GENERAL CONDITIONS
(For Off-Shore Supply)
KIOCL-P/2

1.0   DEFINITIONS

As used herein and any Contract documents, the following words shall have the following meanings.

1.1   "OWNER/PURCHASER" shall mean Kudremukh Iron Ore Company Limited, a Government of India Enterprise having its registered Office at II Block, Koramangala, Bangalore, Karnataka,INDIA

1.2   SUPPLIER/CONTRACT shall mean the person, firm or body corporate contracting with OWNER/PURCHASER for the supply to the OWNER/PURCHASE of any equipment, materials, spares/ and / or supplies as per the CONTRACT and shall be deemed to include SUPPLIER’S successors (approved by OWNER) representatives, heirs, executors and administrators, unless otherwise excluded by the CONTRACT.


1.3  SUB-CONTRACTOR shall mean any individual, firm or body corporate contracting directly with the SUPPLIER and not OWNER to finish SUPPLIER with any portion of the work, other than the purchase of “off the shelf” items or Pre-fabricated machinery or supplies. SUPPLIER shall remain fully liable and responsible to the owner for the work so sub-contracted as well as for all acts and / or commissions of SUB-CONTRACTORS.


1.4   CONTRACT shall mean and include the invitation to Tender, Instruction to Tenderers, the Tender, The General Conditions, the specifications, special Conditions, if any, and the acceptance of Tender/ Purchase Order Issued by OWNER all in respect of supply and delivery of the equipment, materials, spares and / or supplies called for by the SPECIFICATIONS and may also include any agreement if and when signed by and between OWNER and SUPPLIER and includes subsequent changes / amendments, if any.


1.5  WORK shall mean and include any and all labour, supervision, service, material, machinery equipment, tools, supplies and facilities required for the supply and delivery by SUPPLIER of the equipment, materials, spares and / or supplies called for by the CONTRACT.


1.6   TENDRER”shall mean the person firm or body corporate submitting a Tender against the invitation to Tender and shall include his/its/their executors, administrators, legal representatives successors and permitted assignees.

1.7   INVITATION TO TENDER”, shall include the SPECIFICATIONS, instructions to tenderers, the General Conditions etc.


1.8   “TENDER” shall mean the formal quotation submitted by a tenderer proposing to perform the work requested in the invitation to Tender issued by OWNER.


1.9.0   PARTICULARS shall mean and include.

1.9.1   Specifications:

1.9.2   Drawings: and

1.9.3   Proprietary mark or designated pattern denoting the product of an individual, firm or body corporate.


1.10   SPECIFICATIONS shall mean and include the schedules, detailed designs, statements of technical data’, performance and characteristics etc., relating to the work.


1.11   INSPECTOR shall mean any person nominated by the OWNER and the said person nominated shall also ascertain the position of deliveries and expedite the same under the contract and periodically and finally inspect the work.


1.12   Words denoting person shall include firms, companies, corporations, associations or bodies of individuals whether incorporated or not. Words denoting masculine gender or singular number shall also include the feminine gender and plural number and vice-versa where the CONTRACT so requires or permits. The words ‘ including” and “include(s)” as used herein are not to be construed as words of limitation unless the context otherwise requires or unless as contrary intention otherwise appears in the matter.


2.0   AUTHORITY OF PERSON SIGNING DOCUMENTS


2.1   A person signing the Tender or any other documents forming a part of the CONTRACT on behalf of another shall be deemed to warrant that he has authority to bind such other and if one enquiry, it appears that the person so signing had no authority to do so, OWNER may without prejudice to other civil and criminal remedies, cancel the contract and hold the signatory liable for all costs and damages. Any person so signing shall give satisfactory evidence of his authority.


3.0   SECURITY DEPOSIT


3.1   SUPPLIER shall within fifteen days of receipt of OWNER’s acceptance of tender, deposit with the OWNER A security deposit equal to Ten percent (10%) of the CONTRACT value in any one of the following forms:


3.1.1   Cash or Demand Draft payable at Bangalore.


3.1.2   Bank Guarantee as per Annexure-1 hereto from any Indian Nationalised Bank, Scheduled Bank or any other established Bank acceptable to the OWNER. If the Bank Guarantee is from non Indian Bank, the SUPPLIER shall have the said Bank Guarantee properly stamped at Bangalore, Karnataka, India by the Foreign Bank’s Associates, subsidiaries or agents in India in accordance with the laws applicable in the State of Karnataka.


