Yellow Book 4ed 2013

Form of Contract
Subcontract
The Yellow Book
IChemE
Fourth edition
2013
ADVANCING
CHEMICAL
ENGINEERING
WORLDWIDE
Historical note
In October 1968, IChemE published the original edition of the Model The increasing use of the Forms of Contract by industry led to
Form of Conditions of Contract for Process Plants suitable for Lump the publication of the ‘Orange Book’, a minor works contract, the
Sum Contracts in the United Kingdom - the ‘Red Book’ as it came to ‘Brown Book’, a subcontract for civil engineering works, and the
be known. ‘Burgundy Book’, a stand-alone target cost contract.
This publication proved highly successful and IChemE then In response to the growing use of the series on projects outside
undertook the preparation of a companion form suitable for reim- the UK, an international version of the Forms of Contract series was
bursable contracts, which was published in June 1976 as the ‘Green published in 2007, written specifically for those contracts where at
Book'. The next in the series was the ‘Yellow Book’, published in least one of the parties is contracting outside their home country.
1992, which was produced in response to requests from industry for The latest UK editions of the Red, Green, Burgundy, Yellow and
a subcontract that could be used as a ‘back to back’ subcontract Brown Books, all published in 2013, have been fully updated to
with the Red and Green Books. reflect current best practice in project delivery and recent
These Forms of Contract broke new ground in attempting to deal developments in both law and project implementation.
with the complex way in which purchaser, contractor and As with previous editions, the Guide Notes contained within the
subcontractor divide the responsibility for creating a new process publication provide a valuable resource for the user of the Forms of
plant, providing a fair and balanced framework where each party to Contract and have been fully updated to reflect the content of the
the contract could understand its responsibilities and achieve its General Conditions
objectives without confrontation. As process plants are judged by IChemE runs training courses examining in detail the Forms of
their performance in operation, process industry contracts must, Contract series - see www.icheme.org/courses.
therefore, also be performance based. This is the underlying
philosophy of the IChemE Forms of Contract suite and is a January 2013
fundamental difference from many of the other contract series used
in the wider construction industry.
Form of
Contract
Subcontracts
The Yellow Book
Fourth edition 2013

The information given in this volume is given in good faith and belief
in its accuracy. However, neither IChemE nor any individual
member of the Contracts Committee shall have any liability
whatsoever in any jurisdiction to users or to any third party arising
out of the contents of this volume whether in contract, tort/delict
(including negligence) or otherwise. Accordingly, when necessary,
users should obtain and rely upon appropriate professional advice.
All rights reserved. No part of this publication may be reproduced,

stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording or
otherwise, without the prior permission of the copyright owner.
A licensed electronic version is available to those wishing to

prepare multiple copies of contracts. For details, email
sales@icheme.org or telephone +44 (0)1788 578214.
This publication is protected by copyright and may not be
photocopied.
Published by
Institution of Chemical Engineers (IChemE)
Davis Building 165-189 Railway Terrace Rugby
Warwickshire CV21 3HQ, UK
IChemE is a Registered Charity in England and Wales and a charity
registered in Scotland (SC039661)
Copyright © 2013
Institution of Chemical Engineers
Agreement on Website
ISBN: 978-0-85295-545-1
To facilitate use of the Form of Contract the text of the Agreement is
freely available on the IChemE website at www.icheme.org
Fourth edition 2013
Typeset by Techset Composition Ltd, Salisbury, UK
Printed by Bell & Bain, Glasgow, UK

Contents Page
Page
Introductory notes 56
1. Use of the Conditions 1 57
2. Procurement policy in the process industry 1 58
3. ‘Back-to-back’ Subcontracts 2 58
4. Contract Procedure 3 59
5. Disputes 3 60
Subcontract Agreement 4
General Conditions of Subcontract

61
1. Definitions, interpretation, waiver and Notices 7
62
2. Co-operation 11
62
3. Subcontractor’s responsibilities 11
62
4. Contractor’s responsibilities 12
63
5. Decisions and Subcontract co-ordination 13
63
6. Sufficiency of Subcontract Price 14
64
7. Statutory and other obligations 14
64
8. Patent and other protected rights 15
65
9. Subcontracting and third party rights 17
64
10. Nominated Sub-subcontractors 18
6 66
11. The Contract Manager 19
12. Subcontract Manager and Subcontractor’s staff 20 66
13. Times of completion and Approved Programme 21 67
14. Delays 22 67
15. Damages for delay 23 65
16. Variations 24 8 68
17. Variations proposed by Subcontractor 25 69
18. Valuation of Variations 26
19. Claims 27 69
20. Confidentiality 27 69
21. Documentation 28 66
22. Inspection and pre-installation tests 30 0
23. The Site 31 70
24. Delivery to Site 32 71
25. Ownership of Subcontract Materials 32
26. Health, safety, environment and pollution 33
27. Site services 34
28. Site working conditions 34
29. Meetings 35
45. Limitations on liabilities and remedies Agreement, its Annex, the Subcontract
30. Care of the Subcontract Works 35 Guide Note A: Reviews and information 72
31. Insurance 37 Guide Note B: Secrecy, patents, etc 72
32. Completion of construction 39 Guide Note C: Variations 72
33. Taking Over 40 Guide Note D: Insurance 73
34. Site clearance 42 Guide Note E: Liability for Defects 73
35. Performance tests 43 Guide Note F: Disputes 73
46. Disputes Specification and the Schedules

47. Adjudication The Subcontract Agreement
48. Reference to an Expert The Annex to the Subcontract Agreement
49. Arbitration The Subcontract Specification
50. Related issues under the Main Contract Sched u le 1: Descri ption of the Su bcontract Works
Schedule 2: Documentation
Guidance on compiling the Subcontract Schedule 3: Responsibilities of Contractor
Schedule 4: Health & Safety
Schedule 5: Environmental protection & waste disposal Schedule 6: 17: Performance guarantees and damages for failure
Quality assurance and validation Schedule 7: Subcontracting Schedule Schedule 18: Valuation of Variations and claims
8: Subcontractor’s named personnel Schedule 9: Training by Schedule 19: Subcontract Price and payment
Subcontractor Schedule 10: Parts with limited working life and spare Schedule 20: Subcontract coordination Schedule 21:
parts Reports and records Schedule 22: Main Contract
Schedule 11: Times of completion Schedule 12: Liquidated damages for particulars
delay Schedule 13: Pre-installation tests and procedures Schedule 14:
Criteria for the completion of construction Schedule 15: Take Over
Guidance on contractual issues
procedures Schedule 16: Performance tests and procedures Schedule
36. Acceptance 46
37. Liability for Defects 46 Appendices
38. Final Certificate 48
39. Subcontract Price 48 Appendix A: List of Guide Notes contained in the Main
40. Records and audits 49 Contracts 74
41. Payment 49 Appendix B: Sample Certificates 75
42. Suspension of the Subcontract Works 51
43. Termination by the Contractor for convenience 52
44. Termination for Subcontractor’s default 53 Index 79
Contracts Committee members
Gordon Bateman (Chairman) Paul Buckingham David McLurgh

Roger Button John Challenger Geoffrey Hawker Henry Rowson
Chris Hillier Jon Shattock
Ray Shaw
lainTurner Jim
Williams
Secretary to the Contracts Committee: Tracey Donaldson, IChemE
I
V
Introductory notes
1. Use of the Conditions Subcontractors, so far as they are applicable. Therefore most, if not
all, Subcontracts under a Reimbursable Main Contract would be
These conditions, referred to as the Institution of Chemical Engi- expected to be placed upon the basis of conditions which would be
neers’ (IChemE) ‘Yellow Book’, contain a form of back-to-back either back-to-back with those of the Main Contract or would
subcontract, for use with the: incorporate a significant proportion of them.
• Red Book (lump sum); Where a Lump Sum Main Contract is involved, however, the
• Green Book (cost reimbursable); or Contractor has substantial freedom to decide his own procurement
• Burgundy Book (target cost); policy, subject to any limits or requirements set out in the Main
Contract.
published by IChemE.
The Conditions of Subcontract have been drafted so as to allow
As with the main contract forms, these conditions have been
maximum freedom to the user as to the method of payment to be
developed by the IChemE Contracts Committee. The General
adopted, although there is an assumption that the subcontract will
Conditions have been formulated to reflect best practice and
be a priced-based contract and not a cost reimbursable contract.
relationships within the process plant sector, which are generally far
If the latter approach is to be adopted a number of changes
less adversarial in nature than in other parts of the construction
would be necessary to the Conditions of Subcontract. Anyone
industry. IChemE has always adopted the basic philosophy that the
contemplating such an approach is cautioned that without such
parties should co-operate to achieve the mutual objective of a
changes being undertaken by someone who knows and under-
successful project, rather than regarding the Contract as simply the
stands the required differences between price and cost-based
basis for an adversarial relationship. IChemE believes that it is in
contracts there is a strong likelihood of creating major difficulties in
the best interests of the parties to deal fairly with each other and
the application and management of the ensuing contract.
with their Subcontractors, specialists and suppliers in an
Comparison with the Green Book would be of value to anyone
atmosphere of co-operation in order to achieve ‘win-win’ solutions
experienced in undertaking such a task.
to the problems that will inevitably arise during the course of a
project.
These conditions are primarily intended for subcontracts that
include the design, supply, site construction/erection/ installation 2. Procurement policy in the process
and testing of equipment and for when the Subcontractor is to
supply plant and equipment that will be significant in terms of the industry
Main Contract Plant. Typically this might be because the
It is normal practice in the process industries for the Contractor to
Subcontractor is to supply a significant process package or system
adopt a wide range of procurement techniques, dependent for
that might be of some size or complexity.
example upon:
The aim has been to create a form of subcontract complete
within itself, without the need for frequent references to the main • market conditions;
contract. This means that the subcontract is more lengthy than it • subcontract size;
otherwise might be, but it should be easier to use. • type of equipment,sub-system or services to be procured;
The form is designed to be used in its entirety together with the • importance to the process of the equipment or services
Schedules and a Subcontract Specification. concerned;
Anyone contemplating modifications to the General Conditions • the price/risk implications of using different procurement
should take care not to introduce provisions which may conflict with strategies and conditions.
these well-established practices and relationships. They should In general terms, the Contractor will seek to purchase the
particularly be aware of the risk of introducing inconsistencies within various items of equipment and work that he needs to carry out his
the Conditions, or provisions that may be unenforceable. project on whatever conditions he considers will give him a
Users are cautioned that IChemE has not authorised or reasonable cost for the items concerned, together with a reason-
approved any amendments unless they are published by IChemE. able level of support for the project, and with the Subcontractor
Guide Notes are given at the end of this handbook to help the accepting an appropriate level of liability in the event that something
user in preparing the Subcontract Specification and Schedules. The goes wrong.
Guide Notes given in this Yellow Book have been kept brief. For The Contractor will achieve this by using different procurement
more extensive discussion and guidance users should refer to the conditions as appropriate. Specialist skills may be brought in on an
more detailed Guide Notes in the Red Book. appropriate commercial basis. Some items will be purchased using
The approach that the Contractor should take in subcontracting standard purchase orders of the ‘small print on the reverse’ type.
parts of the Main Contract Works will be different when working Some will be brought in under existing term supply or call-off
under a main contract incorporating either the Reimbursable and/or arrangements. Some will be brought in on the basis of one-off
Target Cost Conditions of Contract compared with working under a negotiated contracts. In every case the Contractor will balance the
main contract incorporating the Lump Sum Conditions. risks that he seeks to pass on to the Subcontractors against the
Under the terms of Clause 9 of the Forms of Contract for prices which those Subcontractors demand in return.
Reimbursable and Target Cost Contracts, the Contractor is required The ability to adopt a wide variety of procurement strategies,
to purchase equipment on either a basis agreed with the Project dependent upon circumstances, is one of the essential skills of the
Manager or on the basis of fixed-price competitive tenders from Contractor.
qualified suppliers. In either case the Contractor is then required to This handbook is not intended to call into question in anyway a
pass terms corresponding to those of the Main Contract on to the Contractor’s freedom to adopt whatever procurement strategy he
Copyright© 2013 Institution of Chemical Engineers 1

