Kuwait - GENERAL CONDITIONS OF CONTRACT

KUWAIT OIL COMPANY (K.S.C)

GENERAL CONDITIONS OF CONTRACTfor

ENGINEERING AND CONSTRUCTIONCONTRACTS

1999

ISSUED JUNE 1999 AHMADI

KUWAIT OIL COMPANY (K.S.C.)(Register of Commerce No. 21835)

GENERAL CONDITIONS OF CONTRACT- for -ENGINEERING AND CONSTRUCTION CONTRACTS

1. DEFINITIONS

In the Contract (as herein defined) the following expressions shall, unless thecontext otherwise requires or the Contract Specification otherwise defines, havethe meanings hereby assigned to them:-

1.1 “Adjustment Order” means a written adjustment to the Contract signed by bothparties pursuant to instruction issued by the Superintendent to the Contractor toexecute a Variation and as further described in clause 49. The conditionality ofsigning by both parties shall not apply in the event the Company exercises its rightunder clause 57.1.

1.2 “Certificate of Completion” means the certificate issued by the Superintendentstating that the Contractor has completed the Works (excluding obligations to becarried out under the Defects Liability Period) and as further detailed in clause 47.

1.3 “Company” means Kuwait Oil Company (K.S.C.) a company registered in theState of Kuwait under Register of Commerce No. 21835, its legal successors andassignees. Any powers or discretions exercisable under the Contract by theCompany shall, unless the context otherwise requires, be exercisable by theChairman and Managing Director of the Company or by his appointed delegate. The Chairman and Managing Director or his appointed delegate shall have theauthority to bind the Company in relation to any matter arising out of or inconnection with this Contract.

1.4 “Contractor” means the person or persons, firm or company named in theMemorandum of Agreement and includes the Contractor's personalrepresentatives, successors and permitted assignees.

1.5 “Contract” means the aggregate of all documents specified in the Memorandumof Agreement.

1.6 “Constructional Plant” means all vehicles, tools, plant, equipment, appliances,consumables and materials of whatsoever nature required for the performance ofthe Works and Temporary Works, but does not include materials or other thingsintended to form, or forming, part of the Works.

1.7 “Contract Period” means the period commencing from the Date forCommencement until expiry of the Defects Liability Period.

1. DEFINITIONS (CONT’D.)

1.8 “Contract Price” means the fixed lump sum price or rates stated in the Form ofTender forming the Contract.

1.9 “Date for Commencement” means the date from which the Contractor shallcommence the Works and as further described in clause 43.

1.10 “Date for Completion” means the last day by which the Contractor shallcomplete the Works, (excluding the obligations to be carried out under the DefectsLiability Period) and as further detailed in clause 46.

1.11 “Defects Liability Period” means the period stated in clause 48.1 applicable tothe Works or any section of the Works if so stated in the Contract Specification,commencing from the date of the Certificate of Completion.

1.12 “Defects Rectification Certificate” means the certificate issued by theSuperintendent to the Contractor on the Contractor making good and rectifyingany defects, omissions or faults in the Works and as further described in clause48.3

1.13 “Drawings” means the drawings referred to in the Technical Specification andany written modifications thereto or other drawings as may be supplied by theCompany or supplied by the Contractor and from time to time be approved inwriting, by the Superintendent or the Superintendent’s Representative.

1.14 “Final Acceptance Certificate” means the certificate issued by theSuperintendent stating that the Contractor has complied with its obligations underthe Contract and as further described in clause 48.4.

1.15 “Force Majeure” has the meaning ascribed to it in clause 59.

1.16 “month” means a Gregorian calendar month, and “day” a calendar day.

1.17 “Performance Bond” means the unconditional bank guarantee furnished by theContractor prior to signing of the Contract in a format approved by the Companyas more particularly dealt with in clause 63.

1.18 “Programme” means the programme of work referred to in clause 45 uponhaving been approved by the Superintendent.

1.19 “Site” means the lands and other places on, under, in or through which theWorks are to be performed and any other lands or places provided by theCompany for the purposes of the Contract.

1. DEFINITIONS (CONT’D.)

1.20 “Sub-contractor” means any person, persons, firm, partnership, corporation orcombination thereof to whom any part of the Contract has been sub-contracted.

1.21 “Superintendent” means the person or persons referred to in the ContractSpecification or appointed from time to time by the Company and notified inwriting to the Contractor to act as Superintendent for the purposes of the Contract.

1.22 “Superintendent's Representative” means the person or persons referred to inthe Contract Specification or appointed from time to time by the Company or theSuperintendent to perform the duties set forth in clause 11 and whose authority isnotified in writing to the Contractor by the Superintendent.

1.23 “Temporary Works” means all temporary works of every kind required in orabout the performance of the Works and shall include, but not by way oflimitation, all temporary buildings, roads and services.

1.24 “Variation” means any increase or decrease or changes to the Works pursuant toan Adjustment Order and as further described in clause 49.

1.25 “Vendor” means any manufacturer or supplier who provides equipment ormaterials to be incorporated in the Works.

1.26 “Works” means and includes all those things to be done or provided by theContractor together with all other obligations to be performed by, andresponsibilities of, the Contractor within the Contract Period under and (includingthe obligations to be carried out under clause 48), pursuant to the Contract.

1.27 “Work Permit” means any permits required by the Contractor to perform theWorks or any part of them.

2. LANGUAGE AND INTERPRETATION

2.1 All communications in connection with this Contract and its performance shall bein the English language.

2.2 Words importing the singular only also include the plural and vice versa where thecontext requires.

2.3 Unless otherwise specified all reference to clause numbers is restricted to theseGeneral Conditions for Engineering and Construction Contracts contained in thisdocument.

3. ENTIRE AGREEMENT

3.1 The Contract embodies the entire agreement between the Company and theContractor. The parties shall not be bound or obligated by any statement,representation, promise, inducement or understanding of any nature not set forthin the Contract. No changes, amendments or modifications of any of the termsand conditions of the Contract shall be valid unless reduced to writing and signedby both parties.

3.2 All approvals by the Company or the Superintendent shall be in writing andwherever any of the words "approval", "authorised", "approved" and"authorisation" is used, it shall mean in writing.

3.3 Any review, agreement or approval by the Company related to the Works shallnot act as a waiver of the Contractor’s obligations under the Contract.

4. WAIVER

None of the provisions of the Contract shall be considered waived by theCompany except when such waiver is made in writing by the Superintendent. Nosuch waiver shall be or be construed to be a waiver of any past or future default,breach or modification of any of the terms or conditions of the Contract except asexpressly stated in such waiver.

5. INSPECTION

Inspection or non-inspection, witnessing or non-witnessing, approval or non-approval by the Company or its representatives of any matter required to be doneby the Contractor shall not be construed as acceptance by the Company nor act asa waiver of the Contractor’s obligations to comply with the requirements of theContract and being free from defects and capable of performing its properfunction.

6. EXTENT OF CONTRACT

The requirements of the Contract comprise the execution and completion of theWorks and the provision of all labour, transport, Constructional Plant, TemporaryWorks, materials and everything, whether of a temporary or permanent nature,required in and for such execution and completion so far as the necessity forproviding them is specified in, or is reasonably to be inferred from, the Contract.

7. DOCUMENTS MUTUALLY EXPLANATORY

7.1 All parts of the Contract are intended to be correlative and complementary andany obligation imposed by one part and not mentioned in another shall beperformed to the same extent and purpose as though required by all. Themisplacement, addition or omission of a word or character shall not change theintent of any part of the Contract from that set forth by the Contract as a whole.

7.2 Ambiguities or discrepancies between the documents shall be explained andadjusted by the Superintendent by way of a written instruction to the Contractor.

7.3 Where different standards relative to the same matter appear or are referred to inthe Technical Specifications, then the most stringent of such standards shall apply.

8. INDEPENDENT CONTRACTOR STATUS

8.1 For the purpose of the performance of the Works, the parties acknowledge thatthe Contractor is an independent principal and is not an agent of the Company.

8.2 The Contractor has no authority to bind the Company in any way without theexpress prior written agreement of the Company.

8.3 All persons employed by the Contractor or introduced by the Contractor on theWorks shall be deemed employees (or agents as the case might be) solely of theContractor, and all debts, liabilities, and obligations of any kind imposed upon orincurred by the Contractor in the performance of the Works shall be deemed to bedebts, liabilities and obligations solely of the Contractor.

9. ASSIGNMENT

The Contractor shall not assign the Contract nor any part thereof without the priorwritten consent of the Company nor shall the Contractor without the prior writtenconsent of the Company assign any benefit or interest in or under the Contract,except where an official assignment of any monies due or to become due underthis Contract is made in favour of the Contractor's bankers.

10. SUB-CONTRACTING

10.1 The Contractor shall not sub-contract the whole nor any part of the Works withoutthe Company's prior written consent. Where sub-contracting is a specificrequirement of the Contract, or where the Company consents in writing to sub-contracting, the sub-contracting shall not act as a waiver of any of theContractor’s liabilities or obligations under the Contract and the Contractor shallbe responsible for the acts, defaults and neglects of any Sub-contractor, its agents,servants or workmen as if they were the acts, defaults and neglects of theContractor, its agents, servants or workmen. Sub-contracting shall not create anycontractual relationship between any Sub-contractor and the Company.

10. SUB-CONTRACTING (CONT’D.)

10.2 The Contractor shall not be liable, notwithstanding the provisions of clause 10.1 in respect of any Sub-contractor or Vendor nominated by the Company being indefault, provided that the Contractor itself is not the cause partially or wholly ofsuch default. For the purposes of this clause a Company nominated Sub-contractor or Vendor shall not include a Sub-contractor or a Vendor selected bythe Contractor from a list (of whatever number) of Companyapproved/recommended Sub-contractors or Vendors.

10.3 All agreements made between the Contractor and any Sub-contractor must be inwriting and must provide that in respect of the work or goods the subject of thesub-contract, the Sub-contractor shall be bound to the Contractor under the sameobligations and liabilities as are imposed upon the Contractor under the terms ofthis Contract.

10.4 The Contractor shall comply with Ministerial Order No. 44/1985 issued by theMinistry of Finance and Economy concerning notification by contractors abouttheir sub-contractors.

11. SUPERINTENDENT AND SUPERINTENDENT'S REPRESENTATIVE

11.1 The Superintendent is the Company’s representative with respect to theperformance of the Works and the administration of the Contract and is authorisedto give instructions in relation thereto.

11.2 The Superintendent may at any time review and inspect the Works, or any portionof them, and the Contractor shall give him access, at all reasonable times, to theContractor’s, Sub-contractor’s and Vendor’s manufacturing facilities, qualitycontrol procedures, engineering tools and data, including computer and schedulingprograms. The Superintendent may reject any drawings, specifications, materialsand equipment or workmanship which do not comply with the requirements of theContract.

11.3 The Superintendent is authorised to make final decisions on all questions involvingthe interpretation of the specifications and any Drawings and documents furnishedby the Company to the Contractor.

11.4 No approval given by the Superintendent shall be binding unless given in writing,and wherever the words “approved”, “authorised”, “approval”, or“authorisations” are used it shall mean subject to being in writing.

11.5 Any review, agreement or approval by the Superintendent shall not be a waiver ofthe Contractor’s obligations under the Contract.