3.1.3   Letter of Credit duly confirmed by State Bank of India, Commercial Branch, Krishi Bhavan, Hudson Circle, Bangalore-560 001.

3.2   The Bank Guarantee shall be for the due and faithful performance of the CONTRACT BY SUPPLIER and shall remain binding, notwithstanding such variations, alterations or extensions of time as may be made, given, conceded or agreed to between OWNER and SUPPLIER under these General Conditions or otherwise and shall be in the form as per Annexure-l (enclosed) and the validity of the Bank Guarantee shall be extended from time to time as required by OWNER.
3.3 If SUPPLIER fails to provide the security Deposit within the period specified, such failure will constitute a breach of CONTRACT and OWNER shall be entitled to terminate the CONTARCT and to place the Purchase Order elsewhere at SUPPLIER’S risk and cost.


3.4    No interest, shall be payable by OWNER on the Security Deposits.


3.5    On due performance and completion by the SUPPLIER of CONTRACT in all respects, the Security Deposit under the said CONTRACT will be returned without any interest thereon after the expiry of the warranty as per clause No.24 herein below.


4.0   RESPONSIBILITY FOR PERFORMANCE OF CONTRACT

4.1   GENERAL

The SUPPLIER shall be entirely responsible for the due performance of the CONTRACT in all respects according to the terms and conditions of the CONTRACT.


4.1.1   Supplies/items supplied shall strictly adhere to the specification stipulated and shall effectively perform its functions for which purpose it is ordered.


4.1.2   Any approval which OWNER and / or INSPECTOR may give in respect of the work or workmanship involved in the CONTRACT(whether with or without tests carried out by the SUPPLIER / INSPECTOR) shall not absolve the SUPPLIER of his contractual responsibilities and obligations.


4.1.3   Notwithstanding any approval or acceptance given by INSPECTOR, it shall be lawful for OWNER to reject the equipment, materials, spares and / or supplies if it is found that the equipments, materials, spares and / or supplies delivered and / or work carried out by SUPPLIER is not in conformity with the terms and conditions of the CONTRACT in all respects.


4.2   CO-OPERATION WITH OTHER CONTRACTORS / SUPPLIERS:

SUPPLIERS shall co-operate with OWNER, other SUPPLIERS and CONTRACTORS including SUB-CONTRACTORS, if any, for any associated plant and shall freely exchange all particulars and technical information with them to obtain the most efficient and economical design and to avoid unnecessary duplication of equipment, materials, spares and / or supplies. Supplier from OWNER shall claim no remuneration for such technical co-operation.

4.3   SUB-LETTING OF CONTRACT:


SUPPLIER shall not sub-let, transfer or assign the CONTRACT or any part thereof without the express prior written approval of OWNER, other than the purchase of bought out items normally purchased from outside sources. In the event of SUPPLIER contravening this condition, OWNER shall be entitled to terminate the CONTRACT and to place the work elsewhere at SUPPLIER’S risk and expenses and SUPPLIER shall be liable for any loss or damage which OWNER may sustain in consequence or arising out of such replacing of the work.


5.0   RESPONSIBILITY FOR COMPLETENESS

Any equipment, fitting, materials or supplies which may not be specifically mentioned in the SPECIFICATION or drawings but which are usual or necessary for carrying out the works under the CONTRACT within the Scope of the Supply / Work to be executed are to provided for and rendered by the SUPPLIER / CONTRACTOR without extra charge and the equipments / supplies must be complete in all respects.

6.0   QUALITY OF MATERIALS AND WORKMANSHIP

TENDERER / SUPPLIER shall be deemed to have carefully examined and to have knowledge of these General Conditions, the PARTICULARS, special conditions, Instructions to Tenderers and other Documents forming the Invitation to Tender / Contract and also to have satisfied himself as to the nature of the work to be executed and other relevant matters and details.

6.1.1   Any information thus had or obtained from OWNER shall not, in any way, relieve SUPPLIER of his responsibilities under Article 5-0 above.


6.1.2   If SUPPLIER / TENDERER shall have any doubt as to the meaning of any portion of the Invitation to Tender, SUPPLIER / TENDERER shall, before signing Tender set forth the PARTICULARS thereof and submit them to OWNER in writing, in order that such doubt may be removed.

6.2   The work shall be of the best quality and workmanship according to the latest engineering practices existing at the time of acceptance of the TENDERS and shall be manufactured from materials of the best quality and highest class for the purpose.

