General Terms & Conditions
GENERAL TERMS AND CONDITIONS OF BUSINESS OF SLIPPSINS AKUREYRI EHF.
1.
Scope and definitions
1. Unless otherwise agreed in writing, these general terms and conditions apply in their entirety and are part of the contract that Slippurinn Akureyri ehf. (“contractor”) enters into with the buyer, or the person who orders the work (“customer”), regardless of whether a contract is concluded or what type of work is involved.
2. These general terms and conditions therefore apply to all repairs, maintenance, installations, inspections, alterations, and also new constructions constructed by the contractor, together with necessary goods and services related to shipbuilding, including, but not limited to, when a ship is berthed, towed and/or laid up, when the contractor reserves and the buyer agrees that these terms and conditions apply to the business relationship. These terms and conditions also apply to all design and construction of fish processing equipment, such as fish processing machines, conveyor belts, etc. Finally, these terms and conditions apply to all types of piping as well as all other work undertaken by the contractor.
3. In addition to the owner of the vessel (“the owner”), the owner’s representative or the master, the customer may be any company or individual designated by any of the above parties. Unless otherwise agreed in writing, the contact person or the buyer’s supervisor shall be deemed to be authorized by virtue of his position to order changes to the work, and to order additional work or services.
2.
Scope and execution of the project
1. No work shall be carried out unless specifically specified in writing. No order shall be considered binding on the contractor unless it is confirmed in writing and without notice by the contractor for the work in question. This also applies to changes to the work and additional services unless otherwise specifically agreed.
2. When the contractor and the customer have agreed on the work, the laws and regulations in force at that time or set by the government or other regulatory bodies shall apply. In that case, the agreed delivery time and price shall only comply with the rules and conditions in force at the time the customer's order is accepted. If the requirements of such laws or regulations are changed, Articles 3(4) and 6(2) shall apply.
3. It is the responsibility of the Customer to notify the authorities and relevant regulatory authorities of any repairs or modifications to the vessel, if applicable, such as to ensure that work is carried out in accordance with government laws and regulations. The Customer shall pay all costs associated with such inspections or visits by regulatory authorities and regulatory authorities.
4. The work shall be carried out in accordance with the Contractor's normal working practices. Notwithstanding this, the Contractor shall comply with all reasonable requests from the Customer in relation to the material and execution of the work as long as such requests are within the scope of the work according to the contract and the specifications in the opinion of the Contractor. Drawings, explanations and illustrations are intended for illustrative purposes only and shall not be binding in terms of details in relation to execution. Furthermore, information relating to dimensions, weight and quantity shall be considered as guidelines.
5. The contractor shall carry out the work in a normal and professional manner and use the agreed materials and equipment.
6. The contractor is free and permitted to hire subcontractors to perform the work in part or in whole without the client's consent.
7. If the material specified in the contract cannot be supplied in a timely manner, both parties have the right to demand that a new contract or an addendum to the contract be concluded, specifically stating the necessary changes that need to be made to the work and the agreed materials to be used for the repairs and/or changes.
8. The Contractor is solely responsible for the implementation of safety and security measures, as well as the implementation of laws and regulations that apply to the Contractor's activities. If the Contractor works on a project outside its premises in Akureyri and Grindavík, the responsibility for the above matters is transferred to the Customer.
9. The Contractor's employees and agents shall comply with public and local safety and security measures, laws and regulations, as well as the Contractor's procedures and instructions. The Customer shall instruct its employees and agents to follow such rules and instructions, and shall be responsible to the Contractor for doing so.
10. Apart from the ship's crew, the customer is not permitted to employ any employees for the work, other than the contractor's employees, unless the contractor has granted specific permission to do so. In any case, the contractor shall in all cases be informed in writing of the nature, scope, and time limits of the work and the work that the customer wishes the ship's crew to carry out themselves.
