“30.1 Bluewater shall have the right by giving notice to terminate all or any part of the WORK or the CONTRACT at such time or times as BLUEWATER may consider necessary for any or all of the following issues: (a) To suit the convenience of BLUEWATER (b) Subject only to Clause 30.2 in the event of any default on the part of the CONTRACTOR; or (c) … 30.2 In the event of a default on the part of the CONTACTOR and before the issue by BLUEWATER of an order of termination of all or any part of the WORK of the CONTRACT, BLUEWATER shall give notice of default to the CONTRACTOR giving the details of such default. If the CONTRACTOR upon receipt of such notice does not immediately commence and thereafter continuously proceed with action satisfactory to BLUEWATER to remedy such default BLUEWATER may issue a notice of termination in accordance with the provisions of Clause 30.1.”
“Both the CONTRACTOR and BLUEWATER shall uphold the highest standards of business ethics in the performance of the CONTRACT. Honesty, fairness and integrity shall be paramount principles in the dealings between the parties.”
“It is plain from these authorities that a decision-maker's discretion will be limited, as a matter of necessary implication, by concepts of honesty, good faith, and genuineness, and the need for the absence of arbitrariness, capriciousness, perversity and irrationality. The concern is that the discretion should not be abused. Reasonableness and unreasonableness are also concepts deployed in this context, but only in a sense analogous to Wednesburyunreasonableness, not in the sense in which that expression is used when speaking of the duty to take reasonable care, or when otherwise deploying entirely objective criteria: as for instance when there might be an implication of a term requiring the fixing of a reasonable price, or a reasonable time. In the latter class of case, the concept of reasonableness is intended to be entirely mutual and thus guided by objective criteria. Gloster J was therefore, in my judgment, right to put to Mr Millett in the passage cited at para 57 above the question whether a distinction should be made between the duty to take reasonable care and the duty not to be unreasonable in a Wednesburysense; and Mr Millett was in my judgment wrong to submit that it made no difference which test was deployed. Laws LJ in the course of argument put the matter accurately, if I may respectfully agree, when he said that pursuant to the Wednesburyrationality test, the decision remains that of the decisionmaker, whereas on entirely objective criteria of reasonableness the decision-maker becomes the court itself. A similar distinction was highlighted by Potter LJ in Horkulak[2005] ICR 402 , para 51. For the sake of convenience and clarity I will therefore use the expression “rationality” instead of Wednesbury-type reasonableness, and confine “reasonableness” to the situation where the arbiter on entirely objective criteria is the court itself.”
“(a) BLUEWATER has the right to issue instructions to the CONTRACTOR at any time to do any of the following: (i) make any revision to the WORK which may include additions… … (b) On receipt of any instruction under Clause 14.1(a), the CONTRACTOR shall proceed immediately as instructed.”
“Site Instructions shall be submitted on a sequentially numbered SI form as indicated in Attachment 8D. The instruction shall reference the applicable documents and shall have a copy of these documents attached. Site Instructions shall be endorsed by CONTRACTOR and returned to BLUEWATER within one (1) working day after receipt.”
“In the beginning of this week we discovered that a number of timesheets were incorrect. Therefor [Bluewater] and [Mercon] refused to sign them. From that moment came the reaction from ASPO, slowing down the work Supervision of ASPO told their workers that they are unable to pay their workers because Peter vd Brule from [Mercon] is not signing the timesheets.”
“You don’t have right to delay the payment of works according to the specified stages because of dissatisfaction with the completeness of any additionally provided information. We consider the deductions of payment of unpaid invoices as the rigid non-fulfilment of contract conditions.”
“Please explain why Mercon delays in payment of invoices and makes the payment not in full volume. All issues concerning amounts under the contract should have been solved within 10 days since the date of invoice issuing. Voluntary deductions don’t conform to the contract. We should inform you that the present situation can negatively influence on the progress chart under the contract. In case you don’t fulfil your obligations under the contract we will have the same attitude towards fulfilment of our obligations under the contract, we will decrease the scope of provided services for the amount of your deductions.”
“It is the third time you are requested to effect full payment of invoices otherwise we will have to reduce the services proportionally to payment”
“According to ASPO, this was promised by Peter in order to prevent delay. I made it clear that our financial department could not see that stated in the contract and therefore did not pay. The financial man here was able to understand this, but not the project manager because he had made an agreement with Peter. Here I promised to try to convince you to pay this. Herewith, therefore. Indeed, I think that it would be good to pay this invoice because it was promised. It would also be good for me in order to use it to generate a bit of goodwill. Although they were not very happy that I was only going to stand up for this small invoice.”
“Our site staff has informed us around 11:30 (NL-time) of the fact that ASPO has disconnected the telephone and internet lines at our and your site offices… So far, rumours are that the none [sic] acceptance of invoices from ASPO, and the resulting refusal to pay, is the cause for the present situation.”
“Please instruct Mercon formally to execute this work confirming compensation of cost and awarded Extension of Time. Mercon will execute the defined test upon your instruction…”
“possible cause, payment problems.”
“Dispute on VO-008: Time Impact: NIL Not acceptable to [Mercon]. [Mercon] threatens discontinuation.”
“Could you send me a copy of the rotation test procedure of the turntable, which Bluewater and RRMS signed off? Bluewater needs this report today in connection with the handover to Lukoil. I understand that previously Mercon had refused to issue this report but I am assuming that this has now been resolved. Before I present the report to Bluewater, I will also liaise with Ron about it.”