6.2.1   Appropriate factors for safety shall be used thorough the design and specially in the design of all parts subject to varied stresses.


6.2.2   All work shall be performed and completed in a thorough workman like manner and shall follow the best practice in the light of modern developments in the manufacture of high grade equipments notwithstanding any omissions in the SPECIFICATION.


6.2.3   Supplier shall provide the equipments, materials, spares and / or supplies with proper safety devices for protection of workman and shall provide suitable removable safety guards for all exposed moving parts such as Gears, Rollers, Chains, Bells, Brake Wheels, Couplings and the like. SUPPLIER warrants that such work will meet the requirements of and be in conformity with all applicable laws, rules, regulations and ordinances of the Government of India or any sub-division thereof.

7.0 DRAWINGS

7.1   Drawings required to be furnished by SUPPLIER shall be supplied free of cost to OWNER. All drawings shall be supplied in five (5) sets unless otherwise specified.


7.2   SUPPLIER shall furnish to OWNER, at the earliest for approval by Engineer, general arrangement drawings, erection drawings, electrical diagrams, bill of materials, equipment lists, and any other drawings and diagrams required for a complete and serviceable job, showing work to be completed by SUPPLIER and work to be completed by SUB_CONTRACTOR.


7.3   SUPPLIER shall also furnish to OWNER those specific drawings and any other details / information as requested by OWNER.


7.4   Drawings submitted under 7.2 and 7.3 above will be REVIWED by OWNER and returned to SUPPLIER signed and stamped either " APPROVED"APPROVED as noted; or not approved Resubmit, Approved and Approved as noted, drawings (following corrections) may then be issued for fabrication / manufacture. Not Approved Resubmit” drawings shall be corrected and resubmitted for OWNER’s approval.


7.5   After approval by OWNER or his authorised representative, SUPPLIER shall forward one (1) approved reproduceable (sepia) and six (6) copies of approved drawing to OWNER. The approval shall be in the form of duly authenticated stamps with signature on the drawing.


7.6   Approval of SUPPLIER’S drawings by OWNER shall not relieve SUPPLIER from any responsibility covered by the requirements of the CONTRACT.

8.0   MANUALS

8.1   The SUPPLIER shall deliver free of cost, the following manuals in 6 (6) copies along with the consignment for all equipments / supplies.

8.1.1   Operating manuals, covering general description, operating principles and operating procedures.

8.1.2   Maintenance manuals covering preventive and corrective maintenance.

8.1.3   Calibration manuals, if applicable.

8.1.4   Spare parts catalogue for mechanical, electrical and instrumentation portion of equipment.

8.1.5   Any other documentation as required in the specification.

8.2   Manuals shall be printed in English on good quality paper and shall be contained in suitable durable bindings.

8.3   Manuals provided by SUPPLIERS or his SUB-CONTRACTOR/S shall be complete and shall cover all equipments, materials, spares and / or supplies.

9.0   PROGRESS REPORTS

9.1   Progress reports wherever specified shall be submitted to OWNER once in a month or at frequent intervals in five (5) copies in a form acceptable to OWNER in English.
9.2   Such progress repots shall indicate, in suitable details, the progress of the procurements of raw materials manufactured both in SUPPLIER’S shops and SUB-CONTRACTOR’S shops, and any other work to be performed by SUPPLIER. Photographs wherever possible shall be submitted.
9.3 The progress reports shall further compare actual versus projected completion dates and describe current and anticipated problems and delay factors, if any. Report shall also include corrective action taken or proposed to be taken without in any way relieving or affecting the SUPPLIER’S responsibility to deliver the equipments within the stipulated delivery date(s) / (period)(s).


10.0   CHANGES

10.1   OWNER shall have the right to make such and / or variation in the SPECIFICATIONS as may be necessary or desirable from time to time during subsistence of the CONTRACT till the stage of testing and commissioning.


10.2   Prior to commencement of any additional work based on a change in SPECIFICATION as above involving compensating / reduction on the Contract price, SUPPLIER shall submit to OWNER a detailed estimate in writing of the price for such additional / reduced works.

10.3 Upon approval by OWNER, OWNER shall issue to SUPPLIER a written order covering the changes in work and price which shall then form part of the CONTRACT. SUPPLIER shall not proceed with any additional work prior to receipt of OWNER’S said written order.

11.0 SPARES PARTS

SUPPLIER shall include in his Tender a firm priced, itemised list of recommended spare parts necessary for the proper operation and maintenance of the equipment for a period of one (1) year.