11. The Customer shall ensure that the supplies it orders for delivery to the Contractor's premises comply with Icelandic laws and regulations in force at any time, and shall also take note of any special requirements and rules applicable to the premises. The Customer shall be obliged to report all deliveries to the Contractor's premises.
12. The taking of fuel and the pumping of oil or water containing oil shall be subject to the Contractor's permission and shall be carried out in accordance with his instructions. Pumping shall be defined as pumping to and from the ship, as well as pumping between the ship's tanks and any other pumping operation on board the ship.
13. All fuelling and pumping shall be carried out at the customer's risk. Unless otherwise provided by law or international conventions, the customer shall indemnify the contractor for all damages and costs in connection with oil or chemical spills from the vessel, in cases where conduct has been contrary to the contractor's instructions and where the customer or his employees have otherwise shown negligence.
14. Cleaning of the vessel's tanks with chemicals, acids, or in any other way within the establishment is subject to the contractor's approval.
15. Work involving painting, such as (but not limited to) sandblasting or any other surface treatment or treatment using any other materials subject to environmental laws and regulations may only be carried out by the contractor and his subcontractors within the premises, unless otherwise specifically agreed.
3.
Delivery time
1. Unless otherwise agreed, work shall be performed during normal working hours, without overtime and as quickly as possible, taking into account other obligations that the contractor has already undertaken on the basis of the agreement. (See also the provisions of Article 4 of the Terms and Conditions)
2. If a specific time limit for delivery has been agreed, that time shall not begin to run until the day on which both parties have agreed on the scope and execution of the work and until the required advance payment or security, as the case may be, has been paid.
3. If applicable, the customer shall ensure that the vessel is available to the contractor at the time and place and in the condition agreed between the parties to the contract, so that the work can begin immediately and be carried out continuously until the work is completed. The delivery period shall not begin to run until the customer has fulfilled all of the above obligations. In the event of delays in the above obligations attributable to the customer, the contractor shall be entitled to delay the work until the conditions are met. In such a case, the agreed delivery period shall be extended by the number of days corresponding to the delay.
4. If the parties agree on changes or additional work during the execution of the work, the estimated delivery date shall be changed and a later date agreed upon, as is the case at the time, taking into account the time required for the preparation and execution of the work.
5. The contract is concluded subject to unforeseeable external events that cannot be prevented or controlled by the contractor through reasonable means (Force Majeure). Force Majeure in this sense refers to, for example, unforeseeable events within or outside Iceland, such as war or a state of war, conscription, rebellion, epidemic, fire, strike, lockout, mandatory reduction of working hours, import or export bans, trade embargoes, government actions in the field of currency and trade, delay in the delivery of parts, materials and equipment, spare parts, subcontractors' goods or services, transportation obstacles, energy crisis, removal of undeclared materials or other such materials in order to meet government requirements, damage to a ship and its parts or materials due to an accident that occurred before delivery, contractor's or subcontractor's shortage of employees, natural disasters, obstacles due to ice, storms or any other events or consequences of events that are beyond the contractor's control. Force Majeure also includes delays or delays in delivery that can be attributed to defective casting, scrap metal processing, production accidents, irregularities in operations, disruptions, fires or other causes that the contractor cannot realistically remedy.
6. In the event of Force Majeure, the Contractor shall be entitled to extend the delivery period by the number of days lost due to Force Majeure.
7. The right to extend the agreed delivery time exists even if the event causing the delay in delivery does not occur until after the agreed delivery time. Such extension, however, does not prevent liability for any delay in delivery that may have occurred before the event occurs.
8. If a specific delivery date has been agreed upon, the terms above shall apply mutatis mutandis.
9. Where circumstances arise which, in the opinion of the Contractor, will result in a delay in delivery, the Contractor shall notify the Customer thereof without delay, stating the reasons for the delay and, if possible, the Contractor shall also state the likely duration of the delay. The provisions of this clause shall also apply where no specific delivery date has been agreed.