“Sirs, indeed prepare before handover, i.e. ensure that this document is available, but for the time being there will be NO handover. This means look, look, but not buy and so not get! After the discussions (NL), we will decide whether to hand over. I would therefore like to leave the possibility open of saying, “Regrettably, we are not ready for handover yet.”
“Lastly, you must get it into your heads that we are NOT completing. We are only reporting that we have achieved C6. Now we must first obtain EoT and a modification of C9 before they are able to offer to Lukoil.”
“This list is split-up in the following types of activities: (1) Punch-list items; those elements of the original scope which formed part of the WORK at the time of agreement on the Recovery Schedule submitted in December 2007, and could have been completed on the 18th of December 2008. (2) Bluewater delayed activities; those elements of the original scope which formed part of the WORK at the time of agreement on the Recovery Schedule submitted in December 2007, and which could not be completed on the 18th of December 2008 due to unavailability of required materials or information to be provided by Bluewater. (3) Storage activities; those activities required to allow due care & custody during the storage period as instructed per Bluewater letter 1-0445-0-S001BES-MSSL- 396, dated the 29th of August 2008. (4) Late instructed activities; those activities which were instructed after agreement on the Recovery Schedule submitted in December 2007, which are not completed on the 18th of December 2008, and for which no Extension of Time has been received per the 18th of December 2008. (5) Not instructed activities; those activities of which Mercon was made aware by the Bluewater site team, which are not completed on the 18th of December 2008, and which have not been instructed per the 18th of December 2008.” (1) Punch-list items; those elements of the original scope which formed part of the WORK at the time of agreement on the Recovery Schedule submitted in December 2007, and could have been completed on the 18th of December 2008. (2) Bluewater delayed activities; those elements of the original scope which formed part of the WORK at the time of agreement on the Recovery Schedule submitted in December 2007, and which could not be completed on the 18th of December 2008 due to unavailability of required materials or information to be provided by Bluewater. (3) Storage activities; those activities required to allow due care & custody during the storage period as instructed per Bluewater letter 1-0445-0-S001BES-MSSL- 396, dated the 29th of August 2008. (4) Late instructed activities; those activities which were instructed after agreement on the Recovery Schedule submitted in December 2007, which are not completed on the 18th of December 2008, and for which no Extension of Time has been received per the 18th of December 2008. (5) Not instructed activities; those activities of which Mercon was made aware by the Bluewater site team, which are not completed on the 18th of December 2008, and which have not been instructed per the 18th of December 2008.”
“Fabrication of all components in the Netherlands has been completed as well as fabrication of all components as ASPO. Only equipment delayed by the customs clearance of Lukoil still needs to be fitted and tested where required. … [Bluewater] invited Lukoil to attend the delivery of the EQUIPMENT (SYMS Components) at ASPO in Astrakhan and sign a CERTIFICATE OF RELEASE FOR TRANSPORT (ready for Load Out) with a small punch list. Lukoil refused to do so.”
“MERCON have neither executed nor completed major elements of the Scope of WORK related to Key Milestone C6, such as: 1. Weighing of the SPM SYSTEM in accordance with the provisions of the Contract; 2. Preservation of the SPM SYSTEM; 3. Testing of the watertight floor; 4. SAT-testing of the winch foundations; 5. Follow up and execution of several NCR’s as issued by BLUEWATER. BLUEWATER consider that these major elements of the Scope of Work, whether completed or not, can not be regarded as Punch List items.”
“Furthermore, BLUEWATER remark that BLUEWATER cannot accept the differentiation as applied by MERCON in their letter –L-314. Instead, BLUEWATER request that MERCON duly complete the WORK without differentiation.”
“Mercon requires confirmation of addition of these elements of work to the scope, confirmation of entitlement to financial compensation, entitlement of extension of time for key date C6 and agreement on the value of the referred activities, before the referred activities can be executed.”
“1) He cannot permit to [Bluewater] [guys] to be in ASPO and all [Bluewater] passes will be blocked until decision from Mr Marisov… 2) Sea fastening suggestion for the steel plates not under translation and during today Vlad will send to us, but without invoice, as [said] to me Ryzkov agreement between Bank and ASPO concerning Mercon payments been finished in the end of last year, when your main contract been finished and for the prolongation of this agreement Bank need to have signed additional agreement between ASPO and [Mercon]. ASPO tomorrow will send concept of this agreement to [Mercon] for signing, and asked to send back as soon as possible.”
“[Mercon] first wants to see money and time before they carry on with the yoke hinge and other items, which, as far as they are concerned, do not fall under [Scope of Work], such as yoke hinge/paint/preservation.”
“Outstanding payments with ASPO: solved.”
“This additional agreement is needed for bank in order to prolong transaction certificate of this contract, otherwise we are not able to act under the terms of the contract without this agreement.”
“1. Completion Key Milestone C3 before completion of Key Milestone C6; 2. Completion of Key Milestone C6: 2.1 Outstanding WORK (Weighing, Preservation, Testing Watertight Floor, SAT Testing Winch Foundations, Execution of NCR’s, Yoke Hinge); 2.2 Punch List Items.”