This quotation shall be be valid for 90 days from the date of acceptance of Tender for the main equipment. The TENDERER shall also quote itemised individual prices for the insurance spares necessary for uninterrupted operation of the equipment. It shall be obligatory on the part of Supplier to ensure uninterrupted supply of spare parts for the proper maintenance of the equipments.

12.0   TIME SCHEDULE

12.1   The time and date(s) of delivery of the equipments, materials, spare and / or supplies as agreed to between SUPPLIER- OWNER shall be deemed to be essence of the CONTRACT, and delivery must be completed not later than the date (s) / so specified.


12.2   Within fifteen (15) days, of the acceptance of Tender, SUPPLIER shall submit for OWNER’S approval a progress schedule covering all phases of the work including design, procurement, fabrication / manufacture and transportation.


12.3   SUPPLIER shall allow all reasonable facilities to INSPECTORS and OWNER’S representative(s) including free and full access to SUPPLIER’S facilities and to all records having a bearing on the progress and quality of the work and deliveries under the CONTRACT.


13.0 INSPECTION

13.1   INSPECTOR shall have the right to inspect and test the work or any part thereof and to observe any test carried out by SUPPLIER at any time and SUPPLIER, on demand from INSPECTOR shall at no additional charges to OWNER, carry out such tests, in an appropriate manner in the presence of INSPECTOR.


13.2   SUPPLIER shall afford at his own expense full, free and safe access and facilities at his works and / or his SUB-CONTRACTOIR’S works for INSPECTOR to carry out and / or observe such inspections and / or tests.


13.3   Any such inspection, examination or testing carried out by INSPECTOR or observed by him shall not relieve Supplier from any of his obligations under the CONTRACT to be otherwise successfully performed by the SUPPLER.


13.4   SUPPLIER shall give INSPECTOR not less than one week’s notice in writing regarding any tests to be carried out by SUPLIER or SUB-CONTRACTOR and the period likely to be required for such testing. INSPECTOR shall give the SUPPLIER written notice within five (5) days of receipt of such notice as to whether, INSPECTOR intends to witness the said tests and indicating the dates normally not more than fifteen (15) days from the date of receipt of SUPPLIER’S notice on which Inspector will be available at SUPPLIER’S or his SUB-CONTRACTOR’S facilities for such tests failing which SUPPLIER OR SUB-CONTRACTOR may proceed with the test.


13.5   If INSPECTOR is not present, SUPPLIER shall immediately notify Inspector in writing as to the test results.


13.6   When the test and / or inspections have been complete to INSPECTOR’S satisfaction, INSPECTOR shall issue a certificate to that effect. No equipments, materials, spares or supplies for which tests and / or inspections are performed shall be despatched by SUPPLIER before such certificates are issued.


13.7   INSPECTOR may reject the whole or any part of the work at any time after testing / inspection, if the INSPECTOR at his sole discretion determines the work to be unsatisfactory or dose not fulfil the requirements of the CONTRACT.

INSPECTOR shall advice SUPPLIER and OWNER in writing as to the grounds for rejection. INSPECTOR’S decision regarding rejection shall be final and binding on the SUPPLIER.


13.8   In the event of any rejection as aforesaid, then without prejudice to the for going provision, OWNER shall be at liberty to.

13.8.1  Allow SUPPLIER to offer once again, within a time specified by INSPECTOR, the equipments, materials, spares and / or supplies in replacement of those which have been rejected, the SUPPLIER bearing all costs for such replacement.

                                                      Or

13.8.2   Buy the quantity of equipemnts, materials, spares and / or supplies so rejected of the same or equivalent or the nearest specification from elsewhere at SUPPLIERS risk and cost without affecting SUPLIER’S liability as regards the supply of any consignments due under the CONTRACT in accordance thereto.

14.0 PRICE

14.1   The Supplier shall quote item-wise price(s) on FAS port of shipment for items being offered for shipment from North American Sea ports or FOB port of shipment from all other ports. The mutual responsibilities shall be as per INCO TERMS as amended from time to time. The price shall include export packing charges, inland freight to the port of shipment, terminal handling charges, container handling charges, if any etc.


14.2   Supplier shall indicate separately the inland freight from place of manufacture to the port of shipment and insurance, if any, contained in his price. The Supplier shall also indicate separately the ocean freight.