feels to be appropriate. It is intended to meet the particular Subcontractor’s documentation will be consistent with his
requirement which every Contractor has from time to time for a own.
reasonable form of Subcontract that will operate back-to-back with 2. The Contractor will be responsible under the normal process
his Main Contract. plant Contract for giving a performance guarantee to the
Purchaser in respect of the Main Contract Plant. That
performance guarantee will be, in effect, an undertaking by
the Contractor that the Main Contract Plant will meet the
3. 'Back-to-back' Subcontracts contracted performance. However, when the Contractor
turns to his back-to-back Subcontractors, he may well ask
The term ‘back-to-back Subcontract’ is widely used in industry to
for different levels of performance guarantees. The supplier
mean a Subcontract that passes down to the Subcontractor similar
of a complete process package might expect to give a full
or identical terms to those of the Main Contract. Thus any act or
performance guarantee. The supplier of an individual
omission by the Subcontractor which results in the Contractor being
equipment item, even one of major size and importance,
in breach of his Contract with the Purchaser and therefore liable for
would be expected to give a more restricted guarantee,
damages for that breach will also constitute a breach by the
limited specifically to his own scope of supply. The supplier
Subcontractor of the terms of the back-to- back Subcontract with
of, say, structural steelwork would not give any performance
the Subcontractor liable in damages to the Contractor. Therefore,
guarantee at all.
the theory runs, the Contractor can rest more easily. He knows that
his Subcontractors will now act in whatever ways will directly
3. The Contractor may accept liability, say for lateness in
Completion, on the basis of liquidated damages. The
contribute to the success and completion of the Main Contract
liquidated damages might be expressed in the Main
instead of being motivated only to carry out whatever work is
Contract as a percentage payment of the Main Contract
necessary to complete their own Subcontracts. He also knows that
Price per day/week of delay, equivalent to a cash sum per
he will be protected against many claims from the Purchaser
day/week. When the Contractor turns to his back- to-back
because they can be passed on in their entirety to the
Subcontractors he can choose either to pass down this
Subcontractors.
liability by asking the Subcontractors to accept the same
Comment must, however, be made on two aspects of this
percentage liability in which case their cash liability will
theory.
probably be considerably lower than his own, or the same
First, it is extremely rare to meet a situation in which it is possi-
cash liability in which case their percentage liability will be
ble to have a totally back-to-back Subcontract. This is because it is
higher than his own.
very unusual for a Subcontractor to have precisely the same
practical obligations towards the Contractor as those that the The above are just a few examples of the many different
Contractor will have towards the Purchaser. The Contractor will approaches which may be used in compiling back-to-back
have the obligation to carry out a contractual task as defined in the Subcontracts. Each gives a different result. Therefore one must
Main Contract within an agreed time-scale, and in compliance with always take care to define precisely what is meant by the term.
the procedures provided within that Main Contract. The Essentially the Form of Subcontract in this handbook is intended
Subcontractor will have the obligation to perform only a part of that to pass down to a Subcontractor terms and conditions of contract
task, to a different time-scale, and in accordance with different which are identical so far as this can be achieved in practice to the
procedures. He may not be required to provide the same range of terms of the terms and conditions used in a Main Contract.
activities, or if he is so required, then probably only to a limited Changes are made only where necessary to adapt one to the other.
extent. Finally, he will not give guarantees to the Contractor on the The form allows for different time-scales to suit the differences
overall design/performance of the Subcontract Works for instance, between the two. For example where under Sub-clause 19.1 of the
to the same extent as the Contractor will to the Purchaser. Red Book the Contractor has fourteen days to give notice of a
Often several Subcontractors will contribute to the same area of claim, under the equivalent Yellow Book Sub-clause 19.1 the
the Contractor’s activities and their work will be interdependent, so Subcontractor has ten days to give notice of a claim, thereby
that no single Subcontractor can, in practice, be held to a liability allowing the Contractor time to pass to the Project Manager a
identical to that of the Contractor to the Purchaser. matter originating with the Subcontract
Second, the term ‘back-to-back Subcontract’ is used to mean
many different and mutually exclusive things. As a general definition
of a class of subcontract, the term is adequate. It defines a
subcontract that passes down similar obligations to a
Subcontractor to those of the Contractor. However as soon as one
begins to examine the possibilities of such a contract in detail, it is
apparent that there are different ways of seeking to do this, which
automatically involve different contract strategies. For example:
1. The Main Contract requires the delivery of documentation to
the Purchaser by a certain date. To require the Subcon-
tractor to deliver his documentation on the identical date
would not allow the Contractor time to incorporate that
documentation into his own and then re-submit it to the
Purchaser. Therefore, the Contractor must either impose a
shorter delivery period upon the Subcontractor, or permit the
Subcontractor to deliver his documentation direct to the
Purchaser, in which case it will be necessary for the
Contractor to devise some method of ensuring that the
2 Copyright © 2013 Institution of Chemical Engineers

Works. Monetary liability is limited to agreed figures, or passed
down on a cash basis.
4. Contract Procedure
IChemE strongly recommends that a formal Subcontract Agree-
ment, in the form of wording provided in this publication, be used.
The Subcontract Agreement is to contain information which is
essential for the proper working of the Subcontract and, in
particular, defines the various documents which together form the
Subcontract and establishes an order of precedence to be used in
the event of conflict.
5. Disputes
It is hoped that those who use this form of contract will follow the
process plant industry’s tradition of cooperative and non-adver-
sarial relationships. However, should difficulties arise, in addition to
IChemE’s traditional combination of expert determination and
arbitration, this form continues the approach of reference in the first
instance of any problem to the Contract Manager (the Contractor’s
equivalent of the Purchaser’s Project Manager), and of mediation. It
also provides for adjudication (to be undertaken in accordance with
IChemE's Adjudication Rules) in terms which comply with the
Housing Grants, Construction and Regeneration Act 1996, as
amended by the Local Democracy, Economic Development and
Construction Act 2009.
Not in GT Contract
In GT Contract not in yellow book

Subcontract Agreement (See Guidance on completing the Subcontract Agreement)
A SUBCONTRACT AGREEMENT dated [day, month and year in words]
between [full name] (‘the Contractor’) of [address] and [full name] (‘the
Subcontractor’) of [address]
WHEREAS
I. The Contractor has entered into the Main Contract with [name of Purchaser] (the ‘Purchaser’) for the design, manufacture, supply,
installation, taking over and completion of the Main Contract Plant described therein;
II. The Contractor wishes the Subcontractor to carry out and complete the Subcontract Works defined in the Subcontract as a part of
the Main Contract Works; and
III. The Subcontractor is willing and able to carry out and complete the Subcontract Works in accordance with the Subcontract.
THIS SUBCONTRACT AGREEMENT provides as follows:
1. The following documents and their attachments (if any) shall together form the contract between the Contractor and the Subcontractor
and the term ‘Subcontract’ shall in all such documents be construed accordingly.
(a) This Subcontract Agreement.
(b) The Subcontract Conditions, comprising:

Part I - The General Conditions, being Clauses 1-50 as set out in the IChemE Form of Contract for Subcontracts (the
‘Yellow Book’), 4th edition, 2013;
and
Part II - The Special Conditions (if any).
(c) The Subcontract Specification. And invitation to tender dated ????
(d) The Schedules:

Schedule 1: Description of the Subcontract Works; Documentation;
Schedule 2: Responsibilities of Contractor;
Schedule 3: Health & Safety;
Schedule 4: Environmental protection & waste disposal; Quality assurance and validation;
Schedule 5: Subcontracting;
Schedule 6: Subcontractor’s named personnel;
Schedule 7: Training by Subcontractor;
Schedule 8: Parts with limited working life and spare parts; Times of completion;
Schedule 9: Liquidated damages for delay;
Schedule 10 Pre-installation tests and procedures;
Schedule 11 Criteria for the completion of construction;
Schedule 12 Take Over procedures;
Schedule 13 Performance tests and procedures;
Schedule 14 Performance guarantees and damages for failure; Valuation of Variations and claims;
Schedule 15 Subcontract Price and payment;
Schedule 16 Subcontract coordination;
Schedule 17 Reports and records;
Schedule 18 Main Contract particulars.
Schedule 19
Schedule 20 For the purpose of identification, the contents of the Subcontract, including the number of pages
Schedule 21 in each part, are listed in the Annex to this Subcontract Agreement attached hereto.
Schedule 22
2. The Subcontract constitutes the entire agreement between the Contractor and the Subcontractor with respect to the performance
of the Subcontract Works and supersedes any prior negotiation, representation or agreement relating thereto, whether written or
oral, except to the extent that they are expressly incorporated in the Subcontract. No change, alteration or modification to the
Subcontract shall be effective unless the same shall be in writing and signed by both parties. The Contractor and the
Subcontractor agree that they shall not be entitled to enforce or otherwise rely on any term or condition (including but not limited to
any term or condition, standard or otherwise, contained in a Quotation, acceptance of Quotation, Purchase Order or any Standard
Terms and Conditions of either party) which is not contained or incorporated expressly in the Subcontract.
3. The Subcontract Price is the sum of [name(s) of currency(ies) and amount(s) in figures and words],
4. The total aggregate liability of the Subcontractor to the Contractor as provided in Sub-clause 45.3 shall not exceed [name(s) of
currency(ies) and amount(s) in figures and words],
5. The Subcontractor’s liability in respect of:

(a) Loss of or damage to property of the Purchaser and the Contractor and their Affiliates in accordance with Subclause
30.13 of the General Conditions shall not exceed [name(s) of currency(ies) and amount(s) in figures and words],
(b) The amount to be stated in accordance with Sub-clause 37.12 of the General Conditions is [name(s) of currency(ies)
and amount(s) in figures and words],
6 The Deductible shall be [name of currency and amount in figures and words],
7. In case of conflict between any of the documents accompanying this Subcontract Agreement, the order of precedence shall be as
stated in Sub-clause 1.2 of the General Conditions.
8. For the purposes of Sub-clauses 6.3, 7.3, 8.3 and 28.3 of the General Conditions, the date of the Subcontractor’s tender shall be
[date],
9. The date for the commencement of the Subcontract Works shall be [date],
10. The Contractor hereby appoints [name] to act as the Contract Manager for the purposes of the Subcontract.
11. The Subcontractor hereby appoints [name] to act as the Subcontract Manager for the purposes of the Subcontract.
12. The bank whose base lending rate is referred to in Sub-clause 1.1 of the General Conditions in the definition of Agreed Rate is
[name of bank or where more than one currency is to be used , the names of the banks and a statement as to which base
lending rate applies to which currency],
13. The relevant take over certificate referred to in the definition of the Defects Liability Period in Sub-clause 1.1 of the General
Conditions shall be [the relevant take over certificate under the Main Contract.] [the relevant Take Over Certificate.]
14. Wherever Profit is expressly referred to in the General Conditions it shall be . . . % of the applicable Cost.
15. Any Notice to be served in accordance with Sub-clause 1.8 of the General Conditions shall be sent to the postal address or fax
number stated below:
Address: [full postal address]

Fax Number: [fax number]
The Subcontractor: For the attention of: [name and/or position]

Address: [full postal address]
Fax Number: [fax number]
16. The Subcontract shall be governed by the laws of England and Wales.
17. The seat of any arbitration proceedings under Clause 49 shall be [place]
18. All documents referring to the Subcontract shall carry the Identification Number: [insert reference number].
SIGNED by the duly appointed representatives of the parties:

For and on behalf of [full name of the Contractor] For and on behalf of [full name of the Subcontractor]
Signature: Signature:
Name: Name:
Position: Position:
General Conditions of Subcontract
1. Definitions, interpretation, waiver and Notices

1.1 In the Subcontract, unless the context otherwise requires, the following expressions shall
have the following meanings.
‘Acceptance Certificate’ has the meaning stated in Sub-clause 36.3 and ‘Accept’,
‘Acceptance’ and ‘Accepted’ shall be construed accordingly.
‘Affiliate’ means any entity that directly or indirectly controls, is controlled by, or is under
common control with another entity. For the purposes of this definition, control means
having the beneficial ownership of more than 50% of the issued share capital of a company
or the legal power to direct or cause the direction of the general management of the
company, and ‘controls’ and ‘controlled by’ shall be construed accordingly.
‘Agreed Rate’ means the base lending rate(s) as may be current from time to time of the
bank(s) stated in the Subcontract Agreement.
‘Applications Software’ means software that has been developed specifically as part of
the Subcontract Works including configuration of Third Party Software or
Subcontractor’s Software.
‘Approved Programme’ means the programme of work approved from time to time in
accordance with Clause 13 (Times of completion and Approved Programme).
Assembly drawings means the general arrangement sheet appended to the specification in
the main contract and/or the subcontract specification and any details assembly drawings,
piping and instrumentation drawings (P&Ids) and manuals procured by the purchaser form
the boiler supply following the date of the notice to proceed in respect of the installation of
the boiler plant (as such drawings and manuals are modified from time to time by the
written instruction of the purchaser)
Availability Liquidated damages has the meaning set out in para 4 of schedule 17
(Performance Guarantees and drainage for failure)
Availability test has the meaning in schedule 15 (Take over procedure)
Boiler plant Means the plant and equipment including spare parts forming part of the facility
which is not supplied under the main contract
Boiler Supplier means Outotec USA Inc
Boiler Supply Contract the design and supply agreement between the purchaser and
outotec (USA) Inc, defined in the main contract
Capacity Liquidated Damages has the meaning set out in para 4 of schedule 17
(Performance guartees and damages for failure)
Capacity Tests means the capacity tests as set out in schedule 16 (Performance tests and
procedures).
Commercial Handling Agreement means the agreement between the purchaser and
associated British ports
Commissioning requirements means the purchaser requirements for the commissioning of

the facility as set out in schedule 14
‘Confidential Information’ has the meaning stated in Sub-clause 20.1.