“Today morning Mr Marisov invited me to his office and asked about payments news, I told, that Jasper is working on it in Holland and after that he said that he want to have today a speakerphone meeting with Ron de Jong and Willem Griffioen regarding payments. Can you please find out, this is possible or not, and if possible at what time”
“We ask your confirmation that the referred instructions entitle [Mercon] to financial compensation and extra time for the related activities. Mercon will detail the referred cost and durations when available. The extended or additional durations will be incorporated in the Master Schedule where after our entitlement for Extension of Time will be determined. We request your confirmation in order to allow preparation and scheduling of the associated activities.”
“It is considered that MERCON is in default of its obligations under the Agreement by reason both of its failure to complete the work items identified on the OUTSTANDING WORK LIST (as amplified in the list at Annex 1, which includes work items related to key date C3 which remain to be completed notwithstanding the confirmation given by Michiel Pors and in respect of which MERCON is also in default), and by reason of its noncontractual and unjustified refusal to do so unless BLUEWATER agrees additional compensation and extra time.”
“This identification is to be read together with the updated list at Annex 1 and the C3 and C6 items included therein are deemed included in the identification of the items in respect of which MERCON is in default. This letter is intended to take effect as a Formal Notice of Default given under and in accordance with Clause 30.2 of the Agreement. If MERCON does not immediately commence and thereafter continuously proceed with actions satisfactory to BLUEWATER to remedy the identified defaults BLUEWATER will be entitled to issue a Notice of Termination in accordance with the provisions of Clause 30.1 of the Agreement, and it will issue such a Notice if within 7 days of the date hereof MERCON has not remedied its default by completing to the satisfaction of BLUEWATER all work items related to key date C6 as set out above and as those are amplified in the updated list at Annex 1.”
“In fact today, the 25th of January we continue the completion of work in Astrakhan.”
“Bluewater have come to know that ASPO ceased all WORK with [Mercon] due to the fact that in contradiction with an agreement reached between ASPO and [Mercon] on23 JAN 2009 , as of26th January 2009 [Mercon] have neither issued payment nor any proof of such a transaction confirming that outstanding invoices including RFVAT, up to and including December 2008 had been paid (approx.. 2.6Mio).”
“Checked why still not more work is done by ASPO, according to [Mercon] Timur, they first need to receive outstanding payments.”
“If MERCON does not immediately commence and thereafter continuously proceed with actions satisfactory to BLUEWATER to remedy the identified defaults BLUEWATER will be entitled to issue a Notice of Termination… if … MERCON has not remedied its default by completing to the satisfaction of BLUEWATER all work items related to key date C6 as set out above and as those are amplified in the updated list at Annex 1.”
“CONTRACTOR shall safely and with due diligence perform Work as set forth herein on a continuous basis until completion and acceptance by BLUEWATER.”
“The weights of all components are critical for early assessment of the SYMS during the installation phase and reliable and accurate weight reporting, taking account of items such as weld volume and paint, is therefore essential. … (1) The final weight and centre of gravity (COG) shall be confirmed from the results of the physical weighing. CONTRACTOR shall comply with the requirements of the SYMS Weighing Specification, Doc No. RUSA-JBE-N1-JS-64900-4014.”
“CONTRACTOR shall carry out weighing of those parts/components in accordance with the requirements of the SYMS Specification Weighing.”
“The number of weighings for each assembly shall be two (2), as follows: 1. When the structural steelwork has been erected or when the assembly is structurally stable. 2. Immediately before load-out.” (2) By Section 2.11, Load Cells, that: “The weighing system shall consist of electronic strain gauge load cells. Other types of load cells may be used if approved by COMPANY. The load cells shall be equipped with a spherical seating, or equivalent, in order to minimize horizontal forces.” (3) By Section 2.13 that: “The jacking system employed in the weighing must produce uniform vertical movement at all weighing points. The jack shall be double acting. For assemblies below 500 tonnes a single acting jack may be used. The assembly weight must be directly applied to the load cells, either by jacking up and lowering onto the load cells (load cells adjacent to jacks) or by jacking the load cells up to the assembly and then lifting (load cells on top of the jack or inside the hollow of the jacks). When the load cells are positioned adjacent to the jacks the assembly must be lowered smoothly and uniformly onto the load cells. This method of jacking/weighing shall be used only for smaller assemblies below 500 tonnes.” (4) By Section 2.14 that: “Each individual load cell shall have a measurement uncertainty better than ± 0.5% of rated capacity. The measurement uncertainty of the weighing system as a whole shall be within ± 1.0% of actual weighed weight.” (5) By Section 2.19 that “For each weighing operation a minimum of three (3) lifts/weighings/readings are required.”
“Originally [Mercon] has anticipated to weigh the substructure with the weighing system of the Crane “Volgar” at Load out. Together with a weight control report with theoretical weights and COG this was considered sufficient. With the current 800T mooring load design the COG will not be in line with the central column due to the fifth leg. To determine the COG 5 individual load cells are required and weighing with crane Volgar is not possible any more.”
“Weight Control report issued by [Bluewater]….[Bluewater] Weight Control procedure and Weighing Spec. (RUSAJBE-N1-JS-64900-4014) still missing (section 3 – item 5.13).”
“At the same time I would like to draw your attention to the fact that the construction of the fabricated support foundation does not provide installation and usage of the equipment needed for weighing of SYMS construction. At our meeting with [Mercon] Representatives on 20.11.2007 it was pointed out that weighing with the equipment of f/c Volgar is not acceptable for [Mercon] and [Mercon] was to provide information of weighing method to ASPO, though ASPO has not received that yet.”
