Terms of business

Standard Terms of Business for Repair, Modification,
Dock and Slip Orders (ST Rep)

I. Validity of the ST Rep.

The following ST Rep. are valid exclusively for all offers and orders regarding the implementation of repairs and modifications (including maintenance and improvement) of ships as well as ship equipment - hereinafter "ship" - whether with or without docks resp. slips; any deviating conditions of our contractual partners - hereinafter "customer" - are non-binding for us, even if we do not explicitly contradict them.
The most current terms of business are always applicable.

II. Delivery and pick-up of the ship

The ship must be brought to the front of the dock resp. slip or instructed repair point at the agreed time and must be picked up from there. Unpunctual delivery entitles us, among other things, to otherwise dispose of the dock resp. slip and to demand payment according to our dock and slip rates for every commenced hour of delay, the customer may prove that a damage or reduction of value had not taken place or in an essential less height.
The price list for dock and slip work can be looked at in our office and handed over if required.
The ship, especially tankers and chemical ships, must be delivered gasfree and clean and continuously possess a valid gasfree certificate. The crew must remove inflammable and explosive substances from the area in which we are to carry out work. The customer is liable for all damage caused through non-observance of these regulations according to German Law.
On request we will arrange mooring teams or make them available against payment; but without any responsibility for the risks connected with mooring.
We do not take any responsibility for the risks connected with delivery or pick-up of the ship; not even if the tow or mooring team has been arranged or made available by us against payment.

III. Risk bearing, duty of care

Objects given to us for the implementation of the order or for storage are stored by us at the customer's expense and risk.
We are not liable for loss caused through theft from the ship, from or of its equipment and fittings, and from or of the cargo or parts provided by the orderer.
The customer must provide at his own expense security, mooring and position lights in particular, and ship insurance.

IV. Other work on the ship

During the ship’s stay at our shipyard nobody is allowed to carry out work on the ship without our permission except the ship’s crew.

V. Conclusion of the contract

Our written contract confirmation and, in case such a confirmation does not exist, the written order of the customer is decisive for the scope of work of the order.
Even without the written order or written confirmation of the customer, we are entitled to charge for additional work extending the scope of the order when
1. this work has become necessary, because after tendering, or in case we did not tender, after the order had been placed, the German industry standards applicable to the delivery/service object or the regulations of a classification society, a responsible employees' industrial compensation society or any other official authority have changed;
2. after placing the order and during the implementation of the work, the additional work became necessary for the proper execution of the customer’s order.
3. The additional work is based on an - also verbal - instruction from the customer, which he issued to us after placing the original order.
4. We are not obliged to carry out additional orders issued after conclusion of the contract as long as no written agreement on the price, the effects on the completion date and other consequences has been achieved.

VI. Consultation

We may rely on a statement of a classification society, an employees' industrial compensation society or any other official authority and its authorised representatives. We advise the customer to the best of our knowledge, but without any liability whatsoever in the settling of the scope of the order; a possible liability for committing an act of culpable negligence or for commitment of an act of culpable negligence with intent by us, our legal representative or a person supporting the fulfillment of the order remains unaffected. The customer remains solely responsible for the decision on the scope and usefulness of the ordered services and deliveries.

VII. Remuneration and conditions of payment

Docking in and docking out resp. slipping in and slipping out of ships is calculated according to our dock and slip rates, which can be viewed by the customer at our premises or can be requested from us.
The remuneration for executed services and deliveries is due for payment without any deduction at the latest on completion. In the case of arrears in payment, the shipyard is entitled to demand interest on arrears amounting to 2% p.a. above the respective discount rate of the Deutsche Bundesbank, at the least however 12% p.a., the customer may prove that the damage caused by delay had not taken place or only in an essential less height. During the implementation of the order we are entitled to demand payments on account according to the respective scope of the produced services and deliveries.
The removal of snow or rainwater, oil, rust or cargo residue in the area in which we are to carry out any work, as well as the disposal of any refuse caused on board, are not included in the order price and will be invoiced separately according to expense. The same applies to the connection of a telephone line including charges, as well as supplying the ship with electricity, water, gas, oxygen and such, insofar as these are not required for the completion of the order.
The order prices are calculated in such a manner that the scrap remains with us.
Cost estimates are only binding for us if we have submitted these in writing and explicitly describe them as binding.
The customer cannot refuse his services due to any counterclaims or keep them back to offset counterclaims, unless these counterclaims have been acknowledged by us or juridically confirmed. The customer is only with our explicit confirmation allowed to transfer possible claims against us to a third party. & 351 HGB (German Code of Commercial Law) remains unaffected.

VIII. Deadlines and notice periods

Deadlines and notice periods for the implementation are, unless explicitly described as binding by us, only to be understood as approximate and can be exceeded by us by a reasonable period of time.
We are not liable for a delay or impossibility of performance that comes about through strike, lockout, or breakdown of any kind or through other circumstances for which we are not responsible;
If we get into arrears with our delivery or service the customer may according to legislation withdraw from the contract or assert damages for delay. The liability for compensation for assert damages is limited to 5% of the order value, unless we or our legal representatives or executing aide committed an act of culpable negligence or committed the assert with intent.

