Preamble

Except as may otherwise be negotiated by the parties and agreed to in writing, the following terms and conditions shall apply to all sales of marine bunker fuels, and/or lubricants and/or other products by ETE/Neftehim-Bunker Jsc (the Supplier). Each delivery will be as specifically negotiated between the Supplier and the Buyers as evidenced by the Supplier's Confirmation Note and in the event of any conflict between these terms and conditions and the terms of the Confirmation Note the terms of the latter shall prevail. These terms and conditions may be referred to as "European Trading Enterprise/Neftehim-Bunker Jsc. Standard Terms 2008".

 1. Definitions

Throughout this Contract, save where the context otherwise requires, the following definitions shall be applied:

"Marine Fuels" means products, derived from crude oil, delivered or to be delivered to the Vessel.

"Supplier" means the party contracting to sell and deliver Marine Fuels, and "Buyers" means the party contracting to purchase, take delivery of and pay for the Marine Fuels.

"Bunker Tanker" means bunker barge or tanker supplying marine fuels to the Vessel.

"Product" means marine bunker fuels, and/or lubricants and/ or other products of whatever type and description as specified in the Confirmation Note

"Vessel" means the vessel, ship or craft duly nominated to receive Product as specified in the Confirmation note.

2. Grades and quality/Quantity.

a. The Buyers shall have the sole responsibility for the nomination of the grades and the quantity of Marine Fuels suitable to the Vessel.

b. The Supplier warrant that the Marine Fuels shall be of a homogeneous and stable nature, shall comply with the grades nominated by the Buyers and be of satisfactory quality. Unless otherwise agreed in the Confirmation Note, the Marine Fuels shall in all other respects comply with ISO Standard 8217: 2010 or any subsequent amendments thereof.

c. The Supplier can in no circumstances be held responsible for the consequences of the misuse or defective application of any such product, if caused by lack of information or misinformation given by the Buyers on the use or application of any such product.

d. It is the duty of the Buyers to take all reasonable actions, including retention and burning of Marine fuels, in order to eliminate or minimize any costs associated with an off specification or suspected off specification supply. To this end Buyers shall cooperate with Supplier in achieving the most cost effective solution. In any event, Supplier's obligation hereunder shall not exceed direct expenses incurred for removal and replacement of fuel and shall not include any consequential or indirect damages or injuries, including without limitations, demurrage claims, loss of contract or loss of profit. If Buyers remove or burn such Marine fuels without the consent of Supplier, then all such costs shall be for Buyers' account.

 3. Quantity and Measurements

a. Subject to the provisions of Clauses 6(c) and 9 hereunder the quantities of Marine Fuels delivered shall be determined from the official gauge or meter of the bunker tanker or tank truck effecting delivery, or in case of delivery ex wharf, of the shore-meter.

b. The Buyers and the Supplier shall both have the right to be present or represented when such measurements are taken and shall be given sufficient information and access to bunker tanker or tank truck or shore-meter and relevant documentation to verify the volume delivered.

c. The Marine Fuels to be delivered under this Contract shall be measured and calculated in accordance with the ISO-ASTMAPI-IP Petroleum Measurement Tables.

 4. Sampling

a. The Supplier shall arrange for a representative sample of each grade of Marine Fuels to be drawn throughout the entire bunkering operation and that sample shall be thoroughly mixed and carefully divided at least into  3 (three) identical samples. The sampling shall be performed in the presence of both the Supplier and the Buyers or their respective representatives. The absence of the Buyers or their representatives shall not prejudice the validity of the samples taken.

b. The samples shall be drawn at a point, to be mutually agreed between the Supplier and the Buyers or their respective representatives, closest to the receiving Vessel's bunker manifold.

c. The samples shall be drawn using a mutually accepted sampling device which shall be constructed, secured and sealed in such a way so as to prevent the sampling device and the samples being tampered with throughout the transfer period.

d. The aforementioned samples shall be securely sealed and provided with labels showing the Vessel's name, identity of delivery facility, product name, delivery date and place and point of sampling and seal number, authenticated with the Vessel's and Bunker Tanker's stamp and signed by the Supplier's representative and the Master of the Vessel or his authorized representative, the numbers of the collected samples shall be clearly stated in Bunker delivery receipt (BDR). The samples, which numbers are stated in BDR, are considered to be arbitrary.   

e. One (1) sample shall be retained by the Supplier for ninety (45) days after delivery of the Marine Fuels to the Vessel or, on being requested in writing by the Buyers, for as long as the Buyers may reasonably require, and the other two (2) samples shall be retained by the Vessel, one of them shall be arbitrary and one Marpol.