Connection agreement is the agreement to be entered into between the purchaser
and northern powergrid, defined in the main contract
‘Construction Completion Certificate’ has the meaning stated in Sub-clause 32.2.
‘Contract Manager1 means the individual named as such in the Subcontract Agreement
subject to Clause 11 (The Contract Manager).
‘Contract Manager’s Representative’ has the meaning stated in Sub-clause 11.4.
‘Contractor1 means the person named as such in the Subcontract Agreement or his
permitted assigns.
Contractor provided information means the supplementary documents set out in schedule
3
‘Contractor’s Risk’ means

(a) the use or occupation of the Subcontract Plant (or any part) by the Purchaser or
the Contractor, their personnel, consultants, or agents, or other contractors (not
being employed by the Subcontractor); or Except when any such person is
following the instructions of the subcontractor at the site during the period prior to
take over or
(b) Any defective contractor provided information which is provided to the contractor
after the date of the subcontract , or
(c) any design or information provided by the Contractor (other than any design or
information which the Subcontractor is required to verify in accordance with his
obligations under the Subcontract); or
(d) any wrongful or negligent act or omission of the Purchaser or the Contractor, their
personnel, consultants, or agents, or other contractors (not being employed by the
Subcontractor); or
(e) riot, war, invasion or hostilities (whether or not war be declared), terrorism, civil
unrest, civil war, rebellion, revolution, insurrection or military or usurped power or
similar events; or
(f) ionising radiations or contamination by radioactivity from any nuclear fuel or from
any nuclear waste, from the combustion of nuclear fuel, radioactive, toxic,
explosive or other hazardous properties of any explosive nuclear assembly or
nuclear component thereof; or
(g) pressure waves caused by aircraft or other aerial devices travelling at sonic or
supersonic speed.
‘Cost’ means any Third party cost and expense properly incurred cost properly incurred by
the Subcontractor in carrying out any of his obligations under the Subcontract, and
‘Costs’ shall be construed accordingly.
‘Decision’ means any decision, certificate, notification, instruction, order, agreement,
approval, rejection or consent.
‘Deductible’ means the sum stated in the Subcontract Agreement being the applicable
insurance deductible under the policy or policies of insurance provided in accordance with
Sub-clause 31.1.
Deductible means the applicable insurance deductible under the policy or policies of
insurance provided
‘Default Certificate’ has the meaning stated in Sub-clause 44.6.
‘Defect’ means any work done or any Subcontract Materials or the Subcontract
Plant or any part of it which does not comply with the Subcontract, provided that such
matter shall not be a Defect if it is caused by:
(a) normal wear and tear;
(b) a failure by the Contractor or the Purchaser to operate and maintain the
Subcontract Plant in accordance with any operating and maintenance manuals
provided by the Subcontractor and/or with good engineering practice; and/or
(c) a failure by the Contractor to comply with any of his obligations under the
Subcontract.
‘Defects Liability Period’ means a period of three hundred and sixty five days, or such
other period as may be established in accordance with Sub-clause 37.9 or 37.11, after the
date of the relevant take over certificate as identified in the Agreement, or if no such
certificate is identified, the relevant take over certificate issued under the Main Contract,
or other commencement date as described in Sub-clause 37.5.
Defects liability period means the period starting on the date of relevant take over
certificate as identified in the subcontract agreement and ending 2 years thereafter or such
other period as may be established in accordance with sub clause 37.9 or 37.11, after the
date of the relevant take over certificate as identified in the subcontract agreement
Defect other means any defect in respect any work done or any subcontract materials or
subcontract plant or any part of it or any part of the subcontractor works or any part of it
which is not deemed to be a defect (Subcontractor Fault)
Defect (Subcontractor Fault) means any work done or any subcontract materials or
subcontract plant or any part of it or any part of the subcontractor works or any part of it
which does not comply with the subcontract and any physical damage to the subcontract
works, the main contract works and or the facility caused by such non-compliance provided
that it is not solely caused by
a) normal wear and tear
b) a failure by the purchaser to operate and maintain the facility in accordance with any
operating and maintenance manuals provided by the contractor and/or with good
engineering practice
c) a failure by the contractor to comply with any of his obligations under this subcontract
d) a failure by either of the parties to the boiler supply contract to comply with their
obligations there under and/or
e) a failure by either parties to the connection agreement to comply with their obligations
there under
Delay liquidated damages had the meaning stated in sub-clause 15.1
‘Documentation’ means any relevant documents in paper or electronic form, including

drawings, technical software, images, designs, manuals or records.
DNO means the distribution network operator northern powergrid
DNO requirements means the relevant requirements of the DNO imposed on the
purchaser in respect of the sale and export of electricity from the facility set out in the
connection agreement
Environmental permit means the environmental permit to be issued by the

environment agency for the carrying out of waste management and related activities
at the facility
‘Expert’ means a person referred to and so called in Clause 48 (Reference to an Expert).
Facility means the renewable energy facility consented under the planning conditions
for development on the area demised under the lease which comprises the works in
the main contract the works in the boiler supply contract and works in the connection
agreement
Feedstock supplier means JM envirofuels (Hull) Ltd
‘Final Certificate’ has the meaning stated in Sub-clause 38.1.
‘Final Date for Payment’ has the meaning stated in Sub-clause 41.5.
‘Force Majeure’ has the meaning stated in Sub-clause 14.6. and 14.6a
Foreseeable changes in law means any legislation , the relevant details of which had been
published
a) in a white paper
b) in a parliamentary bill
c) in a draft statutory instrument or
d) as a proposal in the official journal of the European union
on or before the notice to proceed under the main contract
G59 Connection Test means the test of the same name details of which are set out in
schedule 15
‘Free-lssue Materials’ means machinery, plant and other items of equipment and
materials intended to form part of the Subcontract Plant and other things needed in its
operation, to be supplied by the Contractor.
‘General Conditions’ means these General Conditions of Subcontract.
‘IChemE’ means the Institution of Chemical Engineers, 165-189 Railway Terrace, Rugby,
Warwickshire, UK, CV21 3HQ.
‘Legislation’ means all applicable laws, statutes, bye-laws, regulations and other
measures having the force of law.
Latent defects means a defect which is a defect (subcontractor fault) in or relating to

the subcontract works which manifests itself after the expiration of the defects liability
period (but before the expiry of the latent defects liability period) and which is not
discoverable prior to the expiration of the defects liability period on reasonable
inspection by the purchaser and/or contractor
Latent defects liability period means the period starting on the date certified in the
construction completion certificate under the main contract and ending 12 years thereafter
Legislation means all applicable laws, statutes, bye-laws, regulations and other measures
having the force of law
Lease means the lease of the site between associated British ports as the landlord and the
purchaser as the tenant
Liquidated damages means any and all (as the context so permits) of those liquidated and
ascertained damages payable by the subcontractor to the contractor in accordance with
the subcontract, other than the damages for delay referred to in sub-clause 37.9, 44.6(a)
10 Copyright :© 2013 Institution of Chemical Engineers

‘Main Contract’ means the contract between the Purchaser and the Contractor, as
described in the Subcontract Agreement.
Main contract materials means machinery, plant and other items of equipment
and materials intended to form part of the main contract and other things
needed in its operation excluding software to be supplied by the contractor
under the main contract and excluding equipment to be supplied under the
boiler supply contract and/or the connection agreement
Main contract plant means the plant as described in the main contract
specifications which forms part of the main contract to be constructed at the
site under the main contract including any software
‘Main Contract Plant’ means the Plant defined in the Main Contract.
‘Main Contract Works’ means the Works defined in the Main Contract.
Main contract temporary works mean all temporary works and structures of
every kinds constructed at the site by the contractor to facilitate construction
of the facility
Main contract works means the design, engineering and other services to be
provided by the contractor under the main contract including the provision and
construction of the main contract plan, the contestable works, any main
contract temporary works and the subsequent dismantling or removal of the
main contract temporary works when no longer required, and any other work to
be carried out by the contractor in accordance with the contract including the
commissioning of the boiler plant.
Milestone event such event as indicated in schedule 19
Milestone payment date such date as indicated in schedule 19
Minimum Guaranteed steam means limb (i) of the definition of basis conditions
as set out in schedule 15 (take over procedures) as adjusted by the correction
curves in schedule 15
Minimum Performance guarantee has the meaning ser out in para 3.1(d) of
schedule 15
‘Notice’ means a formal notice issued by the Contractor to the Subcontractor or by the
Subcontractor to the Contractor in accordance with Sub-clause 1.8.
‘Notice of Adjudication’ means a Notice as described in Sub-clause 47.2.
‘Notice of Arbitration’ means a Notice as described in Sub-clause 49.1.
‘Notice of Dispute’ means a Notice as described in Sub-clause 46.4.

‘Notice of Termination’ means a Notice as described in Sub-clause 43.1.
Operator means outotec uk or any replacement operator notified by the purchaser to
the subcontractor in writing from time to time
Operating contract means the contract to operate and maintain the facility entered
into betwerrn the operator and the purchaser
Performance Liquidated damages means the capacity and/or availability liquidated
damages as set out in schedule 17 (performance guarantees and damages for
failure)
Performance tests means those tests set out in schedule 16 (performance tests and
procedures) and include the availability and capacity tests as set out in schedule 16
‘Performance Test Commencement Period’ means the period within which the
performance tests are to commence as stated in Schedule 11 (Times of completion) or
any extension thereof granted in accordance with Clause 35 (Performance tests).
‘Performance Test Period’ means the period within which the performance tests are to be
carried out and completed, as stated in Schedule 11 or any extension thereof granted in
accordance with Clause 35.
Planned take over date means the date as set out in schedule 11 table 2
Planning conditions means the conditions to the planning consent with reference
14/00923/full

Precedent installation drawing means the drawing of the same name appended to
schedule 1
‘Profit’ shall be as defined in the Subcontract Agreement.
Project documents means the documents referred to in the related obligations
which the purchaser has entered into or will enter into
‘Project Manager’ means the individual named as such in the Main Contract.
‘Purchaser’ means the person named as such in the Subcontract Agreement.
Related obligations means the obligations and restriction that the subcontractor must
comply with as set out under schedule 23
Related provisions means the contractual provisions that the subcontractor must
acknowledge as set out in schedule 23
‘Schedules’ means the schedules listed in the Subcontract Agreement and forming part
of the Subcontract.
‘Section’ means a part of the Subcontract Plant identified in the Subcontract as a

Section (if any).
‘Site’ means the area within which the Subcontract Plant is to be constructed, together
with all other areas as the Subcontractor shall be permitted to use in connection with the
Subcontract Works, as specified in Schedule 1 (Description of the Subcontract Works).
‘Site Materials’ means (a) any Subcontract Materials from the time of their delivery to the
Site; and (b) any Free-lssue Materials from the time of their delivery to the Site.
‘Special Conditions’ means the conditions of contract entitled Special Conditions (if any).
‘Subcontract’ has the meaning stated in the Subcontract Agreement.
‘Subcontract Agreement’ means the document titled ’Subcontract Agreement’ signed by

the Contractor and the Subcontractor and which refers to these General Conditions.
‘Subcontract Conditions’ means the General Conditions and the Special Condi-
tions.
‘Subcontract Manager’ means the individual named as such in the Subcontract

Agreement subject to Clause 12 (Subcontract Manager and Subcontractor’s staff).
‘Subcontract Materials’ means machinery, plant and other items of equipment and
materials intended to form part of the Subcontract Plant and other things needed in its
operation excluding software, to be supplied by the Subcontractor under the Subcontract.
‘Subcontract Plant’ means the plant as described in the Subcontract Specification

to be constructed at the Site including any software.
‘Subcontract Price’ means the sum stated in the Subcontract Agreement.