“At no occasion have BLUEWATER formally waived the requirement, as stipulated in the Contract, that weighing of the SPM SYSTEM is no longer required. The statement of MERCON is therefore considered incorrect.”
“MERCON have neither executed nor completed major elements of the scope of WORK related to Key Milestone C6, such as: (a) Weighing of the SPM SYSTEM in accordance with the provisions of the Contract;…”
“The weighing of the structures in Astrakhan before load-out, has been proposed during our tender and included in our contract to be executed during load-out with the ‘Volgar’ by using the load-cells in the system of this crane vessel. The delayed load-out forces us to execute this scope element in June 2009 when completing milestone C9. We conclude that this scope element cannot form part of the milestone C6 scope.”
“painting shall not be completed in the open air during periods of rain, snow, fog or mist and also shall not be attempted when the weather conditions may cause condensation and flash rusting”
“I spoke with Ryzkov today morning concerning it, and showed him excel sheet with all remaining paint work, which we need to finish as soon as possible. But he said, that we can not make any plannings concerning works, which are not in the main contract before receiving all debts from [Mercon] and signing additional agreement. He said also, that is Marisov decision and we can not change it, we must to close main contract, to sign additional agreement, to receive depts. And only after that we will make plan for painting and for other additional works.”
“Winch Function Test CONTRACTOR shall perform a winch function test in which the winch wire shall be routed through the various rigging arrangements. CONTRACTOR shall submit the winch function test procedure to BLUEWATER Representative for approval a minimum of eight (8) weeks prior to execution of the test.”
“1) Proforma Invoices … As already discussed only the fire and gas detectors have been imported on a temp. basis the value for this cargo should be the same as at the time [of] import as well as description [etc] … 3) BOL Because the Gas and fire detectors are mounted on the structure you will not be able to issue a separate BOL for this. In fact there is no requirement to issue a BOL for this. …”
“In our opinion there are 2 options i.e 1 Inform Lukoil about this matter, issue new documents and hope that the situation can/will be corrected. Most probably Lukoil will use this as an argument to pass on any delays on to us and create a lot of problems. 2 On paper load the detectors in a container, keep the documents as submitted, pretend nothing has happened and hope for the best. If at a later stage the detectors are not found to be in the container, investigate matters, apologise and hope that it can be corrected. In any case the vessel by then would have departed. For the moment, we believe that option 2 is probably the best. It could create problems, however not certain if this will be the case, making sure that the vessel will not be delayed.”
"Last Friday, 12-SEP-2008, BLUEWATER understood from MERCON that certain items (Flame Detectors) have not been shipped, despite the fact that [Mercon] had confirmed that these items were on board. Moreover based on documents and pieces of advice as received, these short shipped items have already been declared with Russian Custom authorities upon arrival of the vessel in St. Petersburg. BLUEWATER find this most disturbing, as the consequences for potential delays in Astrakhan could be severe. Moreover, at this stage BLUEWATER cannot determine what other consequences BLUEWATER or their Clients might face, resulting from this matter. On several occasions BLUEWATER have underlined the importance to MERCON of a meticulous and precise administration of the cargo to be shipped in order to avoid any discussion with our Clients and/or problems with the Russian Custom Authorities. This is, and always has been, of the utmost importance. MERCON will understand that for the moment BLUEWATER have no other option than holding MERCON fully liable for any and all consequences that might result from this short shipment. In addition to the aforementioned, BLUEWATER are under the impression that MERCON are showing more and more reluctance to co-operate with BLUEWATER in order to issue the required documentation i.e. Certificate of Origin, shipping document, etc. despite BLUEWATER initial instructions for documents with exact specifications. These documents form the basis of [Bluewater] documents which, in turn, will be used by BLUEWATER Client for the Customs clearance of the cargo on board Ms. A. Marinesko. By means of this letter BLUEWATER formally request MERCON to fully co-operate as precise and quickly as possible in order to provide BLUEWATER with all the necessary, true, accurate and correct documents as soon as possible."
“BLUEWATER hold MERCON fully responsible for adverse impacts, should these arise and cannot be mitigated, as previously notified to MERCON.”
“Moreover, BLUEWATER has demanded from MERCON to be the party verifying and releasing the Bill of lading for use with the second shipment. By means of its approval, BLUEWATER has taken responsibility for the contents of the Bill of lading. MERCON now has to conclude that BLUEWATER missed the referred discrepancy while checking and approving the Bill of Lading despite the knowledge it should have had that six detectors are destined for Baku and that the Flame Detectors installed on the Crane Structure in accordance with BLUEWATER’s design, would remain in Gorinchem. Per L-474 BLUEWATER commits to assisting MERCON in this matter, MERCON however is not actually importing the cargo. In turn MERCON will of course do its utmost to assist BLUEWATER in correcting the paperwork used for the preliminary customs declaration. MERCON is willing to put effort in preparing a revision of this Bill of Lading as was done for the first shipment with the 1kg discrepancy between documents.”
“As already discussed with Maurice, the items still at MSS (4xflame detectors, 2x gas detector) are going to be delivered separate because Lukoil doesn’t want to do the declaration again. So we also need to take them of the packing list. Please inform how we are going to deliver them???”
“Lukoil have seen the two flame detectors which should already have been here on the previous ship. According to me it’s part of the structure and declaration is already done. According to them this is a BIG problem, they didn’t inform me how we could solve this.”
“Completion and acceptance of Fabrication Drawings of complete Central Tower, including Mooring Turntable, Pig Receiver Deck, Hose Turntable, Yoke Arm and Ballast Tank.”