10. If a person or persons in the service of the Client assist in the execution of the Work, the Contractor shall not be liable for any delays caused directly or indirectly by such person or persons.
11. If the contract specifies a specific delivery time or a specific delivery date and the consequences of delay have not been specifically agreed, the contractor's liability for such consequences or damage suffered by the customer is limited to the payment of a reasonable fine determined taking into account the duration of the delay and the amount of the consideration for the work, and may never exceed 5% of the agreed consideration for the work, excluding VAT.
4.
Ship registration
1. An agreement to lay up a ship is subject to the condition that the use of the berth is not necessary for other absolutely essential work during the period in question. The Contractor may give priority to his facilities to damaged ships in distress. This Article shall also apply to ships being hauled up to the facilities of the establishment.
2. The customer is obliged to have a crew on board the vessel during the recovery of the vessel and to ensure that the equipment used for the work meets the requirements set for it. If this is not done, the contractor reserves the right to charge a fee for manning the vessel with its own personnel and providing the necessary equipment to ensure the safety of the vessel and the recovery facility. If such measures are taken, they are taken in full consultation with the customer and under his responsibility, otherwise the contractor may refuse to accept the vessel into the recovery facility until the aforementioned conditions are met.
5.
Old materials and materials
1. Unless otherwise agreed, all usable material replaced during repairs – with the exception of heavy engine parts, ship propellers, drive shafts, etc. as well as unused surplus material – shall become the property of the contractor, free of charge.
2. Materials and equipment belonging to the Client shall be removed from the Contractor's premises at the same time as the work is handed over to the Client. The removal shall be carried out at the Client's initiative and at his expense. If such items are not removed within 30 days of the delivery of the vessel, the Client shall have waived his right to the items, which shall then become the property of the Contractor free of charge, unless otherwise agreed.
6.
Reimbursement
1. If the parties have not agreed on a specific price for the work, invoicing shall be made on the basis of a normal business relationship in accordance with the contractor's work and costs.
2. Unless otherwise agreed and a fee has been agreed for a specific task, additional work and ancillary work in excess of the agreed upon task shall be charged in accordance with the practices followed by the contractor in the normal course of business. If the scope of the specified task is reduced due to changes, the customer shall be reimbursed a proportionate amount of the agreed fee.
3. Additional costs for materials and supplies, and/or subcontractors' work, shall be charged as other additional work in accordance with the contractor's practices and rules, unless such costs are included in the agreed remuneration.
4. The Customer shall indemnify the Contractor for all additional costs that may arise from delays attributable to the Customer, its employees or suppliers.
5. Remuneration for work is subject to taxes and fees in accordance with Icelandic law, such as value added tax for goods and services sold by the contractor.
7.
Payment
Unless otherwise agreed in writing, the following provisions shall apply:
Skip:
1. During the execution of the work, the contractor may demand a deposit payment in the amount of approximately 75% of the consideration for the work performed at that time, according to the contractor's sole assessment. The remaining consideration will then be payable when the vessel is delivered to the customer.
2. The Contractor shall be entitled to refuse to deliver the vessel until full payment has been made by the Customer. In the event of a dispute over the amount of payment, the Customer shall be entitled to demand an adequate bank guarantee or other security for the amount in dispute against payment to the Contractor of the amount claimed. In such a case, the Contractor may not refuse delivery of the vessel. If the Contractor refuses to provide a bank guarantee for the part of the invoice in dispute, the Customer may demand delivery of the vessel against payment of the amount agreed upon by the Parties and an adequate bank guarantee or other security for the payment of the part of the invoice in dispute. The bank guarantee provided by the Customer shall be submitted to the Contractor for approval. Once the bank guarantee has been provided, the Customer shall seek arbitration under Article 16 of the Terms and Conditions within 3 months of the issue of the guarantee. If the customer fails to do so, the amount of the bank guarantee shall be made available to the contractor. If the contractor has provided the guarantee, he may demand that the customer be liable for any incidental costs. If the customer takes the matter to court, the court shall decide how the costs shall be divided between the parties.