 5. Delivery

a. Delivery of the Marine Fuels shall be made day and night, Sundays and holidays included, at the port or place of delivery, subject always to the custom of that port or place.

b. The Vessel's estimated time of arrival shall be as stated in the Confirmation note. Supplier shall be under no obligation to deliver if the Vessel arrives outside the price validity time range as stated in the Confirmation note, not more than 7 (seven) days from the date, stated in the Confirmation note.

c. The Buyers, or their agents at the port or place of delivery (whose name to be advised by Buyers upon placing the nomination), shall give to the Supplier, or their representatives at the port or place of delivery, 72 and 48 hours approximate and 24-hours definite notice of arrival and the locate on and time at which deliveries are required. Buyers agents shell be instructed to give as much assistance as it is possible to present all necessary documents for the customs clearance of the Marine Fuels to be delivered on board by the Supplier.      

d. The Supplier shall:

1. be in possession of all permits required to comply with all relevant regulations pertaining to delivery of Marine Fuels at the port or place of delivery

e. The Buyers shall be responsible for making all connections and disconnections between the delivery hose(s) and the Vessel's manifold and to ensure that the hose(s) are properly connected to the Vessel's manifold prior to the commencement of delivery.

f. The Buyers shall ensure that the Vessel is in possession of all certificates required to comply with all relevant regulations pertaining to delivery of the Marine Fuels at the port or place of delivery and that the Master of the Vessel shall:  

1. advise the Supplier in writing, prior to delivery, of the maximum allowable pumping rate and pressure and agree on communication and emergency shut-down procedures;

2. notify the Supplier in writing, prior to delivery, of any special conditions, difficulties, peculiarities, deficiencies or defects in respect of and particular to the Vessel which might adversely affect the delivery of the Marine Fuels;  

3. provide a free side to receive the Marine Fuels and, when delivery is made by bunker tanker, render all necessary assistance which may reasonably be required to moor or unmoor the Bunker Tanker.

g. The Vessel shall provide segregated tankage to receive the contracted quantity of Marine fuels. The Supplier shall not be responsible for on board safety or storage failures that may affect the delivery as requested and shall have the right to recover from Buyers any cost incurred there from (see also Clause 9(b) for quality claims. The Supplier bears no responsibility for the quality of the product onboard, in case the fuel oil delivered by him is commingled with the fuel oil onboard.

6. Documentation

a. Before commencement of delivery the Supplier shall present for written confirmation by the Master of the Vessel or his representative, a Bunker List or similar document, duly signed by the Supplier or their representative, which shall contain the following info:

          *name, IMO number of the vessel

          *grades of fuel to be supplied

*pumping rate during beginning, finish and main time of bunker ops

*meter readings onboard the barge before commencement of bunker ops

b. Once the delivery is completed and quantities measured, a bunker delivery receipt (BDR) shall be signed and stamped by the Master of the Vessel or his representative, and returned to the Supplier , or their representative, as acknowledgement of the actual volume and the actual delivery temperature only and a duplicate copy shall be retained by the Master of the Vessel. This receipt shall contain the following minimum information which is warranted by the Supplier :

delivered quantity in volume units

delivered quantity in metric tons units

density in kg/m3 at 15 C as per ISO 3675

delivery temperature

flash point

sulphur content in % m/m as per ISO 8754

viscosity

pour point

water content

c. In the event the Master is not satisfied with the sampling, quality, quantity or any other matter concerning the Marine Fuels or their delivery, he shall make appropriate remarks in the receipt referring to a separate letter of protest to be issued and delivered immediately.

Verification of the information provided under Clause 6(b) may be obtained by analysis of the Supplier's retained sample, which number is stated in BDR.

