Ship Building Contract (2006)Full Document 

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SHIP BUILDING CONTRACT

(Contract Number: 1st Vessel – 06CA44S1981003

FOR

CONSTRUCTION OF ONE 2500 TEU CONTAINER VESSEL

(HULL No. YZJ2005–696C)]

Between

SEASPAN CORPORATION

as Buyer

and

JIANGSU YANGZIJIANG SHIPBUILDING CO., LTD. and

GUANGDONG MACHINERY IMP. & EXP. CO., LTD.

collectively as Seller


TABLE OF CONTENTS

 

ARTICLE I - DESCRIPTION AND CLASS    2

1.

   Description:    2

2.

   Principal Dimensions and Characteristics:    2

3.

   Classification, Rules and Regulations:    3

4.

   Registration:    4

5.

   Contract Specifications and Approved Drawings:    4

6.

   Subcontracting and New Shipyard:    4
ARTICLE II - CONTRACT PRICE AND TERMS OF PAYMENT    5

1.

   Contract Price:    5

2.

   Adjustment of Contract Price:    5

3.

   Currency:    5

4.

   Terms of Payment:    6

(a)

  

    First Instalment:

   6

(b)

  

    Second Instalment:

   6

(c)

  

    Third Instalment:

   6

(d)

  

    Fourth Instalment:

   6

(e)

  

    Fifth Instalment:

   6

(f)

  

    Sixth Instalment (the “Delivery Instalment”):

   7

5.

   Method of Payment:    7

6.

   Expenses:    8

7.

   Advance Payment:    8

8.

   Refundment Guarantee:    8
ARTICLE III - ADJUSTMENT OF CONTRACT PRICE    10

1.

   Delivery:    10

2.

   Speed:    11

3.

   Fuel Consumption:    11

4.

   Deadweight:    11

5.

   Container capacity:    12

6.

   Reductions to be Independent of Each Other:    12

7.

   Application of Adjustment:    13

8.

   Effect of Rescission:    13
ARTICLE IV - APPROVAL OF PLANS AND DRAWINGS AND INSPECTION DURING CONSTRUCTION    14

1.

   Approval of Plans and Drawings:    14

2.

   Appointment of BUYER’s Representatives:    14

3.

   Inspection by BUYER’s Representatives:    15

4.

   Rights of the Representatives:    15

5.

   Facilities:    17

6.

   Liability for the Representatives:    17

7.

   Salaries and Costs:    17

8.

   SELLER’s Obligation:    17

9.

   Replacement of the Representatives:    18

10.

   Responsibility of BUYER:    18

11.

   Information to Representatives:    18
ARTICLE V - MODIFICATIONS, CHANGES AND EXTRAS    19

1.

   How Effected:    19

2.

   Changes in Rules of Classification Society, Regulations, etc.:    19

3.

   Substitution of Materials:    20

 

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ARTICLE VI - TRIALS AND ACCEPTANCE    21

1.

   Notice:    21

2.

   Weather Condition:    21

3.

   How Conducted:    21

4.

   Method of Acceptance or Rejection:    22

5.

   Effect of Acceptance:    23

6.

   Disposition of Surplus Consumable Stores:    23
ARTICLE VII - DELIVERY    24

1.

   Time and Place:    24

2.

   When and How Effected:    24

3.

   Documents to be delivered to BUYER:    24

4.

   Tender of VESSEL:    25

5.

   Title and Risk:    25

6.

   Removal of VESSEL:    26

7.

   Notices:    26
ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE)    27

1.

   Causes of Delay (Force Majeure):    27

2.

   Notice of Delay:    27

3.

   Definition of Permissible Delay:    28

4.

   Right to Rescind for Excessive Delay:    28
ARTICLE IX - WARRANTY OF QUALITY    29

1.

   Guarantee:    29

2.

   Guarantee from Manufacturers and Suppliers:    29

3.

   Notice of Defects:    29

4.

   Extent of SELLER’s Obligation:    29

5.

   Remedy of Defects:    30

6.

   Guarantee Period:    31

7.

   Application to Defects Remedied:    32

8.

   SELLER to Remain Liable:    32

9.

   Guarantee Engineer:    32
ARTICLE X - SELLER’s DEFAULT - RESCISSION BY BUYER    34

1.

   SELLER’s Default:    34

2.

   Effect of SELLER’s Default:    35

3.

   Notice:    35

4.

   Refundment by SELLER:    35

5.

   Discharge of Obligations:    36
ARTICLE XI - DEFAULT BY THE BUYER    37

1.

   Definition of BUYER’s Default:    37

2.

   Effect of BUYER’s Default on or before Delivery of VESSEL:    37

3.

   Disposal of VESSEL:    38
ARTICLE XII - ARBITRATION    39

1.

   Decisions by the Classification Society:    39

2.

   Proceedings of Arbitration:    39

3.

   Notice of Award:    40

4.

   Expenses:    40

5.

   Entry in Court:    40

6.

   Alteration of Delivery Date:    40
ARTICLE XIII - ASSIGNMENT - SUCCESSOR AND ASSIGNS    42

 

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ARTICLE XIV - TAXES AND DUTIES    42

1.

   Taxes and Duties Incurred in China:    42

2.

   Taxes and Duties Incurred outside China:    42
ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS, ETC.    43

1.

   Patents, Trademarks and Copyrights:    43

2.

   General Plans, Specifications and Working Drawings:    43
ARTICLE XVI - BUYER’s SUPPLIES    44

1.

   Responsibility of BUYER:    44

2.

   Responsibility of SELLER:    44
ARTICLE XVII - INSURANCE    46

1.

   Extent of Insurance Coverage:    46

2.

   Application of the Recovered Amounts:    46

3.

   Termination of SELLER’s Obligation to Insure:   

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