11. SUPERINTENDENT AND SUPERINTENDENT'S REPRESENTATIVE(CONT’D.)

11.6 The Superintendent may from time to time delegate in writing to theSuperintendent's Representative any of the powers and authorities vested in theSuperintendent and shall furnish to the Contractor a copy of all such writtendelegation of powers and authorities. Any written instruction or approval given bythe Superintendent's Representative to the Contractor within the terms of suchdelegation, shall bind the Contractor as though it had been given by theSuperintendent, provided always that:

11.6.1 failure of the Superintendent's Representative to disapprove any work ormaterials shall not prejudice the power of the Superintendent thereafter todisapprove such work or materials and to order the pulling down, removalor breaking up thereof;

11.6.2 if the Contractor is dissatisfied by reason of any decision of theSuperintendent's Representative it may refer the matter to theSuperintendent, who shall thereupon finally confirm, reverse or vary suchdecision;

11.6.3 the Superintendent shall not delegate to the Superintendent’sRepresentative the authority and powers under clause 49.

11.7 The Superintendent's Representative shall be given access to the Site at any timeto monitor the Works and to test and examine any materials to be incorporatedinto, or workmanship employed in connection with, the Works, but shall have noauthority to relieve the Contractor of any of its duties or obligations under theContract nor, except as expressly provided hereunder, to order any workinvolving delay or any extra payment by the Company nor to make any Variationto the Works.

12. PLANS, DRAWINGS AND SPECIFICATIONS

12.1 The Contractor shall keep one copy of the Drawings and any other documentsfurnished to it by the Company on the Site and the same shall at all reasonabletimes be available for inspection and use by the Superintendent or theSuperintendent’s Representative or by any other person authorised by theSuperintendent.

12. PLANS, DRAWINGS AND SPECIFICATIONS (CONT’D.)

12.2 The Contractor shall check all Drawings and other documents including data anddesign supplied to it by the Company for accuracy within twenty-one days of theirbeing so supplied and shall promptly notify the Company of any discrepancies. The Company shall be responsible for the accuracy of Drawings and otherdocuments supplied by it insofar as such inaccuracies could not reasonably havebeen detected by the Contractor, any provision of these General Conditions forEngineering and Construction Contracts notwithstanding. All reasonable costsincurred as a result of inaccuracies for which the Company is responsiblehereunder shall be reimbursed to the Contractor.

12.3 The Contractor, if so directed by the Company, shall, prior to the issue of theCertificate of Completion or prior to termination of the Contract or before theContractor commences the Works, promptly provide to the Superintendent allDrawings and specifications provided under the Contract or required to bedeveloped by the Contractor.

12.4 All Drawings, specifications and other documents developed by the Contractorunder the Contract shall become the property of the Company.

13. FURTHER DRAWINGS AND INSTRUCTIONS

The Superintendent or the Superintendent’s Representative may provide theContractor during the Contract Period such further Drawings and instructions asshall be necessary for the proper execution of the Works and the Contractor shallcarry out the Works in accordance therewith.

14. CONTRACTOR'S DESIGN AND ENGINEERING

14.1 The Contractor, at its cost, shall promptly rectify all discrepancies, errors oromissions in its engineering, design or Drawings and other data supplied by it,whether the design, Drawings or data have been approved by the Company ornot, provided such discrepancies, errors or omissions are not solely due toinaccurate information or data furnished in writing to the Contractor by theCompany and could not reasonably have been detected by the Contractor, inwhich case the Company will be responsible, any provision to the contrary hereinnotwithstanding.

14.2 The Company shall pay all reasonable extra costs incurred by the Contractor dueto any alterations to the Works necessitated solely by reason of inaccurateinformation supplied to the Contractor by the Company, provided suchinformation was supplied in writing by the Company. If such information wasnot so supplied by the Company, the Company will have no obligation to paycosts as aforesaid.

14. CONTRACTOR'S DESIGN AND ENGINEERING (CONT’D.)

14.3 The Contractor shall not start construction or installation work before the relatedengineering, design and Drawings required by the Technical Specification areapproved by the Superintendent. Such approval or reasons for rejection will begiven by the Company within fourteen (14) calendar days after submission ofthem to the Superintendent by the Contractor.

14.4 The Contractor, prior to issue of the Certificate of Completion, shall provide suchDrawings, specifications, calculations and other information as may be requiredwith respect to the suitability and adequacy of the engineering and design togetherwith all necessary operating and maintenance manuals.

14.5 The Contractor shall not be entitled to any extension of time or resultant costs forany delay in the commencement of the Works due to the late submission of theengineering, design or the Drawings to be prepared by the Contractor pursuant tothis Contract.

14.6 No proposed modification of or alteration to the Contractor’s engineering ordesign submitted to the Superintendent for approval shall be valid unless approvedin writing. If such proposals are submitted with a view primarily to achievingeconomies in cost to the Contractor they shall not be approved by the Companywithout a commensurate reduction in the Contract Price. The Company may notapprove such proposals without giving reasons therefor.

14.7 The Contractor shall ensure that Drawings submitted by it comply with theCompany's General Specification for Engineering Draughting and Microfilming(Feb. 1984).

14.8 The Contractor shall submit to the Superintendent all "as built" or "as laid"Drawings of the Works prior to the issue of the Certificate of Completion.

15. INSPECTION OF THE SITE

The Contractor shall be deemed to have inspected and examined the Site and itssurroundings and to have satisfied itself as to the form and nature of the Site(insofar as could be reasonably ascertained on the Site visit), the full extent andcharacter of the Works, the means of access to the Site and the accommodationand other facilities required for the execution of the Works, and to have taken intoaccount any physical or natural impediments, anticipated or otherwise, (includingclimatic conditions) which may appear at the Site.

16. SUFFICIENCY OF CONTRACT PRICE

16.1 The Contractor shall be deemed to have made proper allowance in the ContractPrice of its obligations under the Contract, and the Contract Price shall be deemedto cover all its obligations under the Contract and all matters necessary for theproper execution of the Works.

16.2 The Contractor shall remain liable to perform all of its obligations under theContract, notwithstanding that it did not foresee any matter which has affected or may affect the performance of the Works.

17. CONTRACT PRICE

17.1 The Contract Price is a fixed price or rates and shall not be adjusted except wherepermitted by and in accordance with this Contract.

17.2 The Contractor shall not be entitled to claim for any variation in wage rates, thecost of materials, Constructional Plant, Temporary Works, transport or any otheritem which the Contractor is responsible for providing under the Contract, inparticular the Contractor shall not be entitled to make any claim for additionalpayment in the event of:

17.2.1 any misunderstanding by the Contractor in respect of any matter relatingto the Works;

17.2.2 any failure by the Contractor to obtain correct information pursuant to itsobligations under clauses 14, 15 and 16.

18. WARRANTIES

18.1 The Contractor warrants that:

18.1.1 it shall execute and complete the Works in a workmanlike manner and inaccordance with the Contract and shall comply with the Superintendent'sinstructions and directions on any matter arising out of or in connectionwith the Works;

18.1.2 it possess the specialised knowledge, expertise and experience necessary toenable it to comply with the requirements of this Contract and to executethe Works in accordance with the requirements of this Contract;

18.1.3 each member of its personnel shall be sufficiently qualified, skilled,experienced and competent to perform the Works safely, reliably and tothe high standards reasonably to be expected from personnel of theContractor;

18. WARRANTIES (CONT’D.)

18.1 (Cont’d.)

18.1.4 it shall exercise the degree of professional skill, care and judgement inperformance of the Works and as it is reasonable to expect from anorganisation possessing the specialised knowledge, expertise andexperience of a contractor and who enjoys a high reputation in work in thenature of the Works;

18.1.5 it shall perform the Works in accordance with good industry practices andrelevant standards and shall comply with all relevant Kuwait national andlocal laws and regulations applicable to the same and in accordance withthe requirements of the Contract;

18.1.6 it shall comply with the directions of the Company, and shall furnish allresources and personnel required for the Works;

18.1.7 all items of plant, equipment and tools utilised by it for the provision ofthe Works shall be maintained at all times in a safe and good workingcondition and shall be fit for their respective intended purposes;

18.1.8 all materials and products furnished by it and its Vendors and Sub-contractors and or utilised in the Works shall be free from defects andshall meet the specifications relating to them and all quality standards andother requirements and shall be fit for their intended purpose;

18.1.9 it shall perform its design, engineering and construction in accordancewith sound engineering design, procurement and construction principlesand good engineering practice, all applicable codes and mandatoryregulations, so that its design and engineering will be such as to permit theWorks and all components thereof to comply with the requirements of theContract.

19. CONTRACTOR'S REPRESENTATIVE

19.1 The Contractor shall ensure that a competent and authorised agent orrepresentative is constantly present during the performance of the Works and whoshall be responsible for its supervision and who shall receive on behalf of theContractor notices, directions and instructions from the Superintendent or (subjectto clause 11) the Superintendent's Representative.

19. CONTRACTOR'S REPRESENTATIVE (CONT’D.)

19.2 The Contractor shall employ a full time English-speaking engineer or supervisoron the Works who shall be qualified, skilled and experienced in work of a similarcharacter to the Works, but who shall not be engaged on the Works without theSuperintendent’s prior approval and shall not be removed from the Works by theContractor without the agreement of the Superintendent. Subject to the specificagreement of the Superintendent such engineer or supervisor may also carry outthe duties of the Contractor's representative specified in clause 19.1.

20. CONTRACTOR'S EMPLOYEES

20.1 The Contractor shall employ on the Works only persons who are careful, skilledand experienced in their respective trades, and the Contractor if so directed shallpromptly remove any person where the Superintendent reasonably considers anyperson employed by the Contractor on the Works has misconducted himself or isincompetent or negligent in the performance of his duties or whose employment isotherwise considered by the Superintendent to be undesirable, without having tostate any particular reason therefor. Such a person shall not be again employed onthe Works without the permission of the Superintendent. Any person so removedfrom the Works shall be promptly replaced by the Contractor with a personsatisfactory to the Company at the Contractor's cost.

20.2 The Contractor upon the Superintendent’s instructions, shall promptly provideparticulars of any person employed in and about the execution of the Works. Inparticular the Contractor shall employ full time on the Works an adequate numberof skilled supervisors, experienced tradesmen and labourers. The Company maytrade test any of the Contractor's tradesmen prior to their being employed on theWorks or at any time thereafter during the Contract Period or extension thereof.

20.3 The Contractor, prior to commencement of the Works, shall submit details of thetradesmen it proposes employing for evaluation and approval by the Company. The approved Contractor's personnel shall not thereafter be removed from theWorks without the prior consent of the Superintendent's Representative.

20.4 The Contractor shall ensure that its manpower is under its direct sponsorship, isadequate for the execution of the Works and is and will remain available under itssponsorship throughout the Contract Period.

20.5 The Superintendent may suspend the Works in the event that adequate supervisionis not provided by the Contractor, in which event the Contractor shall not beentitled to make any claim for any consequent additional costs or lost timeincluding delay costs.

20. CONTRACTOR'S EMPLOYEES (CONT’D.)

20.6 The Contractor shall keep complete and detailed records of the names andcategories or trade of all workmen employed from time to time by the Contractor,including time sheets stating the hours worked by them, and wages paid to themin connection with the execution of the Contract and such records shall be madeavailable to the Superintendent for inspection on his direction.

20.7 The Contractor shall not employ any person who has resigned or been dischargedfrom the Company, or from other contractors hired by the Company, or theirSub-contractors, without a written release from such employers or until a periodof not less than twenty-six (26) weeks has elapsed since the person's last workingday on the staff of such organisation.

20.8 The Contractor shall ensure that its Sub-contractors comply with the terms of thisclause and clause 22 in respect of such Sub-contractor's personnel.