Subcontract price means the lump sum stated in the subcontract agreement
subject to adjustment only in accordance with the terms of the subcontract,
and payable in accordance with clause 41 of the general conditions (payment)
in the lawful currency of England and wales
Subcontractors proposals means the document described as such which is
annexed to schedule 1 and sets out the technical definition of the subcontract
plant
‘Subcontract Specification’ means the specification forming part of the Subcontract,

which sets out the technical definition of the Subcontract Plant.
‘Subcontract Temporary Works’ means all temporary works and structures of every kind
constructed at the Site by the Subcontractor to facilitate construction of the Subcontract

Plant. Facility
‘Subcontract Works’ means the design, engineering and other services to be provided by
the Subcontractor including the provision and construction of the
Subcontract Plant and any Subcontract Temporary Works and the subsequent
dismantling or removal of the Subcontract Temporary Works when no longer required,
and any other work to be carried out by the Subcontractor in accordance with the
Subcontract.
‘Subcontractor’ means the person named as such in the Subcontract Agreement

or
his permitted assigns.
`‘Subcontractor’s Equipment’ means all equipment, construction plant, vehicles,

temporary buildings and offices, materials, tools or things brought on to the Site by the
Subcontractor or a Sub-subcontractor for carrying out the Subcontract Works but not for
permanent incorporation in the Subcontract Plant, excluding Subcontract Temporary
Works.
‘Subcontractor’s Site Manager’ has the meaning stated in Sub-clause 12.2.
‘Subcontractor’s Software’ means software owned by the Subcontractor.
‘Sub-subcontractor’ means any subcontractor or supplier of any tier to whom the

preparation of any design, the supply of any Subcontract Materials or the carrying out of
any other part of the Subcontract Works is subcontracted.
‘Take Over Certificate’ has the meaning stated in Sub-clause 33.7, and ‘Take Over’,
Taking Over’ and ‘Taken Over’ shall be construed accordingly.
‘Termination Certificate’ has the meaning stated in Sub-clause 43.5.
Tests on completion or take-over tests or tests for satisfying schedule 15 means
those tests as set out in schedule 15 (take over procedures)
‘Third Party Software’ means software owned by a third party.
‘Variation’ has the meaning stated in Sub-clause 16.1.

‘Variation Order’ means an order by which a Variation is ordered, or other notification
made to the Subcontractor in accordance with the Subcontract.
1.2 The Subcontract documents shall be construed as mutually explanatory of one another. In
the event of conflict between any of the documents comprising the Subcontract, the order
of precedence shall be as follows:
(a) the Subcontract Agreement;
(b) the Special Conditions (if any);
(c) the General Conditions;
(d) the Subcontract Specification;
(e) the Schedules.
The Subcontractor has had the opportunity to scrutinise the documents listed
in this clause 1.2 such documents shall be construed as mutually explanatory
of one another. In the event of conflict between any of the documents
comprising the subcontract, te order of precedence shall be from (a) (highest
priority) to (F) Lowest Priority
(A) The subcontract Agreement
(B) The General Conditions
(C) The subcontract specifications
(D) The schedules
(E) The subcontract meeting minutes and attendances sheet
(F) The subcontractors proposal

Save where expressly provided in sub-clause 6.2. if either party discovers
any error, omissions, ambiguities, discrepancies, inadequacies, conflicts,
defects or inconsistencies in or between any of the schedules ( contract
discrepancies), either party shall notify the other party and the contract
manager. The contract manager acting reasonably shall decide how to
resolve the contract discrepancy by making an appropriate amendment or
adjustment to the appropriate schedule and the subcontractor shall not be
entitled to any additional payment or adjustment to the programme as a
consequence of such amendment or adjustment.
1.3 The singular shall include the plural and the plural the singular except where the context
otherwise requires and the words ‘he’, ‘him’ and ‘his’ shall be taken to mean ‘she’, ‘her’ and
‘hers’ where appropriate.
1.4 No Decision required under the Subcontract shall be unreasonably refused or delayed.
1.5 References to:

(a) ‘day’ shall mean a calendar day; and
(b) ‘includes’ or ‘including’ shall mean includes or including without limitation.
1.6 Any communication in accordance with or in connection with the Subcontract shall be in
writing, which shall include handwritten, typewritten or printed documents sent by hand,
post, fax, email or other means resulting in a permanent record.
1.7 The failure of either party to enforce any provision of the Subcontract shall not constitute a
waiver of his right to require complete performance by the other party. A party shall only
have waived his rights under the Subcontract if such waiver shall have been recorded in
writing and signed by a duly authorised representative of that party. No waiver of any
breach of the Subcontract shall constitute a waiver of any subsequent breach of the
Subcontract.

1.8
Any Notice to be served by one party on the other shall:
(a) be contained in a separate document and shall state the number(s) of the
Clause(s) or Sub-clause(s) in the Subcontract under which the Notice is issued;
and
(b) be sent to the person at the postal address or fax number stated in the Subcon-
tract Agreement, and shall be sufficiently delivered if marked for the attention of
that person and:
(i) left at the postal address stated in the Subcontract Agreement; or
(ii) sent to that address by Recorded Delivery or Special Delivery post; or
(iii) sent by fax to the fax number stated in the Subcontract Agreement.
In the case of a Notice left at the address stated in the Subcontract Agreement such
Notice shall be deemed to have been received on the day left at that address if left at or
before 5.00 pm on a day on which banks in England were open for business, or if left after
5.00 pm such Notice shall be deemed to have been received on the next day on which
banks in England were open for business.
In the case of a Notice sent by Recorded Delivery or Special Delivery post to the address
stated in the Subcontract Agreement or faxed to the fax number stated in the
Subcontract Agreement, such Notice shall be deemed to have been received on the day
on which it was recorded as delivered by Recorded Delivery or Special Delivery post or by
fax if delivered at or before 5.00 pm on a day on which banks in England were open for
business, or if recorded as delivered after 5.00 pm such Notice shall be deemed to have
been received on the next day on which banks in England were open for business.
Either party may at any time by Notice in writing to the other change the name of the
person to whom a Notice should be addressed, the postal address or fax number stated in
the Subcontract Agreement.
1.9 The headings and marginal notes in the Subcontract Conditions together with the
accompanying Introductory Notes, Guidance on compiling the Subcontract Agreement, its
Annex, the Subcontract Specification and Schedules, and Guide Notes shall not form part
of the Subcontract nor shall they be taken into consideration in the interpretation of the
Subcontract.
2. Co-operation
2.1 The parties and the Contract Manager shall each co-operate with each other in the
discharge of their respective obligations under the Subcontract with the aim of satis-
factorily completing the Subcontract Plant and the Subcontract Works in accordance
with the Subcontract.
2.2 The parties shall deal fairly, openly and in good faith with each other. Each party shall
disclose information which the other might reasonably need in order to exercise his rights
and to perform his obligations under the Subcontract. In particular, each party shall
promptly disclose full information to the other concerning any matter which will or may
prevent the Subcontract Plant and Subcontract Works being completed in accordance
with the Subcontract. The parties shall work together in a manner consistent with their
respective obligations under the Subcontract to resolve or mitigate the effect of any such
matter.
2.3 The parties shall cooperate to enable the contractor and/or the purchaser access to the
facility during its construction and prior to take over in order to allow the contractor and/or
the purchaser to carry out testing and commissioning of the equipment supplied under the
boiler supply contract following its installation and commissioning by the contractor
3. Subcontractor's responsibilities
3.1 In consideration of payment by the Contractor, the Subcontractor shall regularly and
diligently carry out and complete the Subcontract Works in accordance with the
Subcontract.

3.2 All work carried out by the Subcontractor shall be carried out with sound workmanship and
materials, safely and in accordance with good engineering practice and Legislation and
shall be to the reasonable satisfaction of the Contract Manager.

3.3 The Subcontractor shall set out the Subcontract Plant by reference to points, lines and
levels of reference provided to him by the Contract Manager.
The subcontractor shall set out any part of the facility that forms part of the
subcontract works and the subcontract plant by reference to points, lines and levels
of reference specified in the subcontract and/or provided to him by the contract
manager and notwithstanding any checking or approval by the contract manager of
the setting our of the facility and/or the subcontract plant, the contractor shall be
responsible for the correctness thereof
3.4 The Subcontract Plant as completed by the Subcontractor shall comply with the
Subcontract and shall be in every respect fit for the purpose for which it is intended as
defined in the Subcontract Specification or in any other provision of the Subcontract.
The subcontract plant as designed and completed by the subcontractor (to the extent
the subcontractor is responsible for the same) shall comply with the subcontract and
shall be in every respect fit for the purpose for which it is intended as defined in the
subcontract specifications the main contract or in any other provision of the
subcontract. An assembly drawing (other than the general arrangement) which does
not contain the same level detail as the precedent installation: drawing shall be
defective for the purposes of the subcontract
3.5 If at any time during the performance of the Subcontract the Subcontractor is of the
opinion that a change to the Subcontract Works or the design or method of operation of
the Subcontract Plant:
(a) is necessary to eliminate a potential defect in the Subcontract Plant ora specific
hazard to any person or party in the performance of the Subcontract Works or in
the operation of the Subcontract Plant which has occurred or would otherwise
occur; or
(b) would improve operating or life cycle costs of the Subcontract Plant; or
(c) would otherwise be beneficial to the Contractor or the Purchaser;
the Subcontractor shall promptly notify the Contract Manager accordingly.
The subcontractor shall promptly notify the contract manager accordingly stating the
reasons for its opinion and where appropriate, submit proposals for a variation in
accordance with clause 17 (variation proposed by the subcontractor)
3.6 The Subcontractor shall at all times have and maintain adequate resources available for
the proper and timely carrying out of the Subcontract Works, including financial
resources, and competent, appropriately qualified and experienced personnel.
3.7 Unless otherwise agreed, the Subcontractor shall at intervals of not more than one
calendar month report to the Contract Manager in accordance with Schedule 21 (Reports
and records) on the progress of the Subcontract Works, supporting his reports with
appropriate documents including any proposed revisions to the Approved Programme.
The Subcontractor shall provide and maintain in accordance with Sub-clause 40.1 records
as required by Schedule 21.
3.8 The Subcontractor shall maintain, and cause Sub-subcontractors to maintain, a quality
assurance system as described in Schedule 6 (Quality assurance and validation). The
existence of such a quality assurance system shall not relieve the Subcontractor from any
of his other duties, obligations or liabilities under the Subcontract. The Subcontractor
shall also prepare and implement a validation plan, if such a requirement is included in
Schedule 6.
3.9 The Subcontractor shall provide training as described in Schedule 9 (Training by

Subcontractor).
3.10 The Subcontractor acknowledges that the Subcontract Plant forms part of the Main
Contract Plant and that the Subcontract Works form part of the Main Contract Works,
and shall avoid putting the Contractor in breach of his obligations under the Main
Contract provided that, subject to Sub-clause 3.4, the Subcontractor shall only be liable
for those matters which have been made known to him in Schedule 22 (Main Contract
particulars).

The subcontractor acknowledges that the subcontract plant forms part of the facility and
that the subcontract works form part of the main contract works, and shall observe perform
and comply with the obligations and provisions of the main contract so far as they relate
and apply to the subcontract plant and the subcontract works. The subcontractor shall not,
by any act or omission cause or contribute to any breach by the contractor of the
contractors obligations under the main contract.
In carrying out and completing the subcontract works the subcontractor shall take into
account all other works being carried out in relation to the facility including but not limited to
any works being carried out by the contractor’s other subcontractors. The subcontractor
shall co-ordinate the subcontract works with all other works referred to in this subclause
3.12 and shall have no entitlement to an extension of time or an additional payment in
connection with any delay to the subcontract works or any additional costs incurred by the
subcontractor as a result of a failure to comply with this sub-clause 3.13
The subcontractor acknowledges that it has received and familiarised itself with a copy of
the draft connection agreement and that by entering into the subcontract, the subcontractor
shall be deemed to have notice of the full contents of the connection agreement and to
understand its full nature and effect, in particular relating to the:
A) Dno requirement
B) Importance of the works and where relevant the subcontract works meaning the dno
requirement on or before the g59 connection test. Date as set out in schedule 11,
table 1
3.14 save where otherwise expressly provided in this subcontract (the subcontractor shall
perform its obligations under the subcontract so that no act or omission on its part (or no
the part of any of its sub-subcontractors shall:
A) cause, contribute or otherwise give rise to any breach by contractor and/or the
purchaser of any of its obligations pursuant to the connection agreement, the operating
contract, the lease, the project document, the related obligations, the related provisions,
the boiler supply contract, and the commercial handling agreement (third party
agreements) and or
C) Cause, contribute or otherwise give rise to any other liability on the part of the
purchase and/or the contractor pursuant to or in connection with Third party
agreements.
To the extent relevant to the subcontract works, subcontract plant and subcontract
materials, the subcontractor shall comply with the third party agreements and
acknowledges that breach of these obligations may result in the purchaser becoming
liable under the relevant project document and/or in the contractor becoming liable
under or in connection with the main contract.
3.15 The subcontractor shall indemnify, defend and hold harmless the contractor from
any and all claims, judgements, losses, costs, injuries, damages, liabilities and