7. Price

a. The price of the Marine Fuels shall be in the amount expressed per unit and in the currency stated in the Confirmation Note for each grade of Marine Fuels delivered into the Vessel's tanks free delivered/ex wharf as applicable and stated in the Confirmation Note.

Should the Vessel not arrive within the determined time range (7 days), the Confirmation note shall be considered null and void unless Supplier elect to accept the new readiness date as the basis of a new one for which a new price can be agreed upon with Buyers.

b. Any and all additional charges, if applicable, shall be specified in the Supplier's quotation and in the Confirmation note and shall include but not be limited to:

1. Wharfage charges, barging charges or other similar charges;  

2. Mooring charges or port duties incurred by the Supplier which are for Buyers' account;

3. Duties, taxes, charges or other costs in the country where delivery takes place, for which the Supplier are accountable but which are for the Buyers' account.

4. barging charges plus transportation taxes, if any, for delivery of fuel to distant regions of the port (Lomonosov, Kronshtadt, Bronka, Outer roads) additional fees for providing ice-breaking services in winter.

c. In the event the Buyers fail to take delivery, in whole or in part, of the quantities nominated, Buyers shall be responsible for any costs resulting from their failure to take delivery, as well as for any losses incurred by Supplier to downgrade the fuels.

d. Should the Buyers cancel the Sale contract and the Vessel still call at the contractual port, within the contractual time range, Buyers shall pay to Supplier 2000 (two thousand) US dollars as liquidated damages, and the Buyers agrees that this is a fair assessment of the damages so caused to Supplier .

8. Payment

a. Payment for the Marine Fuels shall be made by the Buyers within the number of days stated in the Confirmation Note after the completion of delivery. In the event payment has been made in advance of delivery, same shall be adjusted on the basis of the actual quantities of Marine Fuels delivered and additional payment/refund, as the case may be, shall be made within thirty (30) days after the completion of delivery.

b. Payment shall be made in full, without set-off, counterclaim, deduction and/or discount, free of bank charges.

c. Payment shall be deemed to have been made on the date the payment is credited to the counter of the bank designated by the Supplier . If payment falls on a non-business day, then payment shall be made on or before the business day nearest to the due date. If the preceding and succeeding business day are equally near to the due date, then payment shall be made on or before the preceding business day.

d. Any delay in payment shall entitle the Supplier to interest at the rate of 5% per month or any part thereof.

e. In the event of non-payment, the Supplier reserve the right to pursue such legal remedies as may be available to them to recover the amount owed.

 9. Claims

a.

1.  Any dispute as to the quantity delivered must be noted at the time of delivery in the BDR or in the letter of protest referred to in Clause 6(c) above. Any claim as to short delivery shall be presented by the Buyers in written within 7 days from the date of delivery, failing which any such claim shall be deemed to be waived and barred.

2. These are the most easily avoided by ensuring high standards of checking before, during and after Delivery by an Office of the Vessel's crew of other senior representative of the Customer.

3. Flow meters must be checked for seals, correct settings and calibration and general condition. All of these checks must be carried out before and after delivery of each consignment and each barge, wagon or vehicle tank load. The Delivery must be supervised at all times and care must be recorded on the Physical Supplier's Bunker List. Unless these procedures are followed it is nearly always impossible for a claim to be substantiated. The Company regrets therefore that it will be obliged to reject claims for short delivery where these receiving procedures are not followed.

4. The Buyers shall be charged for all proven additional expenses incurred by the Supplier in connection with the Buyers' failure to take delivery of the full quantity of Marine Fuels ordered by the Buyers.

b.

1. Any claim as to the quality or description of the Marine Fuels must be notified in writing, as per Clause 6(c) or promptly after the circumstances giving rise to such claim have been discovered. If the Buyers do not notify the Supplier of any such claim within 14 days of the date of delivery, such claim shall be deemed to be waived and barred.

2. In the event a claim is raised pursuant to Clause 9(b) (i), the parties hereto shall have the quality of the Marine Fuels tested by a mutually agreed, qualified and independent laboratory. The Supplier shall provide the laboratory with one of the samples retained by him as per Clause 4 (d) & (e). If ISO grades have been specified the analysis shall be established by tests in accordance with ISO 8217: 2005 and ISO 4259 or any subsequent amendments thereof. If non-ISO grades have been agreed, tests will be made in accordance with standards corresponding to the aforementioned ISO standards. Unless otherwise agreed the expenses of the analysis shall be for the account of the party whose claim is found wrong by the analyses.

c.