20.9 The Contractor shall make its own arrangements for accommodation and mealsfor its personnel, on and off-Site where necessary, the cost of which shall bedeemed included in the Contract Price.

21. SETTING OUT

21.1 The Contractor shall be responsible for the accurate and proper setting out of theWorks and for the correctness of all positions, levels, dimensions and alignmentof all parts of the Works and shall provide all instruments, templates, profiles andlabour in connection therewith.

21.2 If at any time during the Contract Period any error appears or arises in theposition, levels, dimensions or alignment of any part of the Works the Contractor,on being directed to do so by the Superintendent or the Superintendent’sRepresentative, shall, at its expense, promptly rectify each error to the satisfactionof the Superintendent or the Superintendent’s Representative, unless such errorwas due to incorrect Drawings or data supplied in writing by the Company whichcould not have been reasonably detected by the Contractor, in which case thereasonable rectification costs shall be borne by the Company.

22. SAFETY

22.1 The Contractor shall ensure that the Works are carried out in accordance with therules of safety provided by Kuwaiti law and with safe working practices. TheContractor shall comply strictly with the Company's Fire and Safety Regulationsand shall provide and maintain at all times until the issuance of the Certificate ofCompletion and during the progress of the Works adequate guards to safeguardthe Works and all materials on Site.

22. SAFETY (CONT’D.)

22.2 The Contractor shall be deemed to have familiarised itself with the Company’sFire and Safety Regulations before entering into the Contract and shall at thecommencement of the Works ensure its personnel are fully familiar with the Company’s Fire and Safety Regulations relevant to the Works.

22.3 A copy of the Company’s Fire and Safety Regulations shall be loaned by theCompany to the Contractor, which the Contractor shall return to the Company ontermination of the Contract or the issue of the Final Acceptance Certificate(whichever first occurs).

22.4 The Superintendent or the Superintendent’s Representative may test at any timeany item of the Contractor’s Constructional Plant, notwithstanding the provisionsof clause 32.3. The Contractor shall remove and replace at its expense any item ofConstructional Plant which, in the opinion of the Superintendent or theSuperintendent’s Representative, is unsafe.

22.5 The Contractor shall provide all necessary safety clothing and equipment for itsworkmen and all other similar requirements including competent watchmen,adequate and appropriate lighting, fire extinguishers, red lamps during hours ofdarkness and in confined spaces and adequate protection for the public and otherpersons including road signs, notices, barricades and other protections, the costsof which shall be deemed included in the Contract Price.

22.6 The Superintendent or the Superintendent’s Representative or any Company safetyofficer or Company operator in charge at the Site may order the cessation of anywork which in his sole opinion he reasonably considers is not being carried out inaccordance with safe working practices. Work so suspended shall not be resumeduntil the Contractor has satisfied the Superintendent or the Superintendent’sRepresentative to the adequacy of the safety precautions employed. No claim bythe Contractor for extra expense or lost time shall be valid where such claim arisesout of any reasonable order to cease work for reasons of safety, or out of anyreasonable requirement to take adequate safety measures having regard to thecircumstances of the Works.

22.7 The Superintendent or the Superintendent’s Representative where necessary, shallobtain and issue to the Contractor Work Permits bearing the name of theContractor's representative for the execution of specific work. In cases where theContractor's representative has been notified of the necessity for a Work Permit orprocedures to be followed in any work, the Contractor shall ensure that no suchwork is carried out without a current Work Permit or without the Contractor'srepresentative named on such Work Permit being in continuous attendance.


22.8 The Company will use its reasonable endeavours to ensure that a continuous WorkPermit for the maximum period allowable under the Company’s Fire and SafetyRegulations is issued.

22.9 The Contractor shall be deemed to have made allowance in the Contract Price forreasonable delays due to stoppages of work occurring as a result of safetyrequirements.

22.10 The Contractor shall be entitled to an extension of time to the Date forCompletion by one working day, where work is suspended for reasons of safetyby the Company for a period exceeding four hours on any day provided that thesuspension was not due to any act or omission by the Contractor.

22.11 The Contractor shall safeguard all buried or exposed pipelines, cables and otherinstallations and shall take all steps to acquaint itself with the line, levels andpositions of all such installations before commencing any work. In particular, theContractor shall ensure that any compacting effort applied over or close to suchinstallations shall not endanger them in any way. If deemed necessary by theSuperintendent's Representative only hand compaction will be employed. Wherenecessary, the Contractor shall install suitable protective barriers for safeguardingexisting installations.

22.12 The Contractor, before commencing any hot work, shall obtain from theSuperintendent's Representative a permit stating that the area in which the hotwork is to be carried out is gas free. The Contractor shall not commence any hotwork without the requisite permit having been issued.

22.13 The Contractor shall not use oxy-acetylene cutting gear or welding tools on theWorks unless it has obtained prior permission in writing from theSuperintendent's Representative.

22.14 The Contractor without prejudice to the generality of clause 22.1, shall complywith SECTION 8 - of the Company's Fire and Safety Regulations -"DOCUMENTARY CONTROL OF HAZARDOUS WORK AND WORKPERMITS".

22.15 The Company through the Company’s supervisor responsible for supervising theWorks shall issue each Work Permit other than the foregoing referred to in clause 22.12, which are necessary for the Works, and these shall becountersigned by such supervisor and distributed in accordance with theinstructions on the Work Permit.


22.16 The Contractor acknowledges and is placed on notice that unexplodedordnance disposal within the confines of the Site, together with thedesignated access roads, designated areas for the Contractor's office, lay-down areas and other temporary facilities has been performed on behalf ofthe Company by professional ordnance disposal contractors using visualand/or mechanical means.

22.17 The Contractor further acknowledges and is placed on notice that due tosand coverage and possible re-introduction of explosive ordnance due towinds and subsequent movement of sand, undetected explosive ordnancemay be within the Site and other designated areas and/or be reintroducedinto such areas and that there are potential dangers concerning the discoveryof and making safe such newly discovered items of explosive ordnance.

22.18 Whilst the Company has taken reasonable precautionary measures to ensurethat the Site and surrounding areas are free from unexploded ordnance, theContractor shall exercise extreme care during the execution of the Works,and at all times be vigilant, exhorting his personnel to take extreme care asto the dangers of explosive ordnance during the execution of the Works.

22.19 The Contractor shall include as part of its personnel orientation programmefor the Works, an unexploded ordnance recognition, precautions and actionupon discovery programme, such programme shall be:

22.19.1 mandatory for all employees, including, but not limited to hisSub-contractor's employees;

22.19.2 conducted prior to the performance of the Works and to theemployment of any person upon the Works; and

22.19.3 conducted in the native language(s) of the personnelparticipating in the orientation programme and subsequently tobe employed on the Works.

22.20 The Contractor shall include the unexploded ordnance recognition,precautions and action upon discovery programme, together with all otherprocedures and the like pertaining to explosive ordnance within his safetyplan for the Works.


22.21 In the event that the Contractor discovers unexploded ordnance, theContractor shall immediately implement the necessary safety procedures tosecure the area and shall immediately notify the Superintendent, who shalleffect the disposal of the unexploded ordnance.

22.22 Should the Contractor require for the purpose of the execution and completionof the Works, or otherwise be required by the Superintendent, to utilise areasnot ascertained by the Contractor as being cleared of unexploded ordnance,the Contractor shall immediately notify the Superintendent that clearance ofthe concerned area is necessary.

22.23 Under no circumstances whatsoever shall the Contractor utilise any area of theSite, designated access roads, designated areas for the Contractor's offices,lay-down areas and other temporary facilities that have not been declaredcleared of unexploded ordnance.

22.24 Where the Contractor encounters delay to the regular progress of the Worksdue to the discovery of unexploded ordnance, then the Date for Completionshall be extended by one (1) day for each day's delay so incurred, providedalways that in the reasonable opinion of the Superintendent's Representative,the Contractor has used his best endeavours to avoid or otherwise mitigatesuch delay.

22.25 Notwithstanding any entitlement of the Contractor to an extension of time asprovided for in clause 22.24, the Contractor shall be deemed to have madeallowance for the delay costs in the Contract Price and under no circumstanceswhatsoever shall the Contractor be entitled to reimbursement of delay costs.

23. IDENTIFICATION AND PASSES

23.1 The Contractor shall provide each of its employees with an identification badge orcard showing the Contractor's name, and the name, registration number and arecent photograph of the employee.

23.2 The Contractor shall apply for passes within the time specified in the ContractSpecification to enable the Works to proceed without delay. The Company shallissue passes for entry into restricted work areas subject to the Contractor applyingfor them on prescribed forms attached to the Contract Specification with allrelevant particulars and producing evidence of sponsorship of all manpower andvehicles to be employed on the Works.

23.3 The Company may not issue passes to personnel not sponsored by the Contractorand the Contractor shall not be entitled to claim for any resultant delays or costs.

23. IDENTIFICATION AND PASSES (CONT’D.)

23.4 The Contractor shall be responsible for obtaining any other passes from the StateAuthorities necessary for the execution of the Works.

23.5 The Contractor's vehicles and equipment shall be permitted into restricted workareas only after the Contractor has obtained "Restricted Area Passes" for theoperators and drivers and "Work Permit with Entry" for the relevant vehicles orequipment.

23.6 The Company's operational areas shall be considered restricted areas.

23.7 The Contractor shall ensure that all Contractor's personnel shall carry with themat all times whilst engaged at the Site, their Contractor's identification badge orcard, their restricted area pass and Work Permit together with any other passes asmay be required from time to time by the State authorities.

23.8 With reference to clauses 23.2 and 23.5 all applications for restricted area passesfor use by Sub-contractors shall be forwarded to the Superintendent through theContractor.

23.9 The Contractor shall ensure that all passes issued to it and its Sub-contractors orVendors are promptly returned to the Superintendent upon their expiry and oncompletion (or earlier termination) of the Works or at the time of dismissal of anyworkmen.

24. THE SITE

24.1 The Contractor shall be fully responsible for the care of the Site, the Works andall Temporary Works, and in the event of any damage, loss or injury arising fromany cause, the Contractor, as a condition precedent to the issue of the Certificateof Completion, shall make same good at its own cost and ensure that the Site andthe Works are in good order and condition and in conformity with therequirements of the Contract.

24.2 The Company may where it considers necessary, as stipulated in the ContractSpecification, allocate an area adjacent to the Site on which the Contractor shallprovide temporary offices and stores for materials, plant and equipment and thesaid area so allocated shall only be used for such designated purposes.

24.3 The Contractor shall provide and erect a suitable temporary Site office completewith acceptable sanitary facilities as stipulated in the Contract Specification, and inwhich event one of the rooms in the Site office shall be furnished and air-conditioned and be for the sole use of the Company's supervisory personnel.

24. THE SITE (CONT’D.)

24.4 The Contractor shall provide and erect temporary galvanised sheet fences aroundthe temporary offices and storage area and shall provide all electricity, water andall necessary utilities from its resources

24.5 The Contractor shall provide for the Site office one (1) Company-approved 25lbs. DPC fire extinguisher. The Contractor shall upon completion of the Works,clear away all temporary facilities installed by it and leave the area clean and tidy.

24.6 The Contractor shall utilise the area allocated to it by the Company for the storageof materials provided by the Company to provide adequate protection from theweather for materials supplied by the Company or by the Contractor forperformance of the Works and shall ensure that such materials are stored orstacked in an orderly manner and are readily available for checking by theSuperintendent's Representative when directed.