“The seller must provide the buyer at the seller’s expense the delivery order and/or the usual transport document (for example a negotiable bill of lading…) which the buyer may require to take delivery of the goods in accordance with A4/B4”
“B/L should read: 1 lot stc (said to be) 11 packages: 1 column and 10 pipes.”to which Mr Hoep responded:“Is this an advice? Or a question. What I see on the B/L about 1 lot equipment as per con…, does this come from Bluewater? Or is this something Flinter likes to see on it?”
“I adjusted the invoice for Astrakhan (without winches) to the new weights. Can you then use this also for the B/L? and “I hope somehow that everything is now right, but I am ready for the next list with questions.”
“This is to inform you that the a.m vessel is not able to sail today from Gorinchem. This is because of the fact the orig. B/L’s for the cargo loaded in Rostock for Astrakhan had to be amended according to your latest instructions.”
“I am astounded and have now been obliged to accept that the planned load out of the ship was not started on Saturday and cannot proceed any further on Monday (morning) either. This causes us some substantial financial loss and delay to the project.”
“5. Where does stop [Mercon] responsibility for the machining of structural components? For instance, the bronze rings (free-issued by Bluewater) are rough or fine machined? [Mercon] need to provide only the machining of the structural steel. Bronze bearings will be free-issued final machined, ready to install in the structure.”
“Ring thick 195mm as shown on drw. M-2326 will be machined by [Mercon] from plate thick 210.”
“9.25 Lack of progress with respect to machining activities (Yoke Hinge Casting).”
“[Bluewater] explained to [Mercon] that all details concerning machining were made available to [Mercon] before X-mass 2007 including the delivery of the main yoke casting to [Mercon]. [Mercon] has waited 3 months before starting the subcontracting process.”
“We are very concerned about the delayed subcontracting of the machining works for Yoke Hinge Assembly by [Mercon], furthermore we are surprised receiving such e-mail from [Mercon] at this stage of the project. Please note that the [Mercon] notification is far too late, [Mercon] to indicate in detail what they have done to mitigate so far. Note that the Yoke Hinge Casting is already at [Mercon] since before Xmas sufficient complete with documents allowing [Mercon] to shop around to subcontractors at that time when sufficient lead time was still available. • We have noted that [Mercon] have not done anything with the yoke hinge casting since its arrival at [Mercon] before Xmas. • We have noted that [Mercon] have not done anything with the yoke hinge document indicating the machining scope of work, that were issued before Xmas. • We have noted that [Mercon] started with the subcontracting process not earlier than March 2008.” • We have noted that [Mercon] have not done anything with the yoke hinge casting since its arrival at [Mercon] before Xmas. • We have noted that [Mercon] have not done anything with the yoke hinge document indicating the machining scope of work, that were issued before Xmas. • We have noted that [Mercon] started with the subcontracting process not earlier than March 2008.”
“Mercon herewith informs Bluewater that the third vessel is expected to arrive in Gorinchem on the 10th of September. Despite earlier discussion and schedules we are strongly advised by our forwarding company to leave Gorinchem latest week 38 because of possible weather condition influence. These influences can have enormous impact on both cost and schedule. Departure of the third vessel is now expected the 19th of September.”
“BLUEWATER are extremely concerned by lack of progress, lack of confirmations and lack of information from MERCON’s side in consideration of MERCON’s notice that ETA of Ms Professor Kerichov or sister vessel at MERCON in Gorinchem was confirmed at25 SEP 2008 on19 SEP 2008 . Since19 SEP 2008 , MERCON has not been forthcoming with alternative details nor further confirmations. Now, being24 SEP 2008 , BLUEWATER understand from MERCON that no further information and confirmations regarding the Third Vessel can be made available until an undisclosed date, which is unsatisfactory and unacceptable to BLUEWATER.”
“Jacket and Pile pre-fabrication and preassembly complete, tested and precommissioned, accepted by BLUEWATER’s Representative and Certifying Authority, ready for Integration with SYMS PreAssemblies ex.Gorinchem”
“(i) actions by the employer which are perfectly legitimate under a construction contract may still be characterised as prevention, if those actions cause delay beyond the contractual completion date. (ii) Acts of prevention by an employer do not set time at large if the contract provides for extension of time in respect of those events.”
“Liquidated damages for late delivery shall finally be calculated over the last milestone, being Key Dates C9 or C12 respectively, achieved by the CONTRACTOR and delays and liquidated damages on previous milestones shall then be disregarded.”
“If CONTRACTOR fails to complete any of the items listed in the SCHEDULE OF KEY DATES in accordance with the relevant date included therein and/or fails to achieve the requirements of the CONTRACT in respect of any other items listed in Section 4 – Schedule of the Work, the CONTRACTOR shall be liable to BLUEWATER for Liquidated Damages. The amounts of such Liquidated Damages shall be as follows: a) For late delivery of any and all individual elements as detailed in the SCHEDULE OF KEY DATES (Attachment 4A to Section 4), the amount of Liquidated Damages per calendar day shall be:….”
“On a true construction of the Contract, including clause 17.9 of section 2A, clause 2.1 of section 5 and the detailed price breakdown in attachment 5B, the Claimant is entitled to make deductions from the Contract Price and/or the Contract Price is not payable if and insofar as Work was not in fact done as required by the Contract. From a practical perspective such deductions are necessary primarily in relation to lump sum elements of the Works which were to be reimbursed through payments for the completion of Key Milestones.”