expenses including reasonable legal fees which it suffers or incurs resulting form or
arising out of:
A)any act or omission of the subcontractor and/or its sub-subcontractors which

causes or contributes to the contractor suffering a loss of any kind ( including but not
limited to any liquidated damages and liability under any indemnity) under or in
connection with the main contract, any third party agreements or any agreement
entered into by the contractor in relation to the facility and/or
B) any act or omission, breach of this subcontract, failure to comply with any
legislation or negligence of the csubcontractor and/or its subcontractors in connection
wihtt he subcontract works, the subcontract plant, the subcontract materials and/or
the subcontractors observance or performant of failure to observe or perform its other
obligations under this subcontract.
3.16 The subcontractor shall cooperate with the purchaser and the project manager,
provided that the subcontractor shall not without the prior authority of the contractor
comply with any instruction or direction received by thim directly from the purchaser or
project manager or clientrepresentative as appointed by the purchaser from time to
time. The subcontractor shall immediately inform the contractor of any such direct
instructions or directions
3.17 the subcontractor shall provide the subcontract works usch that the contractors
obligations and requirements under the main contract are faciliteated in particular
those obligations and requirements stated in schedule 15 (take over procedures) and
schedule 18 (performance tests and procedures)
4. Contractor's responsibilities
4.1 The Contractor, through the Contract Manager, shall provide the Subcontractor with the
Documentation described in Schedule 3 (Responsibilities of Contractor) and with all such
further information and Decisions as are referred to in the Subcontract or are necessary
to be provided by the Contractor to permit the Subcontractor to carry out and complete
the Subcontract Works at the times specified in the Subcontract. If no such times are
specified, the Contractor shall make such provision within a reasonable time with regard to
any date stated in Schedule 11 (Times of completion), the Approved Programme, the
actual progress of the Subcontract Works and all other relevant circumstances.
4.2 If the Subcontract provides in Schedule 3 or any Special Condition that the Contractor
shall carry out any work or provide any Free-lssue Materials, other materials, facil

4.3 ities or services which are necessary to permit the carrying out and
completion of the Subcontract Works by the Subcontractor then, subject
to any express descriptions thereof in the Subcontract, such work,
Free-lssue Materials, other materials, facilities or services shall be
carried out and provided:
If the subcontract provides in schedule 3 that the contractor shall carry out any work or
provide any materials, facilities or services which are necessary to permit the carrying out
and completion of the subcontract works by the subcontractor then, subject to any express
descriptions thereof in the subcontract, such work, materials, facilities or services shall be
carried out and provided:
(a) with sound workmanship and

materials, safely and in
accordance with good
engineering practice and
Legislation;
(b) in a manner consistent with the
proper carrying out and
completion of the Subcontract
Works in accordance with the
Subcontract;
(c) at the times specified in the
Subcontract, or if no such times
are specified, at reasonable
times having regard to any date
or period stated in Schedule 11,
the Approved Programme, the
actual progress of the
Subcontract Works and all other
relevant circumstances.
4.3
4.4
4.5
4.6
5. Decisions and Subcontract

If the Contractor will incur costs which
5.1 are to be reimbursed by the
4.7 Subcontractor under the Subcontract,
the Contractor shall notify the
Subcontractor before incurring such
costs and shall keep adequate
contemporary records of the work,
5.2
5.3
materials and resources involved. Such records shall be open to inspection by the
Subcontract Manager at all reasonable times.
Subject to any other provision of the Subcontract if the Subcontractor incurs additional
Cost as a result of any breach of contract by the Contractor the Subcontractor shall be
entitled to an addition to the Subcontract Price determined in accordance with and subject
to Clause 19 (Claims).
The Contractor shall provide, or ensure that the Purchaser provides, personnel with
adequate skills and experience:
(a) to carry out their duties under the Subcontract; and
(b) to operate and maintain the Subcontract Plant from the date of the Take Over
Certificate, and shall make such personnel available for training in accordance
with Schedule 9 (Training by Subcontractor).
The Contractor shall ensure that his personnel and anybody working under his or the
Contract Manager’s control shall at all times when at the Site be familiar with and comply
strictly with the requirements stated in Schedules 4 (Health & Safety) and 5
(Environmental protection & waste disposal) and any site safety regulations, safe working
procedures and health and safety instructions issued to the Subcontractor from time to
time by the Contract Manager, the Contractor, the Purchaser or the Project Manager
and shall further ensure that where necessary such personnel have undergone suitable
safety training and certification.
The Subcontractor shall not be liable for the consequences of any errors or omissions in
or arising from work carried out by the Contractor or on the Contractor’s behalf by others
(other than in respect of any design or information which the Subcontractor is required to
verify in accordance with his obligations under the Subcontract).
co-ordination
Every Decision, objection, proposal, claim or report to be issued, given or made under the
Subcontract shall be issued, given or made in writing. If any Decision, objection, proposal,
claim or report is issued, given or made orally, it shall be confirmed in writing by the issuing
party within seven days and shall be effective from the time and date of confirmation.
Any challenge, where permitted by the Subcontract, to a Decision, objection, proposal,

claim or report shall be supported by a statement and a summary of material facts upon
which it relies and shall unless otherwise provided be made within ten days of the receipt
of the said Decision, objection, proposal, claim or report.
Records of meetings signed in accordance with Sub-clause 29.3 shall constitute a report in
the context of this Clause 5 and shall have the same effect as a Decision.

5.4 In carrying out the Subcontract both parties shall comply with the requirements set out in
Schedule 20 (Subcontract co-ordination)
5.5 The subcontractor shall provide all documentation, advice consents, comments, approvals,
instructions, notices, requests, submissions, valuations, certificates and other
communications required as part of the subcontract works promptly so as to enable the
contractor to give such notice and provide such information as may be required under the
main contract, including but not limited to any notice required to enable the contractor to
claim and be entitled to such contractual benefits if any as may be claimable under the
main contract on account of compliance with any instruction issued by the contractor
and/or as a result of any other circumstances that may affect this subcontract
notwithstanding any other provision of this subcontract the subcontractors compliance with
this sub-clause 5.5 in respect of any circumstances giving rise to any entitlement of the
subcontractor to additional payment and or an extension of time shall be a condition
precedent to any such entitlement.
6. Sufficiency of Subcontract Price

6.1 Subject to the provisions of the Subcontract, the cost of carrying out the Subcontract
Works shall be at the risk of the Subcontractor, who shall be deemed to have obtained all
information and taken account of all circumstances which may affect such cost before
agreeing to the Subcontract Price.
6.2 The Contractor shall be responsible for the accuracy of any information provided by him or
on his behalf. Except where the Subcontract expressly requires the Subcontractor to
verify any such information, if any such information proves to be inaccurate and the
Subcontractor consequently incurs any increase in the Cost of performing his obligations
under the Subcontract, the Subcontractor shall be entitled to an addition to the
Subcontract Price determined in accordance with and subject to Clause 19 (Claims).
6.3 The contractor shall be responsible for the accuracy of any information provided by him or
on his behalf relating to the boiler supply contract. The subcontractor has had the
opportunity to scrutinise the contractor provided information listed in schedule 3. If any of
the contractor provided information (other than that relating to the boiler supply contract)
proves to be inaccurate ate and the subcontractor consequently incurs any increase in the
cost of performing his obligations under the subcontract and the cause of such increase in
cost has arisen by reason of any incomplete or inaccurate data in the remainder of the
contractor provided information and an experienced contractor exercising due skill and
care would not have discovered the same when scrutinising the remainder of the
contractor provided information, the subcontractor shall give notice of the same under sub-
clause 5.5 and clause 19 (claims). The contract Manager shall decide to what extent the
discrepancy could not reasonably have been so discovered. If the parties cannot agree
within seven (7) days of the contract manager’s decision, the matter shall be referred for
resolution in accordance with clause 48 (dispute resolution).
6.4 If during the carrying out of the Subcontract Works the Subcontractor encounters on the
Site any physical condition which at the date of the Subcontractor’s tender as stated in
the Subcontract Agreement would not reasonably have been foreseen by a properly
qualified and competent subcontractor having all the information which the Subcontractor
then had or could have obtained by a visual inspection of the Site or by reasonable
enquiry, and if the Subcontractor considers that he will in consequence of such condition
incur an increase in the time or Cost of performing his obligations under the Subcontract,
he shall notify the Contract Manager within ten days of becoming aware of such
unforeseen condition and otherwise shall comply with the requirements of Clause 19. Any
such notification shall:
(a) expressly state that it is given under this Sub-clause 6.3;
(b) specify the condition encountered;
(c) specify the steps which the Subcontractor is taking or proposing to take to
overcome the condition encountered;
(d) contain estimates of the effect on the Approved Programme of the condition and
the additional Cost which the Subcontractor is likely to incur; and
(e) state how the Subcontractor proposes to minimise such effect and additional Cost
and/or time.

If the Subcontractor is unable to include in such notification any of the information listed in
(b) to (e) above, he shall provide it to the Contract Manager in accordance with Clause
19.
The Subcontractor shall be entitled to an addition to the Subcontract Price determined in

accordance with and subject Clause 19 in respect of the additional reasonably incurred
Cost of:
Subject to sub-clause 5.5, the subcontractor shall be entitled to an addition to the

subcontract price determined in accordance with and subject to clause 19 in respect of the
additional reasonably incurred cost of
(i) complying with any instruction of the Contract Manager; or
(ii) in the absence of any instruction from the Contract Manager, doing whatever is
reasonably necessary;
in consequence of the conditions specified in a notification issued under this Sub-clause
6.3.
The entitlement of the subcontractor to an addition of the contract price under this sub-
clause 6.3 shalll not apply to the extent the physical condition is one which the
subcontractor was required to verify under sub-clause 6.2 or of which the subcontractor is
deemed to have notice under the subcontract or for which the subcontractor is otherwise
responsible under these general conditions.
7. Statutory and other obligations

7.1 The Contractor and the Subcontractor shall in all matters relating to the Subcontract
comply with all Legislation. The Contractor shall obtain, or ensure that the Purchaser
obtains, all permits required from government and local authority or any other necessary
permissions in connection with the use of the Site for the construction, operation and
maintenance of the Subcontract Plant with the exception of those permissions, if any,
specified in Schedule 1 (Description of the Subcontract Works) or in any Special
Condition, the preparation and submission of the applications for which, together with
doing whatever is reasonable to obtain such permissions, shall be the responsibility of the
Subcontractor.
The contractor and the subcontractor shall in all matters relating to the subcontract
comply with all legislation. The contractor shall obtain, or ensure that the purchaser
obtains, all permits required from government and local authority or any other
necessary permissions in connection with the use of the site for the construction,
operations and maintenance of the facility with the exception of those permissions, if
any specified in schedule 1 (description of the subcontract works), the preparation
and submission of the applications for which together with doing whatever is
reasonable to obtain such permissions shall be the responsibility of the
subcontractor. The subcontractor shall provide all reasonable assistance (both in
respect of scope and timing) to the contractor in obtaining the permits for which the
contractor (or the purchaser) is responsible under this clause
The subcontractor shall be required to obtain and maintain all consents, permits,
licences and permission required for it to perform its obligations as a contractor under
the subcontract, including building regulation consents (as distince form permit,
licences and permission enabling the purchaser to construct an doperate a power
plant such as the environmental permit) including:
A) To enable it to comply with all legislation applicable to it or its sub-subcontractors

B) For the delivery to and storage at the site of subcontract materials, including
clearance through customs (Except in relation to the delivery of boiler plan): and
C) For the delivery to, storage at and removal from the site of the subcontractors
equipment