24.7 The Contractor shall provide and erect at the Site a temporary signboard to theCompany's requirements as detailed in the Technical Specification to theContract. Upon completion of the Works the said signboard shall be removedfrom the Site by the Contractor before the issue of the Certificate of Completion.

24.8 The Contractor, during the execution of the Works, shall regularly clear away andremove from the Site all rubbish and surplus materials as they arise in accordancewith the instructions issued from time to time by the Superintendent. Oncompletion of the Works, the Contractor shall clear away and remove from theSite all surplus material, Constructional Plant, rubbish and Temporary Works ofevery kind and leave the entire Site and Works clean and in a workmanlikecondition to the reasonable satisfaction of the Superintendent.

24.9 The Company, if the Contractor fails to comply with the preceding clauses 24.5,24.7 and 24.8, may have any rubbish and surplus materials cleared away anddeduct all costs and expenses so incurred from any monies due or which maybecome due to the Contractor or recover the same as a debt from the Contractor.

25. POSSESSION OF THE SITE

25.1 The Company from the Date for Commencement shall give the Contractorpossession of so much of the Site as may reasonably be required to enable theContractor to commence and proceed with the performance of the Works subjectto the Contractor's employees carrying all necessary valid permits and passes. TheContractor shall ensure that its personnel use only such areas of the Site as arespecifically required for the Works.

25. POSSESSION OF THE SITE

25.2 The Superintendent and any person authorised by him shall at all times haveaccess to the Works and to the Site and to all places where the Works are beingperformed.

25.3 The access to and possession of the Site shall not be exclusive to the Contractorbut shall be such as only to enable it to execute the Works. The Contractor shallin accordance with the directions of the Superintendent afford every reasonablefacility (including free access) for any other Company contractors (whose namesshall be communicated in writing to the Contractor by the Company from time totime) and their workmen and any other persons employed by the Company on ornear the Site.

25.4 The Contractor, without prejudice to the provisions of clause 25.3, shall ensurethat no person other than the Contractor, Company approved Sub-contractors andtheir employees are allowed on Site without the prior written consent of theSuperintendent.

25.5 The Contractor shall ensure that its method of construction permit freeunrestricted access to the Site at all times for the Company’s personnel. TheContractor shall upon the reasonable request of the Superintendent’sRepresentative, give priority and access over its own on-Site activities, to that ofthe Company’s.

26. INDEMNITIES

26.1 The Contractor shall be liable for, and shall indemnify and keep indemnified theCompany against all claims, demands, proceedings, damages, costs, charges andexpenses whatsoever in respect of death, injury or damage to any person orproperty (including any Company employees or other representatives of theCompany and any property of the Company) whatsoever which may arise out ofor as a consequence of the performance of the Works irrespective of thenegligence of either party.

26.2 The Contractor shall be liable for, and shall indemnify and keep indemnified theCompany against, all losses and claims for injury or death to any workman orother person in the employment of the Contractor or its sub-contractors, and alllosses and claims for damage to Contractor's or its Sub-contractors' propertywhich may arise out of or as a consequence of the performance of the Worksirrespective of the negligence of either party.

26. INDEMNITIES (CONT’D.)

26.3 Neither the Contractor nor the Company shall be liable for loss of use oranticipated profits or other consequential or indirect loss or damage, arising fromany cause whatsoever and the parties hereto shall indemnify and keep indemnifiedeach other against all losses, damages and claims therefor.

26.4 The Contractor's liability shall not exceed the limits of insurance required to bemaintained by the Contractor and the Contractor shall have no responsibility orliability to the Company or third parties beyond such limits, all of which excessliability is expressly assumed by the Company and the Company shall indemnifyand keep indemnified the Contractor against all causes of action and liability inexcess of the limits of insurance to be maintained by the Contractor provided thatsuch liability is not as a result of the Contractor's and/or its Sub-contractors'negligence or wilful misconduct.

26.5 Without prejudice to clause 26.4, the indemnities specified in this clause 26 aregiven by the parties regardless of the cause of injuries, death, loss or damage andregardless of whose liability the injuries, deaths, losses, damage and claims mightotherwise be.

27. INSURANCE OF THE WORKS

27.1 The Contractor shall effect insurance in the joint names of the Company and theContractor and its Sub-contractors (if any), with the Company being named as theprinciple, against all loss or damage for which it is responsible under the Contractand in such manner that the Company and the Contractor are covered during theContract Period.

27.2 The Contractor shall effect and maintain an Erection All Risks Policy, with thelimits as specified in the Contract Specification, in respect of the interest of theCompany and the Contractor covering:

27.2.1 physical loss or damage for the full value of the Contract Price(replacement cost basis), of all Works and Temporary Works, includingall materials and equipment supplied by the Company;

27.2.2 any loss or damage to Company’s property located on, adjacent to orsurrounding the Site;

27.2.3 Constructional Plant and equipment brought on the Site by the Contractorto their full replacement cost.

27. INSURANCE OF THE WORKS (CONT’D.)

27.3 The Contractor shall effect and maintain a General Third Party Liability Policy,covering its liabilities under clause 26.1 and shall name the Company as principal.The cover under this General Third Party Liability Policy shall be up to the limitstipulated in the Contract Specification for any one occurrence, the number ofoccurrences being unlimited. The policy shall include cover for fire and explosionrisks, the use of lifting equipment and damage to underground property.

27.4 The Contractor shall effect and maintain Third Party Motor Vehicle Policy,covering full unlimited liability (including passenger liability) and all otherinsurance required in accordance with Kuwait traffic law, for all vehiclessupplied, used or employed on or in connection with the Works.

27.5 The Contractor shall effect and maintain a Workmen's Compensation Policy andEmployers Liability Policy in accordance with Kuwait labour law covering itsliabilities under clause 26.2.

27.6 The Contractor shall effect and maintain an endorsement to cover passive warrisks injury, death or property damage, in respect of the insurances to be obtainedby it under clauses 27.2.3 and 27.5.

27.7 The Contractor’s obligations under clauses 24 and 26 shall not be limited oreffected by the insurances under this clause 27, and shall be without prejudice tothe provisions of clause 26.4.

27.8 The Contractor shall effect and maintain the insurances stipulated in this clause 27with a Kuwaiti national insurance company and in terms approved by theCompany (which approval shall not be unreasonably withheld) and the Contractorshall, prior to the commencement of the Works and whenever required by theCompany, produce to the Company the policy or policies of insurance and thereceipts of the current premiums.

27.9 The Contractor’s obtained insurance policies to meet the requirements of theContract shall include a waiver of subrogation in favour of the Company in thefollowing terms:

"It is hereby agreed that if any payment is made under the Policy No. expiring on in respect of a claim for an accident and the Insurer isthereupon subrogated to all the Insured's rights of recovery in relation thereto theInsurer shall not exercise any such right against Kuwait Oil Company and/or itsservants, representatives and agents".

27. INSURANCE OF THE WORKS (CONT’D.)

27.10 The Company may on the Contractor’s failure to effect and keep in force theinsurances required under the Contract obtain and keep in force any suchinsurances or not obtained or kept in force by the Contractor and pay any suchpremium as may be necessary for the purpose and from time to time deduct theamount so paid by the Company from any moneys due or which may become dueto the Contractor or recover the same as a debt due from the Contractor under thisContract.

27.11 All insurance policies effected by the Contractor under this clause 27 shall containthe provision that they shall not be amended, deleted or permitted to lapse withoutthe express prior written approval of the Company.

28. TAXES

28.1 The Contractor shall pay all taxes, charges or levies of whatsoever nature payableby the Contractor under Kuwaiti law in respect of or in connection with thisContract, including income or benefit derived from payments received by theContractor, none of which shall be reimbursable by the Company.

28.2 The Contractor shall comply with the provisions of Decree No. 3 for 1955 andany subsequent amendment or re-enactment thereof. The provisions of this clauseshall equally apply to any taxes, charges or levies of whatsoever nature payable bythe Contractor under the law of any other country in respect of or in connectionwith this Contract.

28.3 The Company shall withhold the last payment due to the Contractor under theContract notwithstanding any provision of the Contract to the contrary, pendingthe submission by the Contractor of a valid certificate from the Income TaxControl Office of Kuwait to the effect that the Contractor has discharged its taxliability.

29. COMPLIANCE WITH STATE REGULATIONS

29.1 The Contractor shall comply insofar as applicable, with all relevant laws, rulesand regulations of the State of Kuwait regarding any matter affecting the Contractand shall indemnify the Company against all penalties and liability of every kindfor breach by it of any such laws, rules and regulations.

29.2 The Contractor, without prejudice to the generality of clause 29.1, shall bedeemed to have acquainted itself and shall comply with the following:

29. COMPLIANCE WITH STATE REGULATIONS (CONT’D.)

29.2 (Cont’d.)

29.2.1 Article 114 of Law No. 61/76 concerning Social Security;

29.2.2 Order No. 77 of 1984 (Ministry of Social Affairs and Labour) concerningthe Issue of Work Permits to Non-Kuwaiti Workers in the Private Sector;

29.2.3 Law No. 18/1978 concerning the Rules of Safety and the Protection ofPublic Utilities and Resources;

29.2.4 Orders of the Council of Ministers No. 7.3/85 and 28/86 concerning theProtection of Local Industrial Products and concerning the Protection ofLocal Industry respectively;

29.2.5 Article 33 of Labour Law No. 38/64 and Order No. 104 of 1994(Ministry of Social Affairs and Labour) regarding working hours andovertime of the personnel employed by the Contractor; and

29.2.6 Law No. 45/1978 concerning the protection of environment.

29.3 The Contractor’s failure to provide adequate manpower for the performance ofthe Works for any reason including its non-compliance with all or any of the laws,rules and regulations (including Ministerial Orders) practices and procedurespertaining to the recruitment of local and foreign labour will not entitle theContractor to an extension of time, postponement of the Date for Commencementor an extension of the Date for Completion.

29.4 The Contractor shall comply with the Kuwait import and customs rules andregulations applicable to the shipment and import of goods or any part thereof intoKuwait.

29.5 The Contractor shall be responsible for all necessary documentation required forcustoms clearance and materials, equipment, construction equipment, spare parts,and the like. The Company shall issue the necessary certification required toassist the Contractor for customs clearance purposes.

29.6 The Contractor shall be responsible for and shall bear all costs of customs andimport duties, port handling charges, transportation, delivery and the like of allmaterials and equipment to/from and at the Site.

29. COMPLIANCE WITH STATE REGULATIONS (CONT’D.)

29.7 The Company shall withhold the release of the Performance Bond to theContractor in the event that the Company assists the Contractor in obtaining NoObjection Certificates for Non-Kuwaiti employees in the performance of theWorks, pending the submission by the Contractor of a valid certificate from theMinistry of Social Affairs and Labour to the effect that the Contractor has satisfiedthe requirements of the said Ministry in respect of its workforce on completion ofthe Contract.

29.8 The Company shall reimburse to the Contractor all such reasonable direct costsactually incurred, in the event that, subsequent to the date of the Contract, anylaw, rule or regulation (including Ministerial Order) comes into effect whichcauses an increase in the Contractor's cost in the performance of the Works orcauses delay in such performance, and grant an extension of the Date forCompletion equal to the actual delay caused by such new law, rule or regulation,provided that the Contractor submits for the Company's approval sufficientevidence to the effect that the Contractor had taken the proper immediate steps tomitigate the effect of such law, rule or regulation together with a breakdown ofthe claimed additional cost and/or time based on the Contract Price and Date forCompletion to the extent possible and in accordance with clause 60.