In the event of any delay resulting from the Buyers' failure to give proper notices and/or to comply with the notices given pursuant to Clause 5(b) above and/or the Buyers'Vessel failing to receive Marine Fuels at the pumping rate referred to in Clause 5(f) (i) above, then the Supplier shall have mutually agreed compensation.

d.

Neither party shall be liable for indirect or consequential loss and/or damage arising from this Contract.

10. Risk/title

Risk in the Marine Fuels shall pass to the Buyers once the Marine Fuels have passed the Supplier's flange connecting the Vessel's bunker manifold with the delivery facilities provided by the Supplier . Title to the Marine Fuels shall pass to the Buyers upon payment for the value of the Marine Fuels delivered, pursuant to the terms of Clause 8 hereof.

11. Lien

The Supplier shall have a right of lien over the Marine Fuels delivered, if the laws applicable to this Contract grant or recognize such a lien, until payment has been made pursuant to the terms of Clause 8 hereof. In the event that the Marine Fuels have been commingled with other bunkers on board the Vessel, the Supplier's lien shall extend to such part of the commingled bunkers as corresponds to the quantity of the Marine Fuels delivered. Where Product is supplied to a vessel, in addition to any other security, the Agreement is entered into and Product is supplied upon the faith and credit of the Vessel. It is agreed and acknowledged that a lien over the Vessel is thereby created for the Price of Product supplied and that the Supplier in agreeing to deliver Product to the Vessel does so relying upon the faith and credit of the Vessel. The Buyers if not the owner of the Vessel hereby expressly warrants that he has the authority of the owner to pledge the Vessel's credit as aforesaid and that he has given notice of the provisions of this Clause to the owner. The Supplier shall not be bound by any attempt by any person to restrict, limit or prohibit its lien or liens attaching to a Vessel unless notice in writing of the same is given to the Supplier before it sends its Confirmation to the Buyers.

In addition to the Buyers being responsible for payment of the purchase price and any costs pursuant to point 9, the Supplier reserves the right to look to the owner of the vessel to the extent the shipowner is responsible pursuant to the legislation of his homeland, and the Supplier furthermore reserves the right to safeguard himself by maritime lien or the like in the vessel to the extent that this is authorized in a jurisdiction where the vessel can be found. lt is noted that the rule concerning venue and choice of law mentioned under point 15 shall be considered unwritten in relation to the rights conferred on the Supplier according to the present point.

In the event of the Supplier electing to institute action in any competent Court the Supplier shall in addition to any other amounts it may recover from Buyers, be entitled to recover its legal costs incurred on an attorney and own client basis, from the Buyers.

12. Termination

Without prejudice to accrued rights hereunder, either party shall be entitled to terminate this contract in the event of a. any application being made or any proceedings being commenced, or any order or judgement being given by any court,

1. for the liquidation, winding up, bankruptcy, insolvency, dissolution, administration or re-organisation or similar,

2. or the appointment of a receiver, liquidator, trustee, administrator, administrative receiver or similar functionary of the other party or all or a substantial part of its assets (otherwise than for the purpose of a reconstruction or amalgamation);

b. the other party suspending payment, ceasing to carry on business or compounding or making any special arrangement with its creditors;

c. any act being done or event occurring which, under the applicable law hereof, has a substantially similar effect to any of the said acts or events described above.

d. the Supplier shall have the right to terminate this Contract in the event of a material breach (including without limitation anticipatory breach) by the Buyers of any of its terms and conditions of this Contract and/or in the event the Buyers is threatened with or is in the process of liquidation, winding-up and/or receivership.