7.2 The Subcontractor shall develop, implement and maintain the Health and Safety and
Environmental Plans stated in Schedules 4 (Health & Safety) and 5 (Environmental
protection & waste disposal) to take account of the development of the design, construction
and maintenance procedures of the Subcontract Plant having particular regard to the
health and safety of all personnel involved with construction work on the Site and of all
personnel who will be involved with the operation and maintenance of the Subcontract
Plant, and the impact of the Subcontract Plant and its operation on the environment.
Such requirements shall not release the Subcontractor from any of his legal responsi-
bilities for safety or environmental protection within the Site.
7.3 If after the date of the Subcontractor’s tender as stated in the Subcontract Agreement,
there shall be enacted or brought into force any Legislation which causes an increase or
decrease in the Cost to the Subcontractor of carrying out any part of the Subcontract
Works, either party or the Contract Manager may give notification within ten days of such
circumstances and the Contract Manager shall determine an appropriate addition to or
deduction from the Subcontract Price by means of a Variation Order. When reasonably
requested to do so by the Contract Manager the Subcontractor shall assist in such
determination by the provision to the Contract Manager of the make-up of the
Subcontract Price or of any relevant part thereof.
7.4 Notwithstanding anything contained in this Clause 7, all taxes, levies, rates,
charges, national insurance contributions and the like assessed on the Subcontractor
including any changes therein and all taxes, withholdings and the like on or calculated by
reference to the Subcontractor’s profits or deemed profits shall be borne by the Subcon-
tractor. For the avoidance of doubt this Sub-clause 7.4 does not apply to Value Added
Tax, provision for which is made in Sub-clause 41.13.
7.5 Notwithstanding anything contained in this clause 7, but subject to any express
provision to the contrary elsewhere in the subcontract all taxes, levies rates, charges,
national insurance contributions and the like assessed on the subcontractor including any
changes therein and all taxes, withholdings and the like on or calculated by reference to
the subcontractors profits or deemed profits shall be borne by the subcontractor, for the
avoidance of doubt this sub-clause 7.4 does not apply to value added pax provision for
which is made in sub-clause 4.1.13 or foreseeable changes in law
8. Patent and other protected rights

8.1 The Subcontractor shall be responsible for all fees, royalties and other charges, payable
under the terms of any licence or permission obtained by him in respect of:
(a) any design of the Subcontract Plant provided by the Subcontractor;
(b) the manufacture and supply of the Subcontract Plant;
(c) any work done or method employed in the carrying out of the Subcontract Works;
and
(d) Third Party Software.
8.2 The Contractor shall be responsible for, or shall ensure that the Purchaser is responsible
for, the payment of all fees, royalties and other charges, if any, that may be payable under
the terms of any licence or permission in respect of the operation or use of the
Subcontract Plant or any part thereof to the extent that they are not included in the
Subcontract Price.
8.3 If any design of the Subcontract Plant provided by the Subcontractor, or any item of the
Subcontract Plant manufactured or supplied by him, or any work done or method
employed by him in carrying out the Subcontract Works should infringe or be claimed to
infringe any patent, registered design, design right, trade mark, copyright or other
intellectual property right protected by law, the Subcontractor shall indemnify the
Contractor against all damages, liabilities, claims, costs and expenses that may result
from such infringement or claimed infringement, provided always that this indemnity shall
not apply to any such patent, registered design, design right, trade mark, copyright or any
other property right protected by law first granted, registered or created after the date of the
Subcontractor’s tender as stated in the Subcontract Agreement nor to any use of the

Subcontract Plant otherwise than for the purpose or in the manner indicated by or
reasonably to be inferred from the Subcontract. The Subcontractor shall use reasonable
endeavours to keep the Contract Manager informed of any further patent, registered
design, design right, trade mark or copyright which may be published, registered or created
and which may affect the obligations of the parties hereunder.
8.4 In the event of any claim being made or proceedings commenced against the Contractor
to which the indemnity set out in Sub-clause 8.3 applies, the Contractor shall promptly
notify the Subcontractor who shall:
(a) immediately discuss with the Contractor the action(s) that the Subcontractor
intends to take in dealing with such claim and in conducting such proceedings;
(b) deal with such claim and conduct such proceedings in the Contractor’s name; and
(c) at all times keep the Contractor fully informed as to his progress in dealing with
such claim or conducting such proceedings.
If within fourteen days of the Contractor’s notification the Subcontractor fails to notify the
Contractor that he intends to deal with such claim or conduct such proceedings then the
Contractor shall be free to deal with such claim or conduct such proceedings on his own
behalf. Unless the Subcontractor has failed to notify the Contractor within the period
stated above, or fails at anytime to comply with the other requirements of this Sub-clause
8.4, the Contractor shall not make any admission prejudicial to such proceedings.
8.5 If any Documentation or instructions provided to the Subcontractor by the Contractor or

the Contract Manager shall cause or be claimed to cause an infringement of any patent,
registered design, design right, trade mark, copyright or other intellectual property right
protected by law the Contractor shall indemnify the Subcontractor against all damages,
liabilities, claims, costs and expenses that may result from such infringement or claimed
infringement.
8.6 In the event of any claim being made or proceedings commenced against the Subcon-
tractor to which the indemnity set out in Sub-clause 8.5 applies, the Subcontractor shall
promptly notify the Contractor who shall:
(a) immediately discuss with the Subcontractor the action(s) that the Contractor
intends to take in dealing with such claim and in conducting such proceedings;
(b) deal with such claim and conduct such proceedings in the Subcontractor’s name;
and
(c) at all times keep the Subcontractor fully informed as to his progress in dealing with
such claim or conducting such proceedings.
If within twenty-eight days of the Subcontractor’s notification the Contractor fails to notify
the Subcontractor that he intends to deal with such claim or conduct such proceedings
then the Subcontractor shall be free to deal with such claim or conduct such proceedings
on his own behalf. Unless the Contractor has failed to notify the Subcontractor within the
period stated above, or fails at any time to comply with the other requirements of this Sub-
clause 8.6, the Subcontractor shall not make any admission prejudicial to such
proceedings.
8.7 The copyright and all other intellectual rights in all Documentation provided by the
Subcontractor under the Subcontract shall remain vested in the Subcontractor or his
Sub-subcontractors as the case may be, subject to the pre-existing rights of the
Contractor or any third party.
8.8 The Contractor and the Purchaser shall have the right to use such Documentation in
connection with the design, construction, operation, maintenance and repair of the
Subcontract Plant. The Contractor and the Purchaser shall have the further right without
additional payment to the Subcontractor to use any such Documentation for the purpose
of making any improvement to or enlargement of the Subcontract Plant, provided that
such improvement or enlargement does not result in the construction of any separate or
additional production plant.
The subcontractor hereby grants to the contractor and the purchaser or shall procure the
grant to the contractor and the purchaser of a perpetual, transferable, non-exclusive,
royalty free, sub-licensable, and irrevocable licence to use such documentation in
connection with the design, construction, operation, maintenance and repair of the
subcontractor plant and/or the facility. Such licence shall include without limitation a right to
use, amend, copy, extend or modify any of the documentation in connection with the
design, construction, operation, maintenance, repair and expansion of the subcontract
pland and/or the facility. The contractor and the purchase shall have the further right
without additional payment ot he subcontractor to use any such documentation for the

purpose of making any improvement to or enlargement of the subcontract plant and/or the
facility, provided such improvement or enlargement does not result in the construction of
any separate or additional production plant or does not result in an increase in the
production capacity of the main contract plant of more than twenty five per cent over the
original design.
8.9 Title in the Applications Software shall pass to the Contractor upon its installation within
the Subcontract Plant. The Contractor shall be entitled to pass such title to the
Purchaser. The Subcontractor shall grant to or obtain for the Contractor and the
Purchaser an irrevocable royalty free licence to use for the lifetime of the Subcontract
Plant all Third Party Software and Subcontractor’s Software necessary for the operation
or maintenance of the Subcontract Plant.
8.10 Within twenty-one days of the issue of the relevant Take-Over Certificate, the Subcon-
tractor shall supply to the Contractor, who shall be entitled to supply to the Purchaser,

8.11 a copy of the Applications Software, together with all Documentation
necessary to allow the Contractor to maintain, modify and compile
the Applications Software into an executable form in combination with
9. Subcontracting and third party the Third Party Software and the Subcontractor’s Software, as detailed in the
rights
Subcontract Specification.
9.1 Neither the Contractor nor the Subcontractor shall without the previous consent of the
other transfer any benefit or obligation under the Subcontract to any other person in whole
or in part, except that
(a) the Subcontractor may without such consent transfer the right to receive any
money which is or may become due to him under the Subcontract; and
(b) if so required by the Purchaser under the Main Contract the Contractor may
assign the Subcontract to the Purchaser.
(c) The contractor may assign the subcontract to any affiliate of the contractor
(d) If so required by the purchaser: the subcontractor shall enter into a deed of
novation with the purchaser and the contractor, within 7 days of the contractors
request. If the subcontractor defaults in the execution and/or delivery of deed of
novation requested by the contractor no monies shall fall due to the subcontractor
under this subcontract until the subcontractor has remedied its default.
9.2 The Subcontractor may not subcontract the whole of the Subcontract Works.
Subject to Clause 10 (Nominated Sub-subcontractors) and Schedule 7 (Subcontracting),
the Subcontractor may subcontract any part of the Subcontract Works as the
Subcontractor Contractor considers appropriate.
The subcontracting by the Subcontractor of any part of the Subcontract Works shall not
relieve the Subcontractor in any way from his obligations under the Subcontract.
Subject to schedule 7 (subcontracting), the subcontractor may subcontract any part

of the subcontract works as the subcontractor contractor considers appropriate,
provided that the employment of each sub-subcontractor and the terms of their
appointment will be subject to the contractors approval (such approval not to be
unreasonably withheld or delayed)
The subcontracting by the subcontractor of any part of the subcontract works shall
not relieve the subcontractor in any way from his obligations under the subcontract.
9.3 The Subcontractor shall use reasonable endeavours:

(a) to ensure that each of his Sub-subcontractors is required to observe equivalent
contractual obligations to those set out in these General Conditions and in any
Special Condition and to observe any provision of the Subcontract which apply to
subcontracts; and
(b) to include in any subcontract for any work or Subcontract Materials a provision
that the Sub-subcontractor shall make good any Defect in such work or
Subcontract Materials notified at any time before the expiry of the applicable
defects liability period under the Main Contract and that the Purchaser and the
Contractor shall be entitled to enforce such provision directly against the Sub-
subcontractor.
9.4 No subcontract shall contain any provision that makes payment to the Subsubcontractor
by the Subcontractor dependent upon the receipt by the Subcontractor of any payment
due under the Subcontract.
9.5 The Subcontractor shall include in any subcontract under which Confidential Information
referred to in Sub-clause 20.2 is to be disclosed to the Sub-subcontractor a provision that
the Sub-subcontractor shall observe the same obligations of confidentiality as those of the
Subcontractor, and that the Contractor or the Purchaser shall be entitled to enforce such
provision directly against the Sub-subcontractor.
9.6 The subcontractor shall include in any subcontract under which confidential information
referred to in sub-clause 20.2 is to be disclosed to the sub-subcontractor a provision that
the sub-subcontractor shall observe the same obligations of confidentially as those of the

subcontractor, and that the contractor or the purchaser shall be entitled to enforch such
provision directly against the sub-subcontractor. The subcontractor shall ensure that with
respect to any information originating from the boiler supplier, the relevant sub-
subcontractor enters into a non-disclosure agreement directly with the boiler supplier on
the same terms as has the contractor itself. Nothing in the subcontract shall moderate the
scope or duration of the non-disclosure agreement entered into between the subcontractor
and the boiler supplier. If the subcontractor defaults in the delivery of any non-disclosure
agreement requested by the contractor no monies shall fall due to the subcontractor under
this subcontract until the subcontractor has remedied its default.
9.7 The Contractor agrees that his obligations under Sub-clauses 20.3, 30.11 and 30.14 shall
be capable of being enforced directly by any Sub-subcontractor.
9.8 The Subcontractor agrees that his obligations under:

(a) Sub-clauses 20.2 and 20.4 and Clause 37 (Liability for Defects) shall be capable of
being enforced directly by the Purchaser;
(b) Sub-clauses 30.10, 30.13 and 30.15 shall be capable of being enforced directly by
the Purchaser, the Project Manager or any Affiliate of the Purchaser to whom
the relevant indemnity applies.
(c) Sub-clauses Clause 37 (Liability for Defects) shall be capable of being enforced
directly by the purchaser
(d) Sub-clauses 20.2, 20.4, 30.13 and 30.15 shall be capable of being enforced
directly by the purchaser
(e) Subclauses 30.10, shall be capable of being enforced directly by the purchaser,
the project manager or any affiliate of the purchaser to whom the relevant
indemnity applies
9.9 Save as expressly provided in this Clause 9, no person other than a party to this
Subcontract shall have any right to enforce any of its terms under the Contracts (Rights of
Third Parties) Act 1999. Save for the rights of the Purchaser under Subclause 9.7, the
Contractor and the Subcontractor may by agreement rescind or vary the Subcontract
without the consent of any beneficiary who has rights to enforce a term of the
Subcontract, even if as a result that beneficiary’s rights to enforce a term of the
Subcontract will be varied or extinguished.