29.9 The Contractor shall not be entitled to reimbursement of any losses incurred by itas a result of change to any law during the period of delay where the Contractorfails to complete the Works by the Date for Completion where such delay is dueto its acts or omissions.

29.10 The Contractor shall comply with Law No. 25/1996 relating to declaration ofcommissions in connection with State contracts, and where such law is applicableor becomes applicable to this Contract, the Contractor shall serve on theSuperintendent within the time limit specified by such law a declaration in theformat set out in an Attachment to the Form of Tender.

30. SANITARY ARRANGEMENTS

The Contractor shall provide at Site all requisite sanitary arrangements at his ownexpense in accordance with the applicable Municipal regulations and theCompany's Public Health Code which shall be made available to the Contractoron its request. If the Contractor fails to provide adequate sanitary arrangementsthe Company may provide and maintain such arrangements and charge theContractor all such costs incurred.

31. SUPPLY OF WATER

31.1 The Contractor, at all times during the Contract Period, shall provide all drinking(potable) water at the Site, the cost of which shall be deemed included in theContract Price.

31.2 The Company shall supply water for the Works subject to the following:

31.2.1 water for the Works (i.e. other than potable water) may be obtained by theContractor free of charge (avoidable waste excepted) from the Company'swater tanker loading points but shall be conveyed at the Contractor'sexpense to the place where used;

31.2.2 for Works to be executed in North Kuwait, only brackish water may be soobtainable without guarantee of availability;

31.2.3 the Contractor shall ensure that there is no undue or wasteful use of waterduring the progress of the Works;

31.2.4 the Contractor shall be responsible for providing at its expense allnecessary pipework fittings, hoses and storage.

32. SUPPLY OF LABOUR AND CONSTRUCTIONAL PLANT

32.1 The Contractor shall provide all labour (including supervision thereof) transport toand from the Site and in and about the Works including all Constructional Plant,required for the performance of the Works and Temporary Works, the cost ofwhich shall be deemed included in the Contract Price except where otherwisespecified in the Contract.

32.2 The Contractor’s provided Constructional Plant shall, when brought on to theSite, be considered the property of the Company and shall be deemed to beexclusively intended for the execution of the Works, and the Contractor shall notremove any part of these, without the consent, in writing, of the Superintendent,(which consent shall not be unreasonably withheld).

32.3 The Contractor shall submit immediately after the signing of the Contract andthereafter during the Contract Period to the Superintendent’s Representative forinspection and approval all Constructional Plant in respect of its condition andsuitability for its proposed use, and shall maintain the Constructional Plan in goodorder and condition throughout the Contract Period.

32. SUPPLY OF LABOUR AND CONSTRUCTIONAL PLANT (CONT’D.)

32.4 The Contractor, prior to commencing the Works, shall cause its lifting equipmentto be inspected, tested and certified by and in accordance with the regulations ofLloyd’s Register of Shipping or an equivalent approved classification society, thecost of which shall be deemed included in the Contract Price. The Contractorshall ensure that its lifting equipment is used within the limits specified in therelevant certificate.

32.5 The Contractor shall produce the classification society's certificates for its liftingequipment for inspection of the Superintendent's Representative prior tocommencing the Works and, if so directed by the Superintendent during theContract Period. The Contractor acknowledges that certification by aclassification society agent shall not be accepted, and that lifting equipment nothaving a valid Lloyd’s or equivalent approved classification society certificateshall not be allowed on Site.

33. TRANSPORTATION AND CARRIAGE PRIORITIES

33.1 The Contractor shall use Kuwait Airways Corporation (herein "KAC") or therespective national airline of the country of such employees, agents orrepresentatives or the country exporting the goods in the event air travel ofContractor's employees, agents and representatives, or air freight of goods, isrequired or becomes necessary for the performance of the Contractor's obligationsunder the Contract. Where flights of either KAC or the national airline are notavailable or fully booked, the Contractor shall cause carriage arrangements to beundertaken and documented by KAC.

33.2 The Contractor shall cause the sea carriage of any materials or equipment requiredfor the Works to be undertaken by the Kuwait Oil Tanker Company or by theUnited Arab Shipping Company if the ships of either company are available at theexporting port, provided that the freight rates offered by these companies arecompetitive with those offered by others for the carriage of similar goods toKuwait and that carriage by the said companies will not result in a delay to theprogress of the Works.

34. CARE OF ROADS, OVERHEAD CABLES AND PROPERTY

34.1 The Contractor shall use every reasonable means to prevent any of the roads,tracks, pipe crossings or bridges of the Company, the State or otherscommunicating with, or on, the routes to the Site from being damaged, and trafficon adjoining properties from being unnecessarily or improperly interfered with byany traffic of the Contractor or any of its Sub-contractors and in particular shalluse routes, vehicles and distributed loadings to ensure no damage or injury isoccasioned to such roads, tracks, pipe crossings bridges and any Company, Stateor others property.

34. CARE OF ROADS, OVERHEAD CABLES AND PROPERTY (CONT’D.)

34.2 Where the nature of the Works requires the Contractor to use waterbornetransport, the provisions of clause 34.1 shall be construed as though "roads" and"tracks" included a pier, jetty, quay wall or other structure related to a waterwayand "vehicle" included craft, and shall have effect accordingly.

34.3 The Contractor shall ensure that Constructional Plant in transit to and from theSite or otherwise utilised on the Works does not damage roadside fixtures andoverhead cables and their supports. The Contractor shall make good in the eventit damages any property including the facilities and services referred to in thisclause 34. The Company may however, at its discretion make good any damagecaused by the Contractor, by using other contractors or the Company’s ownresources and in such case all costs of repairs shall be payable by the Contractor, and in case of failure the Company shall recover from the Contractor as a debt ormay deduct from any moneys due or which may become due to the Contractorunder the Contract or any other contract between the parties.

35. MATERIALS SUPPLIED BY CONTRACTOR

35.1 The Contractor shall ensure that materials, equipment, plant or machinerysupplied by it for incorporation into the Works are of the specification describedin the Contract and, where not particularly specified, of good quality and fit inevery respect for the use intended. Prior to ordering materials, equipment, plantor machinery for incorporation into the Works, the Contractor shall submit, to theSuperintendent, for approval, full technical details, including all relevantcatalogues and the country of origin of all materials, equipment, plant ormachinery and their components, accessories and the like, and the name of theproposed manufacturers and or Vendors. Where samples are required to besubmitted to the Superintendent or the Superintendent’s Representative, they shallbe equal in all respects to the samples earlier submitted to and approved by theSuperintendent.

35.2 The Contractor supplied materials shall, wherever possible, be of Kuwaitimanufacture subject to such materials conforming to the relevant Kuwait StandardSpecifications and standards normally acceptable to the Company, in accordancewith clause 29.2.4.

35.3 The Contractor shall supply all consumable materials required for the performanceof the Works, the cost of which shall be deemed included in the Contract Price.

36. MATERIALS SUPPLIED BY COMPANY

36.1 The Contractor, where the Company is responsible for supplying any materials forincorporation into the Works, shall from time to time, as and when such materialis required, complete and sign the necessary requisition form as provided by theCompany, which shall be checked, registered and countersigned by theSuperintendent's Representative before presentation to the Company for issue ofsuch material. The Contractor shall requisition such material at the earliestpracticable opportunity after commencement of the Works and in all cases shall beresponsible for giving adequate notice to the Company of its materialrequirements.

36.2 The Company issued quantities of materials shall be inclusive of a reasonablewaste content. In the event that the Contractor requires additional quantities ofsuch material due to excessive wastage resulting from bad workmanship, loss ordamage, the Contractor shall be responsible for obtaining such additional materialsand any delay arising therefrom. In the event the Company supplies additionalmaterials under this clause, the Company will debit the Contractor's account withthe full replacement cost to the Company and a ten per cent (10%) administrationsurcharge.

36.3 The Contractor shall carry out all normal cutting, adapting, normal cleaning andpreparation of all materials supplied by the Company prior to their incorporationinto the Works, the cost of which shall be deemed included in the Contract Price.In the event that such materials at the time of issue by the Company cannot byreason of their condition be incorporated into the Works until abnormalmodifications, straightening or cleaning have been carried out, the Contractorshall immediately notify such condition to the Superintendent or theSuperintendent’s Representative who shall authorise such remedial work as hemay consider necessary to be carried out at the expense of the Company. Thisshall in no way relieve the Contractor of its responsibilities under clause 38.

36.4 The Contractor shall provide all labour, transportation and, subject to clause 36.5,cranage necessary to ensure all materials or equipment supplied by the Companyfor incorporation into the Works are collected by the Contractor from theCompany’s Stores and/or Workshops, loaded, transported to, and off-loaded atthe Site, the costs of which shall be deemed included in the Contract Price.

36.5 The Company shall provide at all reasonable times all available Company ownedcranage to facilitate loading and offloading all materials or equipment beingcollected or delivered by the Contractor at the Company's Stores and/orWorkshops.

36. MATERIALS SUPPLIED BY COMPANY (CONT’D.)

36.6 The Contractor shall promptly return all materials or equipment supplied or paidfor by the Company for incorporation into the Works which are usable andbecome surplus to requirements during the progress of, or upon completion of theWorks, to the place of issue or as otherwise directed by the Superintendent. Priorto its return or delivery such material or equipment shall be examined and verifiedby the Company at its Stores Receiving Section to judge its authenticity.

36.7 The Contractor shall obtain receipts from the Company's storekeeper at the placeof delivery, in respect of all materials or equipment returned under this clause 36.

37. REMOVAL OF WATER AND SAND

The Contractor shall promptly remove all water and sand which accumulates onthe Site or in the trenches and excavations during the Contract Period due toweather or other causes and in respect of which it shall not be entitled to claimany costs, including delay costs.

38. PROPERTY IN MATERIALS AND EQUIPMENT

The Contractor shall not remove from the Site or the storage area referred to inclause 24 any materials and equipment supplied for the Works or paid for by theCompany nor any surplus materials and equipment not incorporated into theWorks without the prior consent in writing of the Superintendent or of theSuperintendent’s Representative, and such materials and equipment shall remainthe property of the Company and shall be handled, transported and delivered bythe Contractor as directed by the Superintendent or the Superintendent’sRepresentative (the cost of which shall be deemed included in the Contract Price).The Contractor shall promptly replace at its own expense any such material orequipment which is lost, stolen or damaged from any cause whatsoever during theContract Period.

39. TESTING, COMMISSIONING AND EXAMINATION OF WORKBEFORE COVERING UP

39.1 When the Contractor considers that the Works are ready for testing andcommissioning it shall notify the Superintendent in writing and both parties shallagree a date on which testing shall commence. The Contractor shall ensure priorto the commencement of testing, that the necessary test equipment are ready toenable uninterrupted testing of the Works.

39. TESTING, COMMISSIONING AND EXAMINATION OF WORKBEFORE COVERING UP (CONT’D.)

39.2 Procedures for the testing of the Works shall be presented by the Contractor inwriting and approved by the Superintendent before testing starts.

39.3 The Contractor shall provide adequate supervision at all times during the tests andshall be responsible for the safe and proper operation of the testing andcommissioning work during that period.

39.4 The Contractor shall ensure that all testing and commissioning shall be carried outin the presence of the Superintendent’s Representative.

39.5 The Contractor shall promptly rectify at its cost any fault found during the testing.

39.6 All test results shall be submitted by the Contractor to the Superintendent’sRepresentative for approval before commissioning the Works.