14.3   Where prices are quoted on FAS Port of shipment basis, the Supplier’s liability shall be deemed to cover as on FOB port basis, as defined by INCO TREMS including lifting charges, port charges, wharfage / container handling charges, terminal handling charges if any, etc.


14.4    For all small consignment, instruments of delicate nature etc. SUPPLIER shall quote prices on FOB international (gateway) Airport basis as per INCO TERMS.

15.0   DELIVERY

15.1   SUPPLIER shall be responsible to deliver shipments free alongside ship (FAS) / Free on Board (FOB) at port of shipment or FOB International Airport as specified in the ORDER.


15.2    SUPPLIER shall include and provide for securely protecting and packing the equipments, materials, supplies and spares so as to avoid loss or damage in transit including extended ocean shipment and storage under tropical conditions. All packing shall allow for easy removal and checking at the site. Special precaution shall be taken in case of transit by sea. Details regarding provisions for packing and marking all deliveries set out in Annexure-II attached hereto and made a part hereof. All cost in this regard shall be to SUPPLIERS account.
15.3 SUUPLIER shall be responsible for obtaining any export license / permit required for export from the country of manufacture of the equipments, materials, supplies and / or spares called for hereunder and all expenses incidental to the performance of statutory or non-statuary obligation in this regard shall be to SUPPLIER’S account.


15.4    Special conditions regarding shipment and transportation are set out in schedule attached hereto and made a part hereof (Annexure-II)
15.5 Should the Freight Forwarder fail to provide the shipping space at the time intimation given by the SUPPLIER, receipt of the consignment by the freight forwarder shall be taken as date of delivery to the OWNER for the purpose of levy of liquidated damages as per provision at article 19.0 below.
15.6 In case of shipment by Air, SUPPLIER shall arrange such shipments only through consolidation Agent nominated / specified in the Purchase Order.

16.0    RECONSERVATION

16.1   The SUPPLIER should ensure prior to dispatch, reconservation of equipment and material for storage for minimum period 6 months.


16.2   The SUPPLIER should give his recommendation on reconservation procedure to be followed in case the equipments are stored beyond six months period.


16.3   The packages should be marked with the date of preservation of such equipments, which are liable to be damaged, if not reconserved within the specific period.


17.0   TEST ON COMPLETION


17.1   Wherever possible, all tests shall be carried out before dispatch


17.2   The test certificates for all components / materials / equipments as required under the technical specification shall be submitted.


17.3   Should however, it becomes necessary for the final tests as to performance and guarantee (if any) to be held until the equipments materials or supplies to be erected,at site, such final tests shall be carried out by the OWNER in the presence of SUPPLIER or his designated representative within one (1) month (or such other time as the parties any reasonably agree to) from the date of completion of erection or from the date on which the equipments materials and / or supplies are put into operation whichever is later. The cost of these tests shall be to SUPPLIERS account.


17.4    Should the results of these tests not come within the tolerance (if any) specified, the tests shall at Owner’s option be repeated within one (1) month from the date of equipments, materials and / or supplies are ready for retesting.


17.5   The cost of such retesting shall be to supplier’s account.

18.0   FAILURE OF DELIVERY :

Should SUPPLIER fail to make despatch within the time period (s) specified in accordance with Article 13.0 above, OWNER shall be entitled immediately on such failure or at any time thereafter at the entire option of owner to either.

18.1.1   Purchase elsewhere, without notice to SUPPLIER at the risk and cost of the SUPPLIER, the equipments, materials, spares and / or suppliers not delivered, of a similar or the nearest specification without canceling the CONTRACT in respect of equipment, materials, spares and / or supplies not yet due for shipment / delivery

                                                       Or

18.1.2   Cancel the CONTRACT in full or the portion thereof in default, and if so desired to purchase elsewhere the full or defaulted equipment, material, spare and / or supplies or items of similar, or the nearest specification at the risk and cost of SUPPLIER.

19.0   DELAYED DELIVERY AND LIQUIDATED DAMAGES:

OWNER shall be have the option to accept delivery of material after the originally stipulated delivery period in the CONTRACT and in case of acceptance of delayed delivery OWNER shall recover or retain from SUPPLIER as agreed liquidated damages and not as penalty a sum equal to quarter percent (1/4%)
of the price of any equipments, materials, spares and / or supplies which SUPPLIER has failed to despatch as aforesaid for each week or part of a week, during which such despatches may be delayed, subject to a maximum limit of five percent (5%) of Contract value.

