of the Manufacturer either for the products supplied by the Buyer (Art. 23 No. 12).

All claims for defects of the Buyer will expire, unless otherwise agreed, after the expiry of 12 months following acceptance (Art. 23 No. 13).

In all other respects, item 13 of this Appendix shall apply mutatis mutandis (Art. 23 No. 14).

10. Regarding Art. 24

The maximum rate of compensation for damage to property shall be 25% of the value of the total delivery price resulting from the contract (Art. 24 No. 3, Appendix Item I). Compensation for property damage cannot exceed Euro 100,000.00 in any case. In all other respects, Item 13 of this Appendix shall apply mutatis mutandis.

11. Regarding Art. 26

Art. 26 No. 1 shall be omitted.

12. Regarding Art. 28

The contract is subject to German law (Art. 28 No. 2).

13. Exclusion of other claims of the Buyer

Further claims of the Buyer, in particular, compensation claims for damages of any kind, including such damages which have not occurred to the delivery item or to the work itself, are excluded, irrespective of the legal grounds on which they are asserted.

This exclusion of liability shall not apply in the event of intent, gross negligence on the part of the owner or executive employees, culpable injury to life, limb or health or culpable breach of major contractual obligations.

In the event of culpable breach of major contractual obligations, the Manufacturer shall be liable, except in cases of intent and gross negligence on the part of the proprietor or executive employees, solely for damage that is typical for the contract and can be reasonably foreseen.

Furthermore, this exclusion of liability does not apply in cases in which liability is assumed under the Product Liability Act for personal injury or property damage to privately used objects in the event of defects in the delivery item. It will also not apply in the event of damage due to fraudulent misrepresentation or despite special warranty promises.