IX. Warranty and notice of defect

We guarantee our deliveries subject to the proviso that we eliminate any defects which are promptly claimed and not yet in lapse, at our expense in the way of finishing up, or at our choice in the way of compensation deliver an alternative good or replace the defective parts. The rights of warranty of the customer are at first limited to the right of claiming a rework; if the rework failed, the customer is allowed to reduce or at his choice to withdraw from the contract; as far as the contract is about construction work, the right of the customer is limited to the right of reduction in case of failure of the rework.

The period of limitation for warranty claims, liability claims and other claims against us is 1 year. This is not applicable for warranty claims according to cases of §§ 438, sect.1 No. 2 and 634 a, sect.1 No. 2 BGB (German Civil Law). For liability claims for damages out of injury of life, of the body or of the health, due to a culpable breach of duty through us or our legal representative or executing aide, and also other kind of damages which are due to a negligent breach of duty through our legal representatives or executing aide, the legal period of limitation is applicable.

The yard is only obliged to do rework or deliver alternative goods after payment of an appropriate part of the contract price under consideration of the defect.
Obvious defects must be reported to us in writing immediately, at the latest 2 weeks from the date of delivery or acceptance of the service; when the deadline had passed, warranty claims due to these defects are excluded. Defects which are not obvious have to be reported to us immediately after they have been recognised.
We can exempt ourselves from our liability for delivery and services carried out by our subcontractors or other supporters first by transferring our claims to the customer which we have against our subcontractors or supporters because of the defects. As far as a court demand of the customer against the subcontractor or supporter had been without success, we are liable to the customer with regard to the claims of defect and reimburse him also the expenses for the demand without success, if they had not been caused by the customer.
Replaced parts can become property of the yard, if we want.

The yard is no longer obliged to warrant when the deliveries or services with a defect have been changed, worked at or treated or repaired by a third party not authorised by the yard.

The ships have to be set at the disposal of the yard for carrying out rework. As far as this should economically be not useful, the customer can, with agreement of the yard, let the works be carried out at another yard. The yard reimburses the necessary and verified expenses to the height of the costs that would have occurred at carrying out the works at the yard.

X. Other liability and compensation claims

Any other liability from our side beyond the aforementioned sub-sections (VIII) and (IX) for direct and indirect damage, regardless of the legal justification, is excluded, unless we or our legal representatives or supporters are guilty of wilfulness or gross negligence.

The right of the customer to wilthdraw from the contract in case of a breach of duty for which the yard is responsible and which is not a defect in delivery or service remains unaffected.
Our liability for compensation for resultant damages at parts different from those delivered or at other property of the customer is excluded, as long as we can prove that the breach of duty was only light negligence and that the damages did not result from an essential breach of contract. This exemption from liability is not valid when the existing liability insurance for the company and for its products meets the damage occurred.

This exemption from liability regulated in subsection 1 is not valid for damages out of breach of life, of body or health, due to a negligent breach of duty through us or a wilful or negligent breach of duty through our legal representative or supporter. The exemption from liability is also not valid if we made contradictory assurances or guarantees or concealed a defect with fraud.
Additionally to the aforementioned restriction of liability (subsection 1.) the following restrictions for the liability of the yard are valid:

Tugging and moving of the ship is only carried out under the responsibility and under payment and risk of the customer, also if the equipment and the personnel is supplied, arranged, or invoiced by the yard. During docking and laying period the yard does not have any duty of care. The guarding of the ship and it’s cargo during yard stay is exclusively responsibility of the customer. When dangerous works have to be carried out on board of the ship the customer has to attend by own guarding measurements to the fact that the usual care standard is fulfilled and to advise the yard about impending risks. This is especially valid for keeping the legal and official regulations according to protection against fire.

The yard is not liable for damages which result from an already existing lack of stability or seaworthiness. The customer is obliged to indicate explicitly in written form to the yard about circumstances which can harm the stability and the seaworthiness of the ship and despite of correct work carried out by the yard can cause the risk of damaging the ship or it’s interior. The condition of the ship necessary for docking (trim and weight) has to be coordinated with the yard and to be set by the customer.
The customer is obliged to maintain the usual insurance cover – hull insurance and P+I cover – during the entire yard stay or for the period in which the works are to be carried out, respectively, and to include the yard (agents, senior executives and supporters) into the insurance cover.

XI.

Place of performance for both parties is the place where our company is situated.
All legal relationships are subject to the law of the Federal Republic of Germany under the exclusion of standardised purchasing laws and other international agreements. Legal venue for all disputes from this contractual relationship including its effectiveness and including any claims from tort for business deals with registered traders as well as customers who have no general legal venue in the Federal Republic is Itzehoe or at our discretion the registered headquarters of the customer, as well as any other place in which assets of the customer are situated.

The contract continues to be binding even in case of legal ineffectiveness of individual points. Contradicting terms and conditions of business of the client do not apply.

Date: September 2004

These Terms of Business have been translated from German. In case of misunderstanding the German version is decisive.

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