“It should further be noted that an abatement is available only for defective performance. In a number of cases, Bluewater is claiming a rebate for work included in the price but which, for its own reasons, it asked Mercon not to carry out. It is not entitled to an abatement, although for a few such cases Mercon has agreed a rebate as a concession.”
“(1) In a contract for the provision of labour and materials, where performance has been defective, the employer is entitled at common law to maintain a defence of abatement. (2) The measure of abatement is the amount by which the product of the contractor’s endeavours has been diminished in value as a result of that defective performance. (3) The method of assessing diminution in value will depend upon the facts and circumstances of each case. (4) In some cases, diminution in value may be determined by comparing the current market value of that which has been constructed with the market value which it ought to have had. In other cases, diminution in value may be determined by reference to the cost of remedial works. In the latter situation, however, the cost of remedial works does not become the measure of abatement. It is merely a factor which may be used either in isolation or in conjunction with other factors for determining diminution in value. (5) The measure of abatement can never exceed the sum which would otherwise be due to the contractor as payment. (6) Abatement is not available as a defence to a claim for payment in respect of professional services. (7) Claims for delay, disruption or damage caused to anything other than that which the contractor has constructed cannot feature in a defence of abatement.”
“Extended Delivery Date: BLUEWATER can accept the proposal by MERCON for a reduction of EUR 300,000.00 (excl. VAT) due to the fact that management by ASTRAKHAN KORABEL will not be required, since MERCON shall manage the Works at ASTRAKHAN KORABEL.”
“The rule excludes evidence of what was said or done during the course of negotiating the agreement for the purpose of drawing inferences about what the contract meant. It does not exclude the use of such evidence for other purposes: for example, to establish that a fact which may be relevant as background was known to the parties, or to support a claim for rectification or estoppel. These are not exceptions to the rule. They operate outside it.”
“The conclusion I would reach is that there is no clearly established case for departing from the exclusionary rule. The rule may well mean, as Lord Nicholls has argued, that parties are sometimes held bound by a contract in terms which, upon a full investigation of the course of negotiations, a reasonable observer would not have taken them to have intended. But a system which sometimes allows this to happen may be justified in the more general interest of economy and predictability in obtaining advice and adjudicating disputes. It is, after all, usually possible to avoid surprises by carefully reading the documents before signing them and there are the safety nets of rectification and estoppel by convention.”
“As per the contract, all welding procedure specifications for the above mentioned project shall be based on Previously Qualified Welding Procedures as be used on the AIOC – Azeri project…”
“that if welding procedures are being carried out in accordance with a schedule or rates then in standard industry practice the rate for a new WPQ would include the cost of the pWPS, and generation of a new WPQ would include the writing of the WPS derived from it for that project.”
“As a matter of general principle, we agree that Mercon’s entitlement to payment from Bluewater under this claim is limited to (a maximum of) the value of the invoices which it actually paid to ASPO (i.e. before consideration of the merits of the relevant invoices and any further issues (if any) as to what credit Bluewater may be entitled. That is to say, it is not entitled to recover payment for invoices which it did not pay, although the position on mark-up requires separate consideration.”
“mobilisation and demobilisation of the assembly site”
“we remain uncertain as to what amounts may be due to Mercon”
“the supervisor writing the time sheets has a fantasy over the number of men on the job and is a master in creating time sheets with inflated hours” and that the job was “flooded with men”
“Mercon therefore requests ASPO to provide full backup for the costs made regarding Assembly of SYMS foundation. The already invoiced and paid amounts concerning PM2.1, PM2.2 and PM2.3 are prepayments and will be settled with the reimbursable basis.”
“In summary: we will pay today all due amounts deducting the€600.000 paid for scope element 2 (Assembly of SYMS foundation). As a result, scope element 2 is now considered unpaid and all invoices in attached overview are considered paid except for the remaining contractual 20% of invoices 36, 49, 50, 53, 69, 70 and 71.”
“When a debtor is making a payment to his creditor he may appropriate the money as he pleases, and the creditor must apply it accordingly. If the debtor does not make any appropriation at the time when he makes the payment the right of application devolves on the creditor.”
“All welders and welding operators shall [be] successfully qualified in accordance with … and certified by an independent inspection authority.”
“All welders and welding machine operators engaged on structural welding shall be qualified prior to commencement of the work in accordance with AWS D1.1 and the requirements of this specification”
“The rates for office facilities shall be inclusive of all normal office supplies, consumables, computer facilities and telephone.”
“For shipment arrangements for the main structure (top sides) we require confirmation of the following data: - total height of main structure to be shipped: 12,5m?”
“What I need to know from you is following: - All transport restrictions and bottlenecks on route (southerly and northerly, including preference) from Gorinchem to Astrakhan – to be able to double check/verify with Mercon; - Maximum permissible shipping dimensions of EQUIPMENT (transport envelope) – required as input to project/design engineers;…” - All transport restrictions and bottlenecks on route (southerly and northerly, including preference) from Gorinchem to Astrakhan – to be able to double check/verify with Mercon; - Maximum permissible shipping dimensions of EQUIPMENT (transport envelope) – required as input to project/design engineers;…”
“Presently Northern route is more cost competitive and popular but contractors leave option open which way to go when transport is due. Southern route has 18 locks (Northern route 16) and the tendency to cause severe delays. Cargo dimension restrictions Max height either way (North or South) is 14.0 mtr. This includes transport equipment (vessel is approx. 3.5mtr and barrage approx. 1.5mtr). In extraordinary cases it is possible to arrange passage of objects with max height of 15.2mtr from water level. In such case high voltage power line is to be switched off.”