13. Indemnity

a. Without prejudice to any other claims arising hereunder or in connection herewith, if loss is suffered or a liability is incurred by either party hereto as a direct result of compliance with directions given by the other party hereto, during or for the purposes of the parties' obligations hereunder, then the injured party is to be indemnified by the other in respect of such loss or liability.

b. Where claims arise under Clause 9(c) and Clause 13(a), compensation payable in accordance with Clause 9(c) shall be taken into account in assessing sums payable under Clause 13(a) above.

c. Buyers shall hold harmless and indemnify Supplier against all claim(s), loss(s), damage(s) and liability(s) arising from or in consequence of any acts and/or omissions of Buyers and/or its employee(s), servant(s), ships' officer(s), agent(s), representative(s) and/or crew(s) in connection with the delivery of Marine 

14. Force majeure

Neither party shall be responsible for any loss, damage, delay or failure in performance under this Contract resulting from an act of God, or the port of delivery being affected by war, civil commotion, riot, quarantine, strike, stoppage, lock-out, arrest, restraint of princes, rulers and people, or any other event whatsoever which cannot be avoided or guarded against by the exercise of due diligence. The market price fluctuations of more than 30% shall be considered to be a force majeure and may cause the Supplier's cancellation of the Confirmation note and price revisal.

 15. Safety and the environment

a. In the event of any spillage (which for the purpose of this clause shall mean any leakage, escape, spillage or overflow of the Marine Fuels) causing or likely to cause pollution occurring at any stage of the bunkering operation, the Buyers and the Supplier shall jointly, and regardless as to whether the Buyers or the Supplier are responsible, immediately take such actions as are reasonably necessary to effect clean up and which shall always be conducted in accordance with such local laws and regulations which may compulsorily apply.

b. Where it is a compulsory requirement of the Law of the port or place of delivery of the Marine Fuels that the Supplier shall have in place their own oil spill contingency plans, the Supplier shall ensure that valid oil spill contingency plans approved by the relevant authorities are in effect to the extent that is so required.

c. The Supplier hereby guarantee payment of and/or agree to indemnify and hold the Buyers harmless for any claims, losses, damages, expenses, penalties or other liabilities incurred by the Buyers under the national or international oil pollution legislation, as a result of any spillage occurring whilst the Marine Fuels are being transported directly or indirectly to or from the Vessel's manifold save to the extent that such spillage is caused by any fault on the part of the Buyers. The Buyers shall similarly indemnify the Supplier where any such spillage occurs once risk in the Marine Fuels has passed to the Buyers save to the extent that such spillage is caused by any fault on the part of the Supplier.

d. The Supplier shall use their best endeavors to ensure that the bunker supplying company is fully insured for oil spill liabilities as required by statutory rules or regulations. If such coverage or insurance is not obtained by the bunker supplying company it shall be the sole responsibility of the Supplier to establish such coverage for their account. Proof and conditions of such coverage, whether established by the bunker supplying company or by the Supplier shall be made available to the Buyers at their request, as soon as practically possible.

e. The Buyers hereby advise the Supplier that they enforce a company drug and alcohol policy aboard their ships, whereby the Supplier's personnel must not be intoxicated at any time on board. It is understood and agreed that the selling, possession, distribution, use or being under the influence of any controlled substance or dangerous drugs other than those medically prescribed are prohibited.

d. The Supplier hereby advise the Buyers that they enforce a company drug and alcohol policy in their facilities and aboard their vessels, which the Buyers' personnel must comply with while in such facilities or on board such vessels. It is understood and agreed that the selling, possession, distribution, use or being under the influence of alcohol or any controlled substance or dangerous drugs other than those medically prescribed are prohibited. In case any emergency occurs during bunker operations (spillage etc.) and some members of crew onboard Buyer's vessel found and officially proved to be alcoholic and/or drug intoxicated, then all the expenses on the damages caused shall be strictly for Buyer's account.

 16. Law and arbitration

a. This Contract shall be governed by and construed in accordance with the laws of the place indicated in the Confirmation Note and any dispute arising out of this Contract shall be referred to arbitration at the place indicated in the Confirmation Note, subject to the procedures applicable there.

b. If no place of arbitration is indicated in the Confirmation Note, sub-clause (c) of this Clause shall apply.

c. This Contract shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Contract shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim exceeds the sum of US$ 50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced. All conflicts between the Buyers and the Supplier shall be settled according to British law in the LMAA (London Maritime Arbitrage Association), apart from what is mentioned under point.