Other works:
3. The customer shall pay 40% of the contract amount before the start of the work, no later than 3 days from the order. 55% of the contract amount shall be paid before the delivery of the work and 5% no later than 30 days after delivery.
4. Any delay in payment by the Customer shall postpone the delivery time by the corresponding number of days. The Contractor will not deliver the work until 95% of the contract amount has been paid, cf. Art. 7.3. above.
5. If installation is included in the project, the contractor's employees will handle the installation. It is the customer's responsibility to ensure that all facilities are in place so that installation can proceed smoothly.
Common provisions for ships and other works:
6. Disputes in relation to the Client's claims that are not accepted by the Contractor shall be settled in accordance with Article 7.2 as applicable.
7. The due date for payment for work performed in accordance with a quotation accepted by the customer shall be the date of delivery of the vessel to the customer. For the issuance of invoices for work on the basis of a normal business relationship (on account), which is not for an agreed fixed fee, the due date shall be 20 days from the date of the invoice.
8. If payment is not made on the due date, interest is charged from that date until payment is received in an amount equal to the default interest at that time according to the Icelandic Act on Interest and Indexation No. 38/2001.
9. If the customer does not settle his debts and invoices with the contractor within 14 calendar days of the contractor's demand for payment, the contractor may terminate the contract and claim compensation in accordance with the general rules of Icelandic law, provided that such debts existed on the date the payment demand was made.
10. A customer is not permitted to pay by offsetting debts.
8.
Delivery, transfer of risk and cancellation
Skip:
1. A vessel shall be delivered and picked up by the customer at no cost to the contractor at the contractor's quay, at the contractor's shipyard, or at a quay used by the contractor.
2. Except as provided in Article 9.2, the Contractor shall be responsible for the repairs and the materials purchased in connection with the repairs until the ship is delivered to the Customer. If independent repair works agreed upon separately are not completed simultaneously, the Contractor may deliver them all at the same time.
Other works:
3. Other works are delivered EXW. Their delivery is subject to the international rules for the interpretation of international commercial contracts (IncoTerms).
4. The work remains the property of the contractor until it is paid in full.
Common provisions for ships and other works:
5. Risk shall pass to the customer when the contractor has notified that the vessel or work is ready for delivery.
6. If the customer cancels the work after it has begun, through no fault of the contractor, all payments made by the customer to the contractor shall immediately become the property of the contractor. The customer shall then hold the contractor harmless from all damage, of whatever name, suffered by the contractor as a result of the cancellation.
9.
Tests
1. The Contractor may carry out such tests as he considers necessary to determine whether the order has been fulfilled in accordance with the contract. The Contractor may use ship's fuel, etc., at his own expense for such tests. The Contractor shall give the Customer reasonable notice of the nature and timing of such tests, and, if the Contractor so requests, the Customer or his representative shall be present when such tests are carried out.
2. During the trial period, the Customer shall bear all risk and liability for the vessel, its machinery, equipment and any damage the vessel may cause. The Customer shall also bear the risk of repairs, except for damage caused by the Contractor's error or negligence.
3. During the sea trials, the customer shall man the vessel in accordance with the rules and regulations, at no cost to the contractor. In any event, the contractor shall be permitted to have its own personnel operate the vessel's machinery.
4. The Contractor's representatives shall be authorized to carry out any inspection, measurement or observation on board the ship before and after the tests which the Contractor considers necessary for the satisfactory conduct and control of the tests. In addition, such representatives shall have access to all information on previous tests.
5. When the Contractor considers that the order and the work have been completed in accordance with the subject matter of the contract, the Customer shall be notified of this, and the Contractor may request that a time be set for an inspection of the repairs by both parties to the contract. The Contractor shall notify the Customer of this with reasonable notice and the Customer is obliged to attend such meeting.