39.7 The Contractor shall not cover up or put out of view any work without theapproval of the Superintendent or the Superintendent’s Representative and shallserve on the Superintendent a notice of its intention to cover up, in order to permitthe Company to examine and measure any work which is about to be covered upor put out of view. The Superintendent and the Superintendent’s Representativeshall ensure that their examination and measurement of work is carried out in sucha manner as to avoid unreasonable delay to the progress of the Contractor in itsperformance of the Works.

40. UNCOVERING AND MAKING OPENINGS

The Contractor shall uncover any part of the Works or make openings in orthrough the same as the Superintendent or the Superintendent’s Representativemay, from time to time, direct and shall reinstate and make good such part to thesatisfaction of the Superintendent or the Superintendent’s Representative. If anypart of the Works which has been covered up or put out of view after compliancewith clause 39 and is subsequently directed by the Company to be uncovered andfound to be executed in accordance with the Contract, the costs of uncovering,reinstating and making good shall be borne by the Company, but in all other casessuch costs shall be borne by the Contractor.

41. REMOVAL OF DEFECTIVE OR IMPROPER MATERIALS ANDEQUIPMENT

41.1 The Contractor shall, as and when the Superintendent or the Superintendent’sRepresentative so orders in writing:

41. REMOVAL OF DEFECTIVE OR IMPROPER MATERIALS ANDEQUIPMENT (CONT’D.)

41.1 (Cont’d.)

41.1.1 promptly remove from the Site of any materials or equipment supplied bythe Contractor which are not in accordance with the Contract;

41.1.2 promptly substitute proper and suitable materials or equipment for thoseremoved pursuant to clause 41.1.1; and

41.1.3 promptly remove or re-execute (notwithstanding any interim paymentmade therefor) any work which, in respect of materials or equipmentsupplied by the Contractor or workmanship or design by the Contractorfor which it is responsible, is not in accordance with the Contract.

41.2 The Company, where the Contractor does not comply with any written instructionissued by the Superintendent under clause 41.1 within seven days immediatelyfollowing the date of such instruction, may employ and pay other persons toexecute any work which may be necessary to give effect to such instruction andall costs incurred in connection therewith shall be recoverable from the Contractorby the Company as a debt or may be deducted from any moneys due or whichmay become due to the Contractor under this or any other Contract between theparties hereto without notice or any judicial proceedings.

42. URGENT REPAIRS

The Superintendent, where urgent measures are necessary, may verbally order,and as soon as reasonably practicable thereafter confirm in writing, the Contractorto perform any work which in the opinion of the Superintendent is necessary toavoid the risk of an accident. The Contractor, on receipt of a verbal instructionfrom the Superintendent shall immediately carry out the work as instructed. If theContractor fails to carry out the Superintendent’s orders immediately, theCompany may use its own other resources and personnel to execute suchemergency work. If the work executed by the Company is of the kind that theContractor was liable to perform at its expense, then all costs and expenses soincurred by the Company shall be recoverable from the Contractor as a debtand/or from the Performance Bond and/or any moneys due or which may becomedue to it under this or any other contract between the parties. However, where theContractor although not liable carries out the work it is directed to perform, theCompany shall pay the Contractor for such work at the rates set out in theContract for similar work. In the absence of availability of rates in the Contract,the Contractor shall be paid the reasonable prevailent commercial market ratesagreed between the Superintendent and the Contractor.

43. DATE FOR COMMENCEMENT OF THE WORKS

The Contractor, unless the Contract Specification provides otherwise, shallcommence the Works on the Date for Commencement specified in the writtenorder from the Superintendent to commence and shall proceed to execute theWorks in accordance with this Contract.

44. WORKING HOURS

44.1 The Contractor shall perform the Works at the Site from 0700 hours to 1500hours or such other hours as permitted by the Superintendent subject to amaximum of eight (8) hours Saturday through Thursday except:

44.1.1 during Ramadhan when the working hours, Saturday through Thursdayshall be 0900 hours to 1500 hours; and

44.1.2 on Company holidays as may be declared from time to time when nowork shall be carried out.

44.2 The Contractor shall adhere strictly to the working hours specified in clause 44.1and shall not carry out any work outside these hours without the Superintendent'sprior written permission or direction (save for irregular non-scheduled overtimework the requirement for completion of which is inherent in such work as, byway of example, the finishing of a pour of concrete) and any work so permitted ordirected shall be at no additional expense to the Company.

45. PROGRAMME OF WORK

45.1 The Contractor, within fifteen (15) calendar days from the date of signing theContract (or such other period as stated in the Contract Specification), shallsubmit to the Company a fully detailed programme of work, based upon thepreliminary programme of work submitted by the Contractor attached to the Formof Tender, which shall show the sequence and duration of various phases of theWorks and the manner in which they shall be carried out, the start andcompletion dates of all the major phases of the Works including procurement,shipment, delivery at Site, installation, testing and commissioning, documentsubmission and all other related activities in sufficient detail, a critical pathnetwork showing the duration, sequence and inter-relationship of all activities ofthe Works, including those activities not on the critical path, and as furtherrequired in the Contract Specification.

45. PROGRAMME OF WORK (CONT’D.)

45.2 The programme submitted in accordance with clause 45.1 may be in the form ofbar chart. Once approved by the Superintendent no amendments shall be made tothe Programme without the express prior written approval of the Superintendentor the Superintendent's Representative.

45.3 The Contractor shall submit with its detailed programme of work, a manpowerhistogram for the Works and detail the numerical breakdown of the various tradesand disciplines of the said manpower.

45.4 The Contractor, where the progress of an activity is behind the Programme shallpromptly inform the Superintendent in writing giving detailed reason, andsuggestions to avoid or minimise delay and options for corrective action.

45.5 The Contractor, where the Superintendent reasonably considers that the Worksare not proceeding in accordance with the Programme, shall at its cost provideadditional manpower and equipment or take such other measures as may beapproved or ordered by the Superintendent to ensure completion of the Works bythe Date for Completion. The Programme shall be based on the assumption thatno delays will be caused by the Company's operational requirements other thanthose arising as specified in clauses 22.8 and 22.9.

45.6 The Company may at any time instruct the Contractor to re-schedule or alter thesequence of the Works to suit the Company’s operational requirements. TheContractor shall promptly revise and resubmit the Programme for approval of theSuperintendent and inform the Superintendent of any claim it considers itreasonably has as a consequence of any altered sequence of execution of theWorks. The Contractor, upon receipt of the Superintendent’s written instructionsshall promptly implement the changes to the Programme and proceed diligently tomitigate the effect of the re-scheduling or alteration of the Programme on theoverall progress of the Works.

46. DATE FOR COMPLETION

The Contractor shall complete the Works, excluding the obligations to be carriedout under the Defects Liability Period by the Date for Completion as specified inthe Contract Specification, calculated from the Date for Commencement.

47. CERTIFICATE OF COMPLETION

47.1 The Contractor, when the Works have been completed in accordance with theContract (except in minor respects that do not affect their use for the purpose forwhich they are intended and save for the obligations of the Contractor underclause 48) and the Works have satisfactorily passed any final test that may beprescribed in the Contract, shall apply to the Company for the Certificate ofCompletion. The Superintendent shall, if satisfied that the Works are completeand final testing is satisfactory, issue the Certificate of Completion and theeffective date of such Certificate of Completion shall be the actual date ofcompletion, and from which date the Defects Liability Period shall commence.The issue of the Certificate of Completion shall not be an admission that theWorks have been completed in every respect. The Contractor shall complete withall due diligence any work the subject of an exception to the Certificate ofCompletion.

47.2 The Contractor, as a pre-requisite to the issue of the Certificate of Completion,shall deliver to the Superintendent all available warranties and guarantees frommanufacturers and Vendors of all equipment for incorporation into the Works andif so directed by the Company, shall assist the Company in the enforcement ofwarranty claims.

47.3 The benefit of additional manufacturers and Vendors guarantees and warrantiesrelating to all materials and equipment incorporated in the Works shall accrue tothe Company, and the Contractor shall render the Company every assistance inenforcing such guarantees and warranties as necessary as and when desired to doso by the Company.

48. DEFECTS LIABILITY PERIOD

48.1 The Defects Liability Period shall be 12 months. The Contractor shall make goodand rectify at its expense all defects, omissions or faults that arise or becomeapparent in the Works during the Defects Liability Period, due to defectiveengineering or design or to unsatisfactory workmanship or to the use of theContractor supplied materials or equipment not in accordance with the Contract orto the neglect or failure by the Contractor to comply with any of its obligationsunder the Contract.

48.2 The Contractor, on receipt of written notice from the Superintendent, shall makegood and rectify all defects, omission or faults within a reasonable time asinstructed by the Superintendent. If the Contractor fails to remedy the defectswithin the time instructed by the Superintendent, the Company shall carry outsuch work and shall recover from the Contractor the cost incurred, or may deductthe cost of such works from the Performance Bond or any moneys due or whichmay become due to the Contractor under this or any other contract between theparties.

48. DEFECTS LIABILITY PERIOD (CONT’D.)

48.3 In respect of any part of the Works affected by defects, omissions or faults arisingwithin the Defects Liability Period, a new twelve month Defects Liability Periodin respect of such part of the Works shall commence from the date such defects,omissions or faults are made good and rectified and recorded on a DefectsRectification Certificate or such other Defects Rectification Certificates as the casemay be.

48.4 The Final Acceptance Certificate shall be issued by the Superintendent when theContractor has complied with all of its obligation under clauses 48.1 and 48.3.

48.5 The Company shall make good at its own expense any such defects or faultswhich shall be due to defective material supplied by the Company or any othercause not specified or implied in clause 48.1.

49. VARIATIONS

49.1 The Superintendent may make any Variation to the Works or any part of it thatmay, in his opinion, be necessary and may instruct the Contractor to do any of thefollowing:

49.1.1 increase or decrease the quantity of any work included in the Contractwithin such limits as may be defined by the Company;

49.1.2 omit any such work;

49.1.3 change the character or quality or kind of any such work;

49.1.4 change the levels, lines, position, dimensions of any part of the Works;and

49.1.5 execute additional work of any kind necessary for the completion of theWorks.

49.2 The Contractor shall not execute a Variation, subject only to the terms of clause49.3, without an Adjustment Order signed by both parties which shall specifythe effect (if any) on the Contract Price and/or the Date for Completion. AnAdjustment Order shall in no way affect the rights or obligations of the partiesexcept as expressly provided. All provisions of the Contract shall apply toVariations.

49. VARIATIONS (CONT’D.)

49.3 In the event that any Variation is urgent and the performance of the Workscannot, in the sole opinion of the Superintendent, proceed unimpeded due to timeinvolved in processing an Adjustment Order, the Variation shall be carried out bythe Contractor after receiving an order in writing from the Superintendentspecifying the effect thereof (if any) on the Contract Price and the Date forCompletion as agreed with the Contractor pursuant to clauses 49.4 and 49.5. Theparties, as soon as practicable thereafter, shall sign an Adjustment Order.Variation carried out by the Contractor other than in accordance with this clauseshall be to the Contractor's account.

49.4 Each Variation shall be valued at the rates set out in the Contract if applicable. Ifthe Contract does not contain any rates applicable to a Variation then reasonablerates (having regard to commercial market rates) shall be agreed by theSuperintendent and the Contractor.

49.5 The Superintendent shall grant an extension or deduction of time to the Date forCompletion resulting from a Variation.

50. METHOD OF PAYMENT

50.1 The Contractor shall submit an invoice based upon the physical progress of theWorks (to be measured by using the standard method of measurement appropriateto the Works and in accordance with customary industry practice) with relevantsupporting documents at the end of each appropriate month to the Company'sFinancial Accounts Department claiming payment for work executed inaccordance with the Contract.