“Building a more complete Topside in Gorinchem, less handling and cranage in [Astrakhan] and developing 3 to 4 months extra time in the Gorinchem planning, because Topside can be shipped with the second transport to [Astrakhan], arriving just before the load-out and handling of the base in [Astrakhan].”
“construction-transport and installation and welding offshore it is more efficient to position the weld between substructure and static column at a position approx. 1 meter below the mooring turntable deck framing at approx. El +30560. The weld in then positioned higher above the waterline and wave-action. This is to install static column with pig receiver/Hose Deck and turntable deck framing in one lift as intended.”
“From base the design in the contract and Method Statement we considered that the topside would be a transportable unit in one [piece] and the only item to be assembled in [Astrakhan] was the bolted on crane. The design has changed dramatically into a substantial size module which is with special effort and additional handling in St Petersburg still likely to be transported as one unit. With your reply to the technical query it becomes likely impossible to transport this to [Astrakhan] as one unit and consequently scope will have to be transferred to the [Astrakhan] year which was originally intended to be performed in Holland. This implicates that either we have to mobilise Dutch Subcontractors to [Astrakhan] or transfer scope to [Astrakhan] with consequence of all kind of interface and management problems we would like to avoid and to prevent [Bluewater] with the consequences. We strongly suggest reconsidering your reply.”
“1. [Bluewater] will decide about the final cutting line in the main column week 39. To achieve the requested transport height a max. length of 2 mtr under the turntable is acceptable. 2. [Bluewater] will study the possibilities to make a separation in the topside to achieve a max transport height of 10 mtrs.”
“As discussed by telecon [Mercon] cost due to transport changes in design and fabrication remain for [Mercon]. Extra engineering cost by [Bluewater] for [Bluewater] account.”
“Herewith [Mercon] confirms our agreement about split of costs.”
“Should mark-up be added to Star Rates for non-local personnel working in Astrakhan, where the labour rate is derived from Attachment 5C1?”
“None of the terms and conditions of the CONTRACT shall be considered to be waived by either BLUEWATER or the CONTRACTOR unless a waiver is given in writing by one Party to the other. No failure on the part of either Party to enforce any of the term and conditions of the CONTRACT shall constitute a waiver of such terms.”
“14.3 (a) If the CONTRACTOR considers that an occurrence has taken place for which it is entitled to receive a VARIATION, the CONTRACTOR shall request without delay in writing that BLUEWATER issue a VARIATION. Any such request shall include details of the occurrence including any relevant dates and the Clause or Clauses of a Contract under which the CONTRACTOR considers itself to be entitled to a VARIATION. (b) If the CONTRACTOR fails to submit requests for VARIATIONS in accordance with Clause 14.3 (a) when it considers or should reasonably have considered than an occurrence has taken place for which it is entitled to receive a VARIATION and/or fails to provide supporting estimates in accordance with Clause 14.1, the CONTRACTOR shall, at the sole discretion of BLUEWATER, forfeit any right to receive such VARIATIONS and any rights concerning adjustment to the CONTRACT PRICE and/or SCHEDULE OF KEY DATES. ... 14.4 Within Seven (7) days of having been requested by BLUEWATER in accordance with Clause 14.2 (a) or the CONTRACTOR having requested a VARIATION in accordance with clause 14.3 (a) (or within such longer period as BLUEWATER shall agree to be reasonable for any specific VARIATION) the CONTRACTOR shall submit to BLUEWATER fully detailed estimate prepared on the basis as directed by BLUEWATER. Such estimates shall include, however, shall not be limited to: (i) a description of the work to be varied under the VARIATION; (ii) a detailed schedule for the execution of the VARIATION showing the resources to be employed; (iii) the effect (if any) on the CONTRACT PRICE; (iv) the effect (if any) on the PROGRAMME and SCHEDULE OF KEY DATES. … 14.7 Disputed or outstanding VARIATIONS (a) If at any time the CONTRACTOR intends to claim any adjustment to the CONTRACT PRICE and/or SCHEDULE OF KEY DATES additional to that previously determined by BLUEWATER for a VARIATION issued by BLUEWATER or requested by the CONTRACTOR, the CONTRACTOR shall give notice in writing of such intention without delay after the occurrence giving rise to such claim. Such occurrence shall include but not be limited to the following: (i) rejection by BLUEWATER of a request for a VARIATION made by the CONTRACTOR; (ii) any VARIATION where effect on CONTRACT PRICE and/or SCHEDULE OF KEY DATES cannot be determined at the time; (iii) outstanding VARIATIONS in accordance with Clause 14.1 (c). In case of any such occurrence the CONTRACTOR shall keep such contemporary records as may reasonably be necessary to support any claim it may subsequently wish to make. (b) For any such notice of claim the CONTRACTOR shall keep daily time and material records or further contemporary records as the case may be material to the claim, copies of which shall be supplied to BLUEWATER REPRESENTATIVE on a daily basis. These records may be signed by BLUEWATER REPRESENTATIVE, however, shall at any time be deemed to be signed for receipt only, without confirming correctness or accepting any liability, at that time. (c) The CONTRACTOR shall send to BLUEWATER at the end of every month an account giving particulars, as full and detailed as possible, of all such claims. (d) If the CONTRACTOR does not submit records and accounts in accordance with the provisions of Clauses 14.7(a), 14.7(b) and 14.7(c) the CONTRACTOR shall, at the sole discretion of BLUEWATER, forfeit any right to receive any adjustment to the CONTRACT PRICE and/or SCHEDULE OF KEY DATES in respect of any such claims. (e) Where any matter in respect to adjustments to the CONTRACT PRICE and/or SCHEDULE OF KEY DATES has not been finalised and without prejudice to the rights of either BLUEWATER or the CONTRACTOR, BLUEWATER having taken into account the relevant provisions of the CONTRACT and all other relevant factors, will make such adjustments as it considers to be fair and reasonable.”