20.0    FALIURE TO MEET TEST STANDARTDS

20.1.1    If the erected equipments, materials and / or supplies fail to meet the test standards under Article 19 shall be found to be defective or otherwise fail to fulfill the terms of CONTRACT. OWNER shall give SUPPLIER written notice setting forth the details of such defects or failure.


20.1.2   SUPPLIER shall immediately correct / remedy such defects and failures or alter the equipments, materials and / or supplies to bring them into compliance with the CONTRACT terms.


20.1.3   If SUPPLIER fails to do so within a reasonable time, as may be stipulated by the OWNER, OWNER may reject and replace, at SUPPLIER’S sole expense, the whole or any portion of the equipments, materials, supplies which are defective or fail to meet CONTRACT terms. Such replacement shall be carried out by OWNER within a reasonable time and price and, where reasonable possible the same SPECIFICATION or the nearest specification.


20.1.4   SUPPLIER’S liability under this clause shall be satisfied by the payment to OWNER of the assessed difference, if any, between the replacement price of the rejected / non-conforming items including transportation cost, taxes, duties, other incidental expenses and CONTRACT price and any amount previously paid to supplier.


20.1.5    If OWNER is unable to replace the rejected items within, a reasonable time, SUPPLIER’S liability under this clause will be satisfied by repayment of all money paid by OWNER to SUPPLIER in respect of such items.


20.1.6   In the event of rejection by OWNER under this clause, OWNER shall be entitled to use the rejected items in a reasonable and proper manner for time sufficient to enable OWNER to obtain replacement items. Thereafter supplier at his own cost shall immediately remove the rejected / non-conforming items from OWNER’S premises. Such items shall be at Supplier’s risk from the time of discontinuance of use and if not promptly removed thereafter, OWNER may at his option, with regard to said rejected / non-conforming items return them to SUPPLIER, on ‘Freight collect’ basis or dispose of / or segregate the item as OWNER deems fit but in any event at SUPPLIER’S risk.

21.0  NEGLIGENCE

21.1   If the SUPPLIER shall neglect to execute the work with due diligence or expendition or shall refuse or neglect to comply with any reasonable order given to him in writing by OWNER / INSPECTOR, in connection with the work, or shall contravene the provisions of CONTRACT, the OWNER may give notice in writing to SUPPLIER calling upon him to make good the failure, neglect or contravention complained of , within such time as may be deemed reasonable and in default of the complaince, with the said notice the OWNER without prejudice to his rights under para below hereto, amy rescind or cancel the Contract holding the supplier liable for damages that the OWNER may sustain in this behalf. The making good of the failure, neglect or contravention hereunder will be governed by provision of Article 18 & 19.


21.2   If SUPPLIER fails to comply with such notices within a reasonable period from the date of serving thereof, in the case of failure, neglect or contravention capable of being made good, within that time or otherwise within such times as may be reasonable necessary for the same making good, then in such case without prejudice to the OWNER’S right under para above hereto, the OWNER shall have the option and be at liberty to take the work wholly or in part out of the SUPPLIER’S hands and may complete the work envisaged in the CONTRACT at a reasonable price with any other person or persons to execute the same or any part thereof.


21.3    If the cost of executing the work as aforesaid shall exceed the balance due to the SUPPLIER, the outstanding balance shall be paid by the SUPPLIER on the certificate of the OWNER.


22.0   RECOVERY OF SUMS DUE:

22.1   Whenever under this CONTRACT any such of money is recoverable from and payable by the SUPPLIER whenever the owner has preferred any claim against the SUPPLIER, the OWNER shall be entitled to recover and / or to retain such sum by appropriating in part or whole out of the security desposited by the SUPPLIER, and in the event of the Security being insufficient or if no security has been taken from the SUPPLIER, then the balance or the total sum recoverable, as the acse may be, shall be deducted / retained from any sum then due or which at any time thereafter may become due to the SUPPLIER under this or any other CONTRACT with the OWNER. Should this sum be not sufficient to cover the full amount recoverable, the SUPPLIER shall pay to the Owner, on demand, the remaining balance due.

23.0   PAYMENT:

23.1   All payments due to SUUPLIER hereunder shall be made under Letter of Credit established through a bank in the country of manufacture and valid for a period extending until the date of shipment and payment schedule set out in the CONTRACT. OWNER shall be responsible for the charges for opening the Letter of Credit. All other expenses incidental to maintenance of the Letter of credit shall be borne by SUPPLIER. Charges for extending the duration of the letter of credit shall be to SUPPLIER’S account if