50.2 The Company shall make payment of invoices certified as correct by theSuperintendent within 30 days of receipt of such invoice by the Company subjectto clauses 28, 29 and 51 to a Kuwaiti Bank account designated by the Contractor,details of which have been notified to the Company by the Contractor on the dateof signing of the Contract.

51. RETENTION

51.1 The Company shall deduct and retain five per cent (5%) of the Contract Price,unless otherwise stated in the Contract Specification. Such deductions shall bemade from the amounts certified by the Superintendent in accordance with clause50.

51. RETENTION (CONT’D.)

51.2 The Contractor, upon the issue of the Certificate of Completion, shall be paid halfof the aggregate sum retained by operation of this clause 51 and the balance shallbecome due and payable to the Contractor upon the issue of the Final AcceptanceCertificate. The Company may, on the Contractor’s request, release the balanceretention monies prior to the issuance of the Final Acceptance Certificate,provided that the Contractor furnishes the Company with an unconditional bankguarantee in a form approved and acceptable to the Company, for an equivalentamount, valid until the issuance of the Final Acceptance Certificate.

52. PATENTS AND COPYRIGHT

52.1 The Contractor shall indemnify, defend and save harmless the Company from andagainst all liability, claims, suits, actions, losses, costs, damages and expensesbrought against the Company or incurred by the Company as a result of or inconnection with any claims or actions based upon infringement or allegedinfringement of any patent and arising out of the engineering, design, equipment,materials or processes furnished by the Contractor.

52.2 The Contractor shall not make any admission of liability without first informingthe Company.

52.3 The Contractor, in order to avoid any claim or actions, may substitute at itsexpense by non infringing equipment, materials or processes or modify at itsexpense such infringing design, equipment, materials and processes so that theybecome non infringing, provided that such substituted and modified design,equipment, materials and processes meet all the requirements of the Contract andare approved by the Company.

52.4 The copyright in all work which is produced either by or on behalf of theContractor or the Company in connection with the Contract shall be the exclusiveproperty of the Company.

52.5 The provisions of this clause 52 shall survive termination or expiry of theContract.

53. CONFIDENTIALITY

53.1 The Contractor shall hold in confidence and not divulge to third parties or use inany way whatever except, with the prior written approval of the Company, anyinformation disclosed, directly or indirectly, to the Contractor by the Company inregard to the Works, or which is provided by the Company, or is prepared for theCompany by the Contractor, so long as and to the extent that such information isnot in the public domain, or was not, prior to receipt from the Company, alreadyin the possession of the Contractor.

53. CONFIDENTIALITY (CONT’D.)

53.2 The Contractor, under the same secrecy conditions required of the Contractorunder clause 53.1, may disclose to Sub-contractors and Vendors information to be

held in confidence, if necessary for the prosecution of the Works.

53.3 The Contractor shall not make any announcement or release any informationconcerning the Contract or the Works to any member of the public or the mediaor any third party unless prior written consent is obtained from the Company.

53.4 The provisions of this clause 53 shall survive termination or expiry of theContract.

54. SUSPENSION OF WORK

54.1 The Contractor, on the written instruction of the Superintendent, shall suspend theprogress of the Works or part thereof for such time or times and in such manneras the Superintendent may consider necessary and shall during such suspensionproperly protect and secure the Works. All reasonable actual costs unavoidablyincurred by the Contractor in giving effect to the Superintendent's instructionunder this clause and in subsequently recommencing the performance of theWorks shall be payable by the Company unless such suspension is:

54.1.1 by reason of some default on the part of the Contractor; or

54.1.2 is not payable under the Contract;

and provided, that the Contractor gives notice in writing to the Superintendent ofits intention to claim within seven days immediately following the date of theSuperintendent's instruction to suspend the Works. In the event that it appearslikely that any such suspension will exceed seven (7) days, then the Contractorshall promptly submit to the Superintendent for his approval its proposedmeasures for mitigating the costs of such suspension, and upon receipt of suchwritten approval (which shall be given within 48 hours), shall immediatelyimplement the measures.

54.2 Where work is suspended or cannot be carried out at Site for an aggregate periodexceeding four (4) hours on any day due to severe weather conditions,notwithstanding the provisions of clause 59.1, the Contractor shall be entitled toan extension of time of one working day. The Contractor shall not be entitled toany additional costs of whatever nature due to extension of time granted under thisclause 54.2. Any extension of time granted as a result of such suspension shall beformalised by an Adjustment Order.

55. CONTRACTOR'S DEFAULT

55.1 The Company, after giving seven days' advance written notice to the Contractor,may enter the Site and expel the Contractor and terminate the Contract withoutneed for any judicial proceedings, if the Contractor becomes bankrupt, or has areceiving order made against it, or has filed a bankruptcy petition, or makesarrangement with or assignment in favour of its creditors, or agrees to carry outthe Contract under a committee of inspection of its creditors or, being acorporation, has gone into liquidation (other than a voluntary liquidation for thepurposes of amalgamation or reconstruction), or has had an execution levied on itsgoods, or generally, if anything arises to indicate conclusively to the Companythat the Contractor is financially insolvent.

55.2 The Company may give the Contractor written notice in the event of the followingoccurrences calling upon the Contractor to remedy its default within seven days ofreceipt of notice or within such other reasonable period directed by theSuperintendent, failing which the Company may terminate the Contract or part ofthe Works without the need for judicial proceedings:

55.2.1 if the Contractor, without prior written approval of the Company, assignsthe Contract or sub-contracts the Works or any part thereof;

55.2.2 if the Contractor has abandoned the Contract;

55.2.3 if without reasonable excuse the Contractor has failed to commence theWorks or has suspended the progress of the Works;

55.2.4 if the Contractor is slow in executing the Works, has failed to proceedwith the Works with due diligence or so far behind the Programme that inthe reasonable opinion of the Superintendent it is unlikely to complete theWorks by the Date for Completion.

55.2.5 if the Contractor has failed to remove rejected materials from the Site, orto pull down and replace work, which has been rejected by theSuperintendent; or

55.2.6 if the Contractor has not executed the Works in accordance with theContract or has persistently or flagrantly neglected its obligations.

55. CONTRACTOR'S DEFAULT (CONT’D.)

55.3 The Company may in the event it exercises its rights under clause 55.1 or 55.2,complete the Works or employ other contractors to complete the Works and in sodoing the Company or such other contractor may use any of the ConstructionalPlant, Temporary Works, and unused materials (being originally the property ofthe Contractor) as it may think proper and the Company shall not be responsibleto the Contractor or third parties for whatever damage or loss of value suchproperty may sustain or for payment of any amount that may be due to thirdparties thereon or payment of any rents therefor whether to the Contractor or thirdparties, and may at any time sell or attach any or all of the said ConstructionalPlant, Temporary Works, and unused materials and shall hold the proceeds of thesale to the credit of the Contractor or apply them in or towards the satisfaction ofany sums due or which may become due to the Company under the Contract.

55.4 The Contractor, where the Company has incurred any expenses in executing theWorks as result of the Contractor’s fault, shall accept as conclusive evidence thestatements of the Company with respect to the amounts paid and expensesincurred by the Company in executing the Contract and all matters relating to it. Likewise, any contracts concluded between the Company and third parties for thispurpose shall form a basis for settlement.

55.5 Notwithstanding any provision herein to the contrary any amounts due to theCompany under the Contract, including overpayments, liquidated or otherdamages, and expenses, shall be recoverable without notice or judicialproceedings by deduction from the Performance Bond or any moneys due orbecoming due to the Contractor under this or any other contract with theCompany whether or not the Company has exercised its rights of termination inaccordance with this clause 55.

55.6 The rights and remedies of Company provided by this clause 55 are in addition toany other rights and remedies provided by law or under the Contract.

56. CONSEQUENCES OF TERMINATION FOR DEFAULT

56.1 The Contractor, upon termination of this Contract by the Company inaccordance with clause 55, if instructed by the Company and subject to theCompany's rights under clause 55, shall promptly remove from the Site, in asafe and proper manner and with such precautions as shall prevent injury ordamage for which before such termination it was liable under clause 26, allConstructional Plant and Temporary Works supplied by the Contractor.

56. CONSEQUENCES OF TERMINATION FOR DEFAULT (CONT’D.)

56.2 The Company shall be under no liability to the Contractor whatsoever (save forany surplus accruing as a result of the sum certified under clause 56.2.2exceeding the gross amount specified in clause 56.4) and the Contractor'sliability to the Company shall be for an amount calculated as soon as practicableafter termination by the Superintendent who shall measure, calculate and certifythe following:

56.2.1 the amount (if any) which at the time of such termination had beenreasonably earned by the Contractor in respect of work actuallysatisfactorily performed by it under the Contract. This amount,(hereinafter "Sum 'A'"), shall be the gross value of such work lessfive per cent (5%) of such amount, to provide for costs whichotherwise might have arisen pursuant to clause 48;

56.2.2 the outstanding amount (if any) due to the Contractor at the time ofsuch termination which shall be the amount determined by thededuction from Sum A of the amounts already paid to theContractor under the Contract, (hereinafter "Sum 'B'");

56.2.3 the value of the outstanding work under the Contract at the time ofsuch termination which shall be the Contract Price less Sum A,(hereinafter "Sum 'C'").

56.3 Following such termination, as soon as the actual or prospective cost ofcompletion of the Works has been ascertained, the Superintendent shall certify theamount, (hereinafter Sum 'D'").

56.4 The amount (if any) due to the Company by the Contractor shall be the grossamount of the following:

56.4.1 The amount by which Sum D exceeds Sum C;

56.4.2 10% administrative costs on Sum D;

56.4.3 Any other loss or damages suffered by the Company due to theContractor's breach of Contract.

56.4.4 The above amount shall be payable as soon as notified to theContractor by the Superintendent and shall be recoverable as adebt to the Company. Without prejudice to any other method ofrecovery and without the need for judicial proceedings theCompany may recover all or part of such debt by the sale of theContractor's property in accordance with the provisions of clause55.

56. CONSEQUENCES OF TERMINATION FOR DEFAULT (CONT’D.)

56.5 Notwithstanding any provision herein to the contrary, in the event there is a Sum'B', this will be credited to the Contractor after deductions under clause 56.4.

56.6 The parties on termination shall attempt to agree in writing the precise state ofprogress of the Works and on the inventory of Constructional Plant and materialsprovided for incorporation in the Works. If the Contractor fails to present itselfpromptly at termination in order to reach such an agreement or on failure to reachan agreement, the Company shall measure the state of progress and compile suchinventory and such progress and inventory as certified by the Superintendent shallbe binding on the parties.

57. OPTIONAL TERMINATION

57.1 The Company may terminate the Contract or any part of the Works at any time bygiving the Contractor a written notice without cause. Such notice shall specify theeffective date of termination should it be different from the date of the notice andthe Contractor shall cease all work on that date and thereafter shall do only suchwork as may be necessary to preserve and protect the Works, the TemporaryWorks and materials provided for incorporation in the Works until handing overto the Company is effected.

57.2 Upon termination by the Company under clause 57.1, the Contractor shallpromptly remove from the Site, all Constructional Plant and Temporary Workssupplied by it and in the event of any injury or damage caused by such removal,shall be liable in accordance with clause 26.