10. Nominated Sub-subcontractors
10.1 If the Subcontract provides that any work shall be done or Subcontract Materials or
services supplied by a Sub-subcontractor named in the Subcontract and stated to be a
Sub-subcontractor nominated by the Contractor, the Subcontractor shall enter into a
subcontract in accordance with such nomination. Sub-clauses 10.3,10.4 and 10.5 shall
not apply in respect of that Sub-subcontractor.
10.2 If the Subcontract provides that any work shall be done or Subcontract Materials
or services supplied by a Sub-subcontractor to be nominated by the Contract Manager,
the Contract Manager shall make the necessary nomination at a reasonable time having
regard to the progress of the Subcontract Works and, subject to Sub-clauses 10.3 and
10.4, the Subcontractor shall enter into a subcontract in accordance with such
nomination.
10.3 If the Subcontractor considers that:

(a) compliance with the nomination received in accordance with Sub-clause 10.2
would prevent the Subcontractor from or hinder him in fulfilling any of his obli-
gations under the Subcontract; or
(b) the nominated sub-subcontractor is unwilling to enter into a subcontract
containing obligations on the sub-subcontractor which correspond to those of the
Subcontractor under the Subcontract and provide the Subcontractor with
reasonable remedies in the event of a breach thereof by such subsubcontractor;
or
(c) the nominated sub-subcontractor is unlikely to be reliable or competent in his
performance of the subcontract;
he shall so notify the Contract Manager with reasons within twenty-one days of receipt of
the nomination and before entering into a subcontract with the nominated sub-
subcontractor.
10.4 Upon receipt of any notification under Sub-clause 10.3 and unless otherwise agreed:
(a) the Contract Manager shall withdraw the nomination and nominate another sub-
subcontractor in accordance with Sub-clause 10.2; or
(b) if the Subcontractor and the Contract Manager agree terms the Contract
Manager shall issue a Variation Order confirming the nomination, in which case
the Subcontractor shall enter into a subcontract with the nominated sub-
subcontractor on the terms agreed with the Contract Manager; or
(c) the Contract Manager shall withdraw the nomination and issue a Variation
Order omitting the work, Subcontract Materials or services in question, in which
case the Contractor may enter into a direct contract with the previously
nominated sub-subcontractor.
10.5 In the event that the Subcontractor does not notify the Contract Manager under Sub-
clause 10.3 above, he shall be obliged to accept the Contract Manager’s nomination.
10.6 Subject to the Subcontractor using reasonable endeavours to recover from any
nominated Sub-subcontractor any loss suffered by the Subcontractor as a result of the
failure of that nominated Sub-subcontractor to perform his obligations under the relevant
subcontract, the Contractor shall indemnify the Subcontractor against all damages,
liabilities, claims, costs and expenses that the Subcontractor may suffer as a
consequence of that failure by the nominated Sub-subcontractor provided that:
(a) the Subcontractor shall notify the Contract Manager within a reasonable time of
becoming aware of such failure;
(b) the failure to perform of such Sub-subcontractor did not result from any failure of
the Subcontractor himself (and not any Sub-subcontractor) to exercise the
reasonable skill and care to be expected of a properly qualified and competent
subcontractor; and
(c) the Subcontractor shall not take legal proceedings against that nominated Sub-
subcontractor without the Contractor’s agreement to the action.

10.7 If any payment to a nominated Sub-subcontractor has been improperly withheld by the
Subcontractor then the Contractor shall be entitled to notify the Subcontractor that he
intends to make such payment direct to the Sub-subcontractor. If after fourteen days, the
payment is still withheld and the Subcontractor has failed to furnish adequate reason why
it should be withheld, the Contractor may, except in the event of the Subcontractor’s
insolvency, make such payment and shall be entitled to recover from the Subcontractor
the amount so paid.
10.8 Any disagreement arising under this Clause 10 which is not settled in accordance with
Clause 46 (Disputes) may be referred to an Expert in accordance with Clause 48
(Reference to an Expert).
11. The Contract Manager

11.1 The Contract Manager shall have full authority to act on behalf of the Contractor in
connection with the Subcontract, except to the extent otherwise stated in Subclause 36.5,
and:
(a) the Contractor shall cause the Contract Manager to perform reasonably and in a
timely manner every act required under the Subcontract to be performed by the
Contract Manager;
(b) any obligation stated under the Subcontract to be an obligation of the Contract
Manager shall be deemed to be an obligation of the Contractor;
(c) the Contractor shall be responsible for any act, neglect or omission of the
Contract Manageras ifitwereanact, neglectoromissionofthe Contractor; and
(d) in all matters where the Contract Manager is required or authorised under the
Subcontract to exercise his discretion or make a judgment or form an opinion he
shall do so impartially and to the best of his skill and judgment as a professional
engineer.
11.2 The Contract Manager may at any time instruct the Subcontractor to carry out the
Subcontract Works or any part thereof as the Contract Manager may require and the
Subcontractor shall comply with such instruction within a reasonable period to be agreed
between the Contract Manager and the Subcontractor.
The contract manager may at any time instruct the subcontractor to carry out the
subcontract works or any part thereof as the contract manager may require and the
subcontractor shall comply with such instruction, provided it has obtained written
confirmation of the same from the contractor, within a reasonable period to be agreed
between the contract manager and the subcontractor
If the Subcontractor is of the opinion that compliance with an instruction of the Contract
Manager would:
(a) constitute a Variation; or
(b) prevent him or hinder him in fulfilling any obligation under the Subcontract;
(c) be a matter described in paragraph (a), (b), (c), (d) or (e) of Sub-clause 16.6;
he shall so notify the Contract Manager within fourteen days. The Contract Manager
may request the Subcontractor to provide justification for his opinion. The Subcontractor
shall be entitled to an addition to the Subcontract Price for preparing the justification,
determined in accordance with and subject to Clause 19 (Claims).
If the Contract Manager accepts the Subcontractor’s opinion, he shall withdraw the
instruction and if appropriate issue a Variation Order under Clause 16 (Variations).
11.3 The Contractor may from time to time appoint some other individual as Contract
Manager in place of the individual previously so named or appointed and shall notify the
Subcontractor without delay.
11.4 The Contract Manager may notify the Subcontractor of the appointment of any individual
to act as a Contract Manager’s Representative and may from time to time by further
notification change such appointment. Any such Contract Manager’s Representative
shall have authority to reject any designs, workmanship or materials which are not in
accordance with the Subcontract, but the Subcontractor may within seven days of such
rejection and before complying with it appeal against it to the Contract Manager. Any
such Contract Manager’s Representative shall also have authority to receive on behalf
of the Contract Manager any notification to be given to the Contract Manager under the
Subcontract by the Subcontractor, but the Subcontractor shall also send a copy of any
such notification directly to the Contract Manager.
11.5 Subject to Sub-clauses 12.5 and 28.4, the Contract Manager may notify the Subcon-
tractor that he authorises any Contract Manager’s Representative to exercise any of the
powers and functions of the Contract Manager under the Subcontract and may by
further notification cancel or modify any such authority, but not with retrospective effect.
11.6 If in the absence of the necessary authority from the Contract Manager a Contract
Manager’s Representative has given the Subcontractor any Decision which should
have been given by the Contract Manager, the Subcontractor may, within seven days of
receipt, advise the Contract Manager of such Decision. Unless the Contract Manager
withdraws that Decision within seven days of receipt of such advice, the Decision shall
have effect as if it had been given by the Contract Manager. In the event that the
Subcontractor does not advise the Contract Manager of any such Decision within seven
days of receipt, the Decision shall be deemed to have been given with the authority of the
Contract Manager.
11.7 Except as otherwise provided in or under the Subcontract, all communications between
the Contractor and

12. Subcontract Manager and Subcontractor's staff
the Subcontractor relating to the Subcontract Works shall be
between the Contract Manager and the Subcontract Manager.
12.1 The Subcontract Manager shall have full authority to act on the Subcontractor’s
behalf in connection with the Subcontract. The Subcontractor shall not replace the
Subcontract Manager without the consent of the Contract Manager. The Subcontractor
shall at all times until the issue of the last Final Certificate ensure that a suitable
individual is appointed to act as Subcontract Manager. The Subcontract Manager shall
appoint a deputy to act in his place in his absence. The Subcontract Manager shall notify
the Contract Manager of the appointment of such a deputy who shall be deemed to have
full authority to act on the Subcontractor’s behalf.
12.2 Whenever the Subcontractor is carrying out work at the Site the Subcontractor shall
ensure that a suitable individual is employed at the Site as Subcontractor’s Site
Manager. The Subcontractor shall notify the Contract Manager of the individual so
appointed as Subcontractor’s Site Manager and shall not make or change such
appointment without the prior consent or requirement of the Contract Manager.
The Subcontractor’s Site Manager shall supervise all work done at the Site by the
Subcontractor and shall receive on behalf of the Subcontractor all Decisions given to
the Subcontractor at the Site by the Contract Manager or any Contract Manager’s
Representative. The Subcontractor’s Site Manager shall be present at the Site during
normal working hours except when on leave, sick or absent for reasons connected with
the proper performance of the Subcontract or as agreed with the Contract Manager.
Whenever the Subcontractor’s Site Manager is absent from the Site during normal
working hours, a suitable individual shall be appointed to act as his deputy. The
Subcontractor’s Site Manager shall not be employed by the Subcontractor to do work
under other contracts without the agreement of the Contract Manager.
From the commencement of the subcontract works at the site until the whole of the
subcontract plant has been accepted by the contractor, the subcontractor shall
ensure that a suitable individual is employed at the site as a subcontractors site
manager. The subcontractor shall notify the contract manager of the individual so
appointed as subcontractors site manager and shall not make or change such
appointment without the prior consent or requirement of the contract manager.
The subcontractors site manager shall supervise all work done at the site by the
subcontractor and shall receive on behalf of the subcontractor all decisions given to
the subcontractor at the site by the contract manager or any contract managers
representative. The subcontractors site manager shall be present at the site during
normal working hours except when on leave, sick or absent for reasons connected
with the proper performance of the subcontract or as agreed with the contract
manager. Whenever the subcontractors site manager is absent from the site during
normal working hours, a suitable individual shall be appointed to act as his deputy.
The subcontractors site manager shall not be employed by the subcontractor to do
work under the other contracts without the agreement of the contract manager.
12.3 The Subcontractor shall provide the further supervisory staff specified in Schedule 8
(Subcontractor’s named personnel). The Subcontractor shall ensure that at all times
there are sufficient suitably qualified and experienced staff to supervise all work being
done by the Subcontractor at the Site and, where required by the Subcontract, to advise
and assist the Contractor and the Purchaser in starting up the Subcontract Plant,
carrying out the performance tests and operating the Subcontract Plant until its
Acceptance.
12.4 The Subcontractor shall not replace any key personnel named in Schedule 8 without the
consent of the Contract Manager.
The Subcontractor shall not replace any key personnel named in schedule 8 without the
consent of the contract manager and subcontractor shall in any event require the consent
of the contract manager with respect to the appointment of any subcontractor personnel
who are to perform or be involved in any aspect of the performance of (a) take over
procedures set out in schedule 15 of the main contract and b) the commissioning tests as
defined in schedule 24 of the main contract
12.5 If the Contract Manager is of the opinion that the Subcontractor’s Site
Manager or any member of the Subcontractor’s supervisory staff at the Site is
incompetent or has misconducted himself or been in material breach of his
duties, he may notify the Subcontractor that he requires such person to leave
the Site with immediate effect. The Subcontractor shall be under an obligation to
act on the Contract Manager’s notification forthwith and to replace such person
as soon as practicable. Provided it is given in good faith and does not amount
to unlawful discrimination, any Decision given by the Contract Manager under
this Sub-clause 12.5 shall be final, conclusive and binding. The Contract
Manager shall not delegate the power to give notification under this Sub-clause
12.5. The Contractor shall have no obligation to pay the Subcontractor for
replacing the person.
13. Times of completion and Approved Programme