6. At the handover meeting, any comments regarding defects in the work shall be recorded in a minutes book, and such minutes book shall be signed by both parties to the contract. Handover shall not take place until any defects that may be noted in the minutes book have been remedied.
7. When the defects referred to in the above article have been satisfactorily remedied, the customer is obliged to accept the work and accept the delivery of the work. At the request of the contractor, the customer shall sign a protocol of final delivery and acceptance in connection therewith. The provision of Article 5 above shall apply mutatis mutandis to this meeting, if it is held at the request of the contractor.
10.
Drawings etc.
1. Drawings, samples, data on weights and quantities, information on remuneration, etc. prepared or presented by the contractor shall be the property of the contractor. The customer is not permitted to use such material to the detriment of the contractor's interests. This also applies to drawings, etc. accompanying the contract. The contractor may not make drawings, samples, etc. belonging to the customer available to third parties without the customer's consent.
11.
Improvements
1. Subject to the provisions set forth below, the Contractor shall remedy any defects in repairs arising from verifiable defects in materials, workmanship or design.
2. The Contractor's obligation to remedy and other liability shall only apply to demonstrable defects which are demonstrated and reported within 6 months of delivery. The Contractor's liability shall only apply to the Contractor's work and to elements produced by the Contractor or its subcontractors (including, but not limited to, designs produced by the Contractor, designs obtained or supplied by him, or designs supplied by a person or company other than the Client or its consultants).
7. In cases where the Contractor replaces or repairs any part of the Order, a new Warranty Period shall commence for that part, subject to Clause 11.2 above. This Clause shall not apply to other parts of the Order and the Warranty Period shall only be extended by the period during which the Vessel was not usable due to the defects referred to in Clause 11.1 above. Notwithstanding the foregoing, the obligation to remedy shall not apply to any part of the repair or the repair as a whole for more than 12 months from the commencement of the original Warranty Period.
8. The same obligation to remedy applies to individual parts or materials for the repair that are not manufactured by the contractor for the contractor's own work. In cases where a more extensive obligation to remedy is imposed on a subcontractor, the contractor is permitted to assign his rights against the subcontractor to the customer.
9. In cases where the contractor receives a complaint within the time limit from the customer, cf. Article 14 of the Terms, about a defect that is subject to a remedy obligation, the contractor shall – free of charge to the customer and without delay – take measures to repair or replace what is defective or carry out the work necessary to remedy the defect. For this purpose, the customer must ensure that the ship, or the part of the ship that needs to be repaired, is available to the contractor for the time needed for the remedy.
10. When the contractor replaces defective parts or components, the old parts and components become the property of the contractor free of charge.
11. The obligation to remedy does not cover normal wear and tear, accidents or damage, or the like, which is the result of incorrect handling. The obligation to remedy does not apply if the customer does not follow the instructions of the contractor or subcontractor in connection with processing, maintenance, etc.
12. The same provisions apply to repairs due to an obligation to remedy as to original repairs and changes according to an order and a work contract, except as provided for in Article 11.3.
12.
Scope of warranty
1. In addition to Article 11 above, the Contractor shall not be liable for any damage suffered by the Client, including but not limited to damage to the vessel and/or its equipment and/or its cargo or items on board the vessel, whether belonging to the Client or a third party, unless it is proven that the damage is attributable to the Contractor's culpable conduct.
2. Under no circumstances shall the Contractor be liable for compensation for loss of profits, time, business or other consequential or indirect damage.
3. The potential liability of the contractor shall be limited to the amount provided for in the contractor's voluntary liability insurance for each incident of damage. A series of accidents resulting from the same mistake or negligent conduct shall, for this purpose, be considered as a single incident of damage.
4. To the extent that the Contractor may be liable as a result of the Customer's use of the repairs or the repaired vessel, the Customer shall indemnify the Contractor for any liability the Contractor may incur to the extent that such liability exceeds the maximum amount of Article 12.3. The Customer agrees to allow legal proceedings to be brought against it in the same court as it makes a claim against the Contractor for compensation in respect of a specific repair.