57.3 The Company upon termination under this clause 57, shall pay to the Contractorin full and final satisfaction of all claims and entitlement of the Contractor arisingout of or in connection with termination of the Contract under this clause 57, aftersubtracting therefrom any amounts already paid by the Company, the amounts ascertified by the Superintendent of:

57.3.1 the Contract value of the Works completed at the date of terminationsubject to clause 49;

57.3.2 the value of work begun and executed but not completed at the date ofsuch termination;

57.3.3 the cost of materials or goods properly ordered for the Works for whichthe Contractor shall have paid or shall be liable to pay provided these arehanded over to the Company and are of a quantity and quality acceptableto the Company;

57. OPTIONAL TERMINATION (CONT’D.)

57.3 (Cont’d.)

57.3.4 the reasonable cost of removal of Constructional Plant and TemporaryWorks; and

57.3.5 the reasonable overhead costs to which the Contractor has committed itselfsolely with respect to the performance of the Contract and which theContractor can demonstrate conclusively are impossible to avoidsubsequent to termination.

58. LIQUIDATED DAMAGES

58.1 The Contractor, where it fails to complete the Works (excluding the obligations tobe carried out under the Defects Liability Period) by the Date for Completion oras extended, shall pay to the Company the sum specified in the ContractSpecification as liquidated damages for such default, and not as a penalty, for eachday of the period which shall elapse between the Date for Completion (as mayhave been extended) and the actual date of completion of the Works as certifiedby the Superintendent.

58.2 The Company, without prejudice to any other method of recovery and without theneed for judicial proceedings, may deduct the amount of liquidated damages fromany moneys in its hands due or which may become due to the Contractor. Noprior notice shall be required for the application of liquidated damages which shallbecome due and payable by the mere event of delay. The payment or deductionof such damages shall not relieve the Contractor from its obligation to completethe Works or from any other of its obligations and liabilities.

58.3 Nothing in this clause 58 shall operate to limit or restrict any other rights andremedies available to the Company in law or under the Contract.

59. FORCE MAJEURE

59.1 Force Majeure shall be any event or occurrence starting after the date of thisContract, whatever the origin, which cannot be foreseen and is beyond the controlof, and cannot be circumvented by, the party affected, and which renders theperformance of the obligation impossible. Force Majeure shall exclude, amongstothers, inclement weather, congestion of orders at a manufacturer's plant, anoversold condition of the market, lack of manpower, lack of material,inefficiencies of the Contractor, its Vendors or Sub-contractors of any tier, orsimilar occurrences.

59. FORCE MAJEURE (CONT’D.)

59.2 Neither party shall be considered in default of its obligations hereunder if theperformance of these obligations is delayed, hindered or prevented by ForceMajeure provided that within seven (7) days after the start of an event oroccurrence claimed as Force Majeure the party affected by Force Majeure givesthe other party written notice of such event or occurrence and that immediate stepsare taken by the affected party to mitigate where possible the effects of the eventor occurrence.

59.3 Should the Contractor be delayed in execution of the Works by an occurrence itbelieves to be Force Majeure and the Contractor cannot avoid or prevent the saiddelay by any means whatever and provided the Contractor has given notice to theCompany as specified in clause 59.2, then the Company, if it agrees, will givenotice to the Contractor confirming the existence of Force Majeure and willauthorise the issue of an Adjustment Order as may be necessary in accordancewith clause 49.5.

59.4 Notwithstanding any provision herein to the contrary, the Contractor shall not beentitled to any additional costs of whatever nature due to extension of time grantedby the Company to the Contractor under this clause 59.

60. LIMITATION ON CLAIMS, DELAY AND EXTENSION OF TIME

60.1 The Contractor shall make all claims against the Company in writing not morethan seven days after the event giving rise to such claim.

60.2 The Contractor shall constantly endeavour to prevent delays to the execution ofthe Works and shall diligently investigate and inform the Superintendent ofpossible methods to overcome potential or actual delays.

60.3 The Contractor, except where expressly permitted under the Contract, shall not beentitled to an extension of time to the Date for Completion in respect of any delayto the progress of the Works.

60.4 The Contractor, immediately upon becoming aware of any likely delay (or thecommencement of any delay) to the Works, shall promptly serve a notice inwriting of the delay on the Superintendent, giving as complete details of the delayas possible with all supporting documents and a reasonable estimate of the delayor likely delay to the progress of the Works.

60.5 The Contractor, where the delay is a delay event entitling it to claim an extensionof time, shall inform the Superintendent in the notice of delay of any extension oftime it considers it is entitled to claim.

60. LIMITATION ON CLAIMS, DELAY AND EXTENSION OF TIME (CONT’D.)

60.6 The Superintendent, as soon as practicable, will issue instruction to the Contractorin respect of the delay.

60.7 The Contractor’s sole entitlement to reimbursement of any delay costs and lossesincurred by it due to delay caused by any act or omission by the Company (butnot for any other delay event), shall be the direct loss the Contractor proves to thesatisfaction of the Company that it has suffered.

60.8 Where there is concurrent delay by both the Company and the Contractor, thepredominant cause of delay, as determined by the Superintendent, shall beregarded as the cause of delay to the progress of the Works.

60.9 It is a condition precedent to the Contractor’s entitlement to an extension of timeand or Company caused delay costs, as the case may be, that it complies with allthe following conditions precedent, namely, the Contractor:

60.9.1 has complied with the time and notice provisions of clauses 60.1, 60.4and 60.5;

60.9.2 can demonstrate by reference to the Programme that the delay event ison the critical path;

60.9.3 has made reasonable attempts to avoid or mitigate the delay (givingdetails);

60.9.4 can reasonably demonstrate that its acts, breach, fault, negligence oromissions were not the cause of any delay event;

60.9.5 can establish to the satisfaction of the Company, that the amountclaimed, is the direct cost and loss the Contractor has suffered as a resultof the Company caused delay.

61. CONTINUANCE OF THE WORKS

The Contractor at all times, notwithstanding any disagreement, dispute, protest orcourt proceedings, relating directly or indirectly to the Works, shall proceed withthe Works in accordance with the determinations, instructions and clarifications ofthe Company. If the Contractor fails to proceed with the Works, it shall beconsidered to be in default. During the period Contractor is proceeding with theWorks it shall be paid the undisputed portion of any claim or payments due underthe Contract as the case may be.

62. GOVERNING LAW

The Contract shall be deemed to have been signed in Kuwait. It shall beconstrued and have effect in all respects in accordance with the laws of the Stateof Kuwait and both the Company and the Contractor agree and accept that theCourts of Kuwait shall have exclusive jurisdiction to decide all disputes betweenthe parties.

63. PERFORMANCE BOND

63.1 The Company, if it considers the Contractor in default or in order to recovermonies due to it, may at any time without prior notice to the Contractor draw onthe Performance Bond.

63.2 The Contractor shall keep the Performance Bond in its full value in the event ofwithdrawal thereon and at the Company’s direction increase the value of thePerformance Bond proportionally with any increase in the Contract Price,resulting from any Adjustment Order.

63.3 The Contractor shall extend the validity of the Performance Bond to correspondwith the end of the Contract Period and until compliance by it of the requirementsof clause 29.7.

64. NOTICES

All notices required by the Contract shall be considered as duly given if in writingand sent by registered mail to the Contractor or the Company at their respectiveoffices as stated in the Memorandum of Agreement or sent by registered mail (orhanded) to their duly authorised representatives. Notices may, also, be given bytelex or fax provided that confirmation of any such notice given is received withinfifteen (15) days of the date of the notice.

65. KUWAITI AGENT

The Contractor where it is not a Kuwaiti shall appoint a Kuwaiti agent in Kuwaitin respect of the Contract, and shall provide the following details of its Kuwaitiagent so appointed as and when required by the Company:

(a) name;(b) address in Kuwait;(c) address of main place of business or office in Kuwait (if different from [ii]

above); and(d) letter from the agent on agent’s letterhead confirming appointment.

KUWAIT OIL COMPANY (K.S.C.)(Register of Commerce No. 21835)

GENERAL CONDITIONS OF CONTRACT- for -ENGINEERING AND CONSTRUCTION CONTRACTS

INDEX

CLAUSE TITLE PAGE

1 DEFINITIONS 1

2 LANGUAGE AND INTERPRETATION 3

3 ENTIRE AGREEMENT 4

4 WAIVER 4

5 INSPECTION 4

6 EXTENT OF CONTRACT 4

7 DOCUMENTS MUTUALLY EXPLANATORY 5

8 INDEPENDENT CONTRACTOR STATUS 5

9 ASSIGNMENT 5

10 SUB-CONTRACTING 5

11 SUPERINTENDENT AND SUPERINTENDENT'SREPRESENTATIVE

6

12 PLANS, DRAWINGS AND SPECIFICATIONS 7

13 FURTHER DRAWINGS AND INSTRUCTIONS 8

14 CONTRACTOR'S DESIGN AND ENGINEERING 8

15 INSPECTION OF THE SITE 9

16 SUFFICIENCY OF CONTRACT PRICE 10

17 CONTRACT PRICE 10

18 WARRANTIES 10

CLAUSE TITLE PAGE

19 CONTRACTOR'S REPRESENTATIVE 11

20 CONTRACTOR'S EMPLOYEES 12

21 SETTING OUT 13

22 SAFETY 13

23 IDENTIFICATION AND PASSES 17

24 THE SITE 18

25 POSSESSION OF THE SITE 19

26 INDEMNITIES 20

27 INSURANCE OF THE WORKS 21

28 TAXES 23

29 COMPLIANCE WITH STATE REGULATIONS 23

30 SANITARY ARRANGEMENTS 25

31 SUPPLY OF WATER 26

32 SUPPLY OF LABOUR AND CONSTRUCTIONALPLANT

26

33 TRANSPORTATION AND CARRIAGE PRIORITIES 27

34 CARE OF ROADS, OVERHEAD CABLES ANDPROPERTY

27

35 MATERIALS SUPPLIED BY CONTRACTOR 28

36 MATERIALS SUPPLIED BY COMPANY 29

37 REMOVAL OF WATER AND SAND 30

38 PROPERTY IN MATERIALS AND EQUIPMENT 30

CLAUSE TITLE PAGE

39 TESTING, COMMISSIONING AND EXAMINATION OFWORK BEFORE COVERING UP

31

40 UNCOVERING AND MAKING OPENINGS 31

41 REMOVAL OF DEFECTIVE OR IMPROPERMATERIALS AND EQUIPMENT

31

42 URGENT REPAIRS 32

43 DATE FOR COMMENCEMENT OF THE WORKS 33

44 WORKING HOURS 33

45 PROGRAMME OF WORK 33

46 DATE FOR COMPLETION 34

47 CERTIFICATE OF COMPLETION 35

48 DEFECTS LIABILITY PERIOD 35

49 VARIATIONS 36

50 METHOD OF PAYMENT 37

51 RETENTION 37

52 PATENTS AND COPYRIGHT 38

53 CONFIDENTIALITY 38

54 SUSPENSION OF WORK 39

55 CONTRACTOR'S DEFAULT 40

56 CONSEQUENCES OF TERMINATION FOR DEFAULT 41

57 OPTIONAL TERMINATION 43

58 LIQUIDATED DAMAGES 44

CLAUSE TITLE PAGE

59 FORCE MAJEURE 44

60 LIMITATION ON CLAIMS, DELAY AND EXTENSIONOF TIME

45

61 CONTINUANCE OF THE WORKS 46

62 GOVERNING LAW 47

63 PERFORMANCE BOND 47

64 NOTICES 47

65 KUWAITI AGENT 47

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Kuwait - GENERAL CONDITIONS OF CONTRACT

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