“The CONTRACTOR shall not be entitled to receive a VARIATION to cover any instruction, decision or act of BLUEWATER which may be made or given in order to ensure that the CONTRACTOR complies with any of its obligations under the CONTRACT.”
“[Mercon] showed their organisation chart during the presentation and advised [Bluewater] that all key personnel will be dedicated/full-time on the project.”
“The KEY PERSONNEL shall be provided by [MERCON] and shall not be replaced without the prior approval of BLUEWATER. Any replacement shall work with the person to be replaced for a reasonable handover period.”
“KEY PERSONNEL [MERCON] shall provide the KEY PERSONNEL as listed in Attachment 9B and as indicated on the Organisation chart within Attachment 9C. KEY PERSONNEL shall be engaged in the WORK on a full-time basis, unless otherwise agreed with BLUEWATER. KEY PERSONNEL shall not be replaced without the prior approval of BLUEWATER. [MERCON] shall pay the liquidated damages specified in Attachment 9B for each replacement, unless otherwise agreed with BLUEWATER.”
“were the circumstances required by the LADs provision met?”
“It is no obstacle to the sum stipulated being a genuine pre-estimate of damage, that the consequences of the breach are such as to make precise preestimation almost an impossibility. On the contrary, that is just the situation when it is probable that pre-estimated damage was the true bargain between the parties.”
“In accordance with the provisions of the agreement, Bluewater confirm acceptance of the replacement of Mr Jordaans by Mr Leliveld as key person in the function of completion commissioning manager.”
“According to Russian Law (Articles 171 and 172 of the Russian Federation Tax Code) ASPO can file for reclamation of CUSTOM VAT. As such, BLUEWATER consider that MERCON/ASPO can not claim compensation for associated costs, which BLUEWATER have conditionally reimbursed already. As a consequence and without further information from MERCON, BLUEWATER will retain EURO 102,638.15 from future invoices of MERCON.”
“In the event of termination of all of the WORK or the CONTRACT in accordance with Clause 30.1(b) or Clause 30.1(c) the following conditions shall apply: (a) the CONTRACTOR shall cease to be entitled to receive any money or monies on account of the CONTRACT until the expiration of the DEFECTS CORRECTION PERIOD specified in Clause 29 and thereafter until the costs of COMPLETION and all other costs arising as a result of the CONTRACTOR’s default or other events giving rise to the termination have been finally ascertained; (b) thereafter and subject to any deductions that may be made under the provisions of the CONTRACT the CONTRACTOR shall be entitled to payment only as set out in Section 5 – Compensation and Payment for the part of the WORK completed in accordance with the CONTRACT up to the date of termination; and (c) any additional costs reasonably incurred by BLUEWATER as a direct result of the CONTRACTOR’s default or other events giving rise to termination shall be recoverable from the CONTRACTOR.”
“Does the agreed figure for Bluewater’s costs to complete claim represent the true overall position compared with the amounts that would have been paid to Mercon if the termination had not occurred?”
“Based on our review of the Lukoil disclosure it is apparent that none of the RFVAT claimed from Mercon was included in the payment of€915,952.51 . It follows therefore that, if Bluewater did not receive any further payment from Lukoil in respect of RFVAT, then Bluewater is not claiming any RFVAT from Mercon which has been recovered from Lukoil.”
“Bluewater were paid 48,997.79 for this invoice by Lukoil and therefore the 44,514.71 claimed as payment to Mercon is now nil and the remaining 4,483.08 of the Lukoil payment is deducted from the 48,997.79 claimed as paid to ASPO resulting in a claim of 44,514.71 remaining of the amount paid to ASPO.”
“The following is excluded from the provisional TOTAL CONTRACT PRICE, however, shall be added as appropriate to any invoice payable to CONTRACTOR: (a) INTEGRATION YARD VAT (Russian Federation VAT) at INTEGRATION YARD SPM SYSTEM…”
“For the purpose of this Clause 25 the expression “Consequential Loss” shall mean loss and/or deferral of production, loss of product, loss of use, loss of revenue, profit or anticipated profit (if any), in each case whether direct or indirect, and whether or not foreseeable at the EFFECTIVE DATE OF COMMENCEMENT OF THE CONTRACT. Notwithstanding any provision to the contrary elsewhere in the CONTRACT and except to the extent of any agreed liquidated damages provided for in the CONTRACT, BLUEWATER shall save, indemnify, defend and hold harmless the CONTRACTOR GROUP from the BLUEWATER GROUP’s own Consequential Loss and the CONTRACTOR shall save, indemnify, defend and hold harmless the BLUWATER GROUP from the CONTRACTOR GROUP’s own Consequential Loss.”