13.
Insurance
1. The Client shall adequately insure the work (subject of the contract) by means of comprehensive insurance and liability insurance, including against third party claims, while it is in progress at the Contractor's premises and facilities. The Contractor shall not take out any insurance for the work, the crew, the cargo or equipment on board (in the case of a vessel) or anything else in the possession of, or for the use of, the Client, unless the Client formally requests it in writing, in which case such insurance shall be at the Client's expense. In special circumstances, the Contractor reserves the right to purchase, for the Client's account and in accordance with the contract with the Client, additional insurance covering the Contractor's liability, if any, for damage to cargo on board the vessel.
2. The Contractor is not liable for any loss or damage for which the Customer insured or was required to insure pursuant to Article 13(1) above.
14.
Complaints and claims
1. Complaints and/or claims regarding materials or work that are not in accordance with the subject matter of the contract in the opinion of the customer must be submitted as soon as such a defect or other matter is discovered.
2. Failure by the customer to do so before delivery of the vessel shall have the effect that the contractor shall be released from all liability in connection with work performed by him, except in the case of a latent defect in material or workmanship which the customer was not or could not have discovered before delivery, and such latent defect must be reported within six months of the date of delivery, see also Article 12 of the Terms.
3. Complaints and/or claims regarding invoices must be submitted no later than 15 days from the date of issue of the invoice.
4. All complaints and/or claims must be submitted in writing and accompanied by detailed information and justification, as appropriate.
15.
Other provisions
1. The contractor has all the remedies for default that general laws and regulations allow at any time due to possible defaults by the customer, and no provisions in the contract or these terms and conditions may limit the contractor's rights in this regard.
2. These terms and conditions apply equally to repairs and alterations carried out by the contractor. Where reference is made to repairs or repair work in these terms and conditions, this also applies to alteration work and work on alterations.
3. The contractor and the client are not permitted to assign their rights under the contract and terms and conditions without the written consent of the other party.
4. The Customer shall indemnify the Contractor against the costs of all taxes and other possible charges in respect of the vessel, its operation and other matters not directly related to the activities of the Contractor's shipyard, so that payment of such charges shall be the Contractor's responsibility.
5. Changes to the contract and these terms and conditions between the contractor and the customer will only be made by written addenda signed by both parties.
6. If the provisions of these terms and conditions are incompatible with the provisions of a contract between the contractor and the customer, the provisions of the contract shall prevail over the provisions of these terms and conditions.
16.
Law and disputes
1. All disputes and disagreements between the parties to the agreement related to the work contract with these provisions shall be settled in accordance with Icelandic law and Akureyri shall be the venue for conciliation and arbitration.
2. This Agreement and its interpretation shall be governed entirely by Icelandic law. All disputes that may arise between the parties under this Agreement shall be settled by an arbitration tribunal in Akureyri, which shall consist of three members. One arbitrator shall be appointed by the contractor, one arbitrator by the customer and one shall be appointed by the District Court of North Iceland, who shall be the chairman of the arbitration tribunal. A party shall appoint its arbitrator within 10 days of receipt of notification from the other party of its decision to refer the matter to arbitration and that it has appointed an arbitrator. The commencement of the arbitration proceedings shall be based on the date on which a party receives notification from the other party of the appointment of an arbitrator. In other respects, Act No. 53/1989 on contractual arbitration shall apply to the arbitration tribunal, but that Act together with this provision shall be considered an arbitration agreement between the signatory parties. The decision of the arbitration panel shall be binding and may not be appealed to the courts beyond what is prescribed in the aforementioned laws.
3. If one of the parties to the agreement does not appoint an arbitrator, a request shall be made for the Chief Justice of the Northeastern District Court to appoint an arbitrator.
4. The Contractor may, however, bring claims before the general courts of the country in which the Customer is established or in which the ship may be located in order to obtain a final judgment to enforce the Contractor's claims.