13.1 Subject to Clause 14 (Delays), the Subcontractor shall complete the construction of the
Subcontract Plant ready for carrying out the Take Over procedures on or before the
date, or within the period, specified in Schedule 11 (Times of completion) and shall also
complete the construction of any Section of the Subcontract Plant and do any other thing
in the performance of the Subcontract on or before the dates, or within the periods,
specified in Schedule 11.
Subject to Clause 14 (delays) the subcontractor shall complete the construction of

the subcontract plant ready for carrying out the take over procedures on or before
the date or within the period, specified in schedule 11, table 2 (times of completion.
The subcontractor shall also complete the construction of the subcontract plant and
do any other thing in the performance of the subcontract on or before the dates or
within the periods specified in schedule 11, table 2 and in sufficient time to facilitate
the efficient progress of the main contract works in accordance with the main
contract.
13.2 The Subcontractor shall within the time stated in Schedule 11 prepare and submit to the
Contract Manager for his approval a programme of work setting out in any manner that
the Contract Manager may reasonably require the sequence in which and dates by which
the Subcontractor proposes to perform his obligations under the Subcontract and the
date(s) by which the Subcontractor reasonably requires that the Contractor should
provide any further Documentation or information or take any other action to permit the
Subcontractor to perform his obligations. The programme shall take account of all
matters which may affect the completion of the Subcontract Works. If the programme
submitted by the Subcontractor is consistent with any dates and periods specified in the
Subcontract and is otherwise reasonable, the Contract Manager shall approve it and it
shall be the Approved Programme.
The Subcontractor shall use reasonable endeavours to perform his obligations under the
Subcontract in accordance with the Approved Programme.
The Subcontractor shall use reasonable endeavours to perform his obligations under
the subcontract tin accordance with the approved programme provided that this
reasonable endeavours obligation shall not in any way qualify the extent of the
subcontractors liability for delays under clause 15 of these general conditions.
13.3 If required by the Contract Manager, the Subcontractor shall submit details of the
qualifications and experience of the personnel whom the Subcontractor proposes to
employ on the Subcontract Works at various times, and the other resources which he will
have available in order to perform his obligations under the Subcontract and in
accordance with the Approved Programme. The details shall be in such form as required
by the Contract Manager. The Subcontractor shall employ and make available
personnel and resources conforming to such proposals.
13.4 If at any time progress falls behind the Approved Programme, or it becomes clear that it
will fall behind, the Contract Manager may require the Subcontractor either to take such
steps as may be practicable in order to achieve the Approved Programme or to revise
the Approved Programme in the light of the circumstances and to re-submit it to him for
his approval. If the Contract Manager approves the revised programme it shall thereafter
be the Approved Programme.
13.5 Without prejudice to Sub-clause 13.4, if the Contract Manager decides that progress by
the Subcontractor in carrying out the Subcontract Works is likely to prejudice the
Subcontractor’s ability to complete the construction of the Subcontract Plant, or any
Section, in accordance with Sub-clause 13.1, and that this is due to a cause for which the
Subcontractor is responsible, the Contract Manager may notify the Subcontractor to
that effect. Following such notification the Subcontractor shall remedy the potential delay
at his own cost.
13.6 If when the Contract Manager requires the Subcontractor to revise the
Approved Programme the Subcontractor fails to submit a revised programme
within a reasonable time, or if the Subcontractor submits a revised programme
which the Contract Manager is unable to approve for good reason, the Contract
Manager may instruct the Subcontractor to make reasonable revisions to the
programme and the Subcontractor shall as soon as possible make such
revisions and the revised programme shall thereafter be the Approved
Programme.
13.7 The exercise by the Contract Manager of his powers under Sub-clauses 13.4, 13.5 and
14. Delays 13.6 above shall not change any of the Subcontractor’s obligations to the Contractor
under the Subcontract.
14.1 If the Subcontractor is delayed in the performance of any of his obligations under the
Subcontract by any of the matters specified in Sub-clause 14.4 or by Force Majeure he
shall notify the Contract Manager as soon as possible after becoming aware of the delay.
As soon as reasonably possible after that, the Subcontractor shall notify the Contract
Manager of any extension to any date or period specified in the Subcontract for the
completion of such obligations as he considers would be fair and reasonable in the
circumstances. The Subcontractor shall keep records made at the time of the
circumstances, extent and effect of such delay.
The Contract Manager shall as soon as possible, and in any event within fourteen days
of receipt of the Subcontractor’s notification as to the extension to any date or period
specified in the Subcontract that the Subcontractor considers would be fair and
reasonable, notify to the Subcontractor an initial assessment of any extension to any date
or period specified in the Subcontract which the Contract Manager considers
appropriate based on the information available to him at that time.
Thereafter the Contract Manager may from time to time review and notify to the
Subcontractor the need for and amount of any extension to any date or period speci fied
in the Subcontract sought by the Subcontractor having regard to all the information
available to the Contract Manager at the time of any review.
The Contract Manager shall undertake a review having regard to all the information
available to him of the need for and amount of any extension sought by the Subcon-
tractor after the later of either the occurrence of any date or the expiration of any period
specified in the Subcontract or as applicable the occurrence of any extension of any date
or the expiration of any extension of any period stated in the Subcontract.
The Contract Manager shall undertake a final review having regard to all the information
available to him of the need for and amount of any extension sought by the
Subcontractor after the Subcontractor has completed his obligations in respect of any
date or period specified in the Subcontract.
If the subcontractor is delayed in the performance of its obligations under the

subcontract by any of the matters specified in sub-clause 14.4 or by force majeure
he shall (without prejudice to sub-clause 5.5) notify the contract manager as soon
as possible after becoming aware of the delay and in any event within three
business days after becoming aware of the delay.
As soon as reasonably possible after that and in any event within 7 days after
becoming aware of the delay, (without prejudice to sub-clause 5.5) the subcontractor
shall notify the contract manager of any extension to any date or period specified in
the subcontract for the completion of such obligations as he considers would be fair
and reasonable in the circumstances, having regard to the facts available to him at
such time. The subcontractor shall keep records made at the time of the
circumstances, extend and effect of such delay. If the event giving rise to the delay is
continuing, the subcontractor shall provide the contract manager with notifications on
monthly intervals giving details of the accumulated delay and such further particulars
as the contract manager may reasonably require. The subcontractor shall send a
final notification within 5 days after the end of the effect resulting from the event or
circumstance giving rise to the delay.
The contract manager shall as soon as possible, and in any event within twenty one
days of receipt of the subcontractors notification as to the extension to any date or
period specified in the subcontract that the subcontractor considers would be fair
and reasonable, notify to the subcontractor an initial assessment of any extension to
any date or period specified in the subcontract which the contract manager
considers appropriate based on the information available to him at that time.
Thereafter the contract manager may from time to time review and notify to the
subcontractor the need for and amount of any extension to any date or period

specified in the subcontract sought by the subcontractor having regard to all the
information available to the contract manager at the time of any review.
The contract manager shall undertake a review having regard to all the information
available to him of the need for and amount of any extension sought by the
subcontractor after the later of eight the occurrence of any date or the expiration of
any period specified in the subcontract or as applicable the occurrence of any
extension of any date or the expiration of any extension of any period stated in the
subcontract.
The contract manager shall undertake a final review having regard to all the
information available to him of the need for and amount of any extension sought by
the subcontractor after the subcontractor has completed his obligations in respect of
any date or period specified in the subcontract.
In no circumstances shall a later review reduce the amount of an extension previously

notified to the Subcontractor.
14.2 In deciding the appropriate extension to any date or period specified in the Subcontract
the Contract Manager shall have regard to the following:
(a) an extension shall only be granted when the matter causing the delay, being a
matter which is specified in Sub-clause 14.4 or is an event of Force Majeure,
affects achieving the completion of the Subcontract Plant or the Subcontract
Works or any part of the Subcontract Plant or the Subcontract Works by any
date or by the end of any period stated in the Subcontract;
(b) all the information currently available to the Contract Manager;
(c) the amount of any extension in respect of a particular cause of delay shall be fair
and reasonable; and
(d) in the event of extension for a cause which occurs at a time when the Subcon-
tractor is already in delay for which no extension is allowable, the delay accrued
prior to the allowable extension shall not be excused.
(e) An extension shall not be granted if the subcontractor has not complied with sub-
clauses 5.5 in relation to the causes of the delay and:
(f) The extent to which any delay is a consequence of failure by the subcontractor to
comply with itss obligations under sub-clause 14.7 or any other obligation under
the subcontract
14.3 The notification to the Subcontractor of any extension to any date or period, or any
change in any extension, shall be by means of a Variation Order stating the appropriate
extension to the dates or periods stated in the Subcontract and the Subcontractor shall
revise the Approved Programme and submit it to the Contract Manager for approval in
accordance with Sub-clause 13.4.

14.4 The matters entitling the Subcontractor to an extension under Sub-clause 14.1 are delays
caused by:
(a) the occurrence of conditions or circumstances to which Sub-clause 6.2, 6.3 or 7.3
applies; or
(b) a Variation ordered by the Contract Manager, other than a Variation
ordered by reason of the subcontractors default: or
ordered by reason of the Subcontractor’s default; or
(c) the giving in accordance with Sub-clause 33.10 42.1 of any instruction by the
Contract Manager to suspend any part of the Subcontract Works, except where
due to the Subcontractor’s default; or
(d) a breach of the Subcontract by the Contractor; or
(e) the failure of any Sub-subcontractor nominated in accordance with Clause 10
(Nominated Sub-subcontractors) to perform the Sub-subcontractor’s obligations
despite all due supervision by the Subcontractor; or
(f) the time taken for the Contractor to confirm to the Subcontractor the availability
of funds in accordance with Sub-clause 30.8; or
(g) loss or damage to the Subcontract Plant, Site Materials and Subcontract
Temporary Works if such loss or damage is due to a Contractor’s Risk.
(h) Delay of delivery of the boiler plant by reference to the boiler plant
delivery dates or
(i) Delay to the completion of the non-contestable works by the dno or
(j) Delay to the passing of take over tests as a result of the falirue of the
boiler plant to meet the minimum guaranteed steam or
(k) Loss or damage to the subcontract plant, site materials and

subcontract temporary works if such loss or damage is due to a
contractors risk
14.5 If the Contractor is delayed by an event of Force Majeure in the performance of any of
his obligations under the Subcontract, he shall as soon as possible so notify the
Subcontractor and the Contract Manager.
As soon as possible after that the Contractor shall advise the Subcontractor and the
Contract Manager as to the effect of such event of Force Majeure, and shall advise the
Subcontractor and the Contract Manager of any change in the effect of such event of
Force Majeure including the cessation of the event of Force Majeure.
14.6 ‘Force Majeure’ shall mean any circumstance beyond the reasonable control of the
parties which prevents or impedes the due performance of the Subcontract by either
party including the following:
(a) government action or trade embargo; or
(b) war, hostilities or acts of terrorism; or
(c) riot or civil commotion; or
(d) epidemic; or
(e) earthquake, flood, fire or natural physical disaster; or
(f) exceptionally severe weather conditions or the consequences thereof; or
(g) denial of the use of any railway, port, airport, shipping service or other means of
public transport; or
(h) industrial disputes, other than any solely confined to the Subcontractor or his
Sub-subcontractors or their personnel.
The mere shortage of labour, materials, utilities or a breach of contract shall not constitute
Force Majeure unless caused by circumstances which are themselves Force Majeure.
14.6A Force Majeure shall also mean fire and flood provided that
A) the subcontractor has complied with the requirements (including the fire safety
requirements) of the insurers providing the delay in start up insurance and
B) in the event of claims arising from fire and flood the subcontractor shall be
responsible for a deductible amount of £75,000 for each and every loss caused by
flooding and £100,000 for each and every loss in respect of fire and explosion, for
the deductible period under such delay in start up insurance procure by the
purchaser such that the subcontractor shall not be entitled to an extension of time to

those dates set ou tin schedule 11, table 2 (times of completion) during the
applicable period of the deductible.
14.7 Both parties shall at all times use reasonable endeavours to minimise any delay in the
performance of their obligations under the Subcontract, whatever may be the cause of
such delay.
14.8 In the event that either party is delayed by Force Majeure each party shall bear his own
costs arising from such delay.
14.9 If performance of the Subcontract Works is substantially prevented by Force Majeure for
a continuous period of one hundred and twenty days, either party may by Notice to the
other terminate the employment of the Subcontractor. In the event of such termination
the rights and obligations of the parties shall be the same as if the Contractor had issued
a Notice of Termination under Sub-clause 43.1.
15. Damages for delay

15.1 If the Subcontractor fails to complete the construction of the Subcontract Plant or any
Section or to do any other thing in accordance with Schedule 11 (Times of completion),
the Subcontractor shall pay the Contractor liquidated damages as specified in Schedule
12 (Liquidated damages for delay), but shall have no liability to pay damages in excess of
the maximum (if any) stated in Schedule 12.
15.2 After liquidated damages for delay have become payable in respect of any part of the
Subcontract Plant or Subcontract Works, if the Contract Manager issues a Variation
Order or any event occurs which delays the Subcontractor and in the opinion of the
Contract Manager properly entitles the Subcontractor in accordance with Clause 14
(Delays) to an extension of time in respect of such further delay to that part of the
Subcontract Plant or Subcontract Works, the Contract Manager shall immediately so
notify the Subcontractor and the Contractor.
The Contractor’s further entitlement to liquidated damages in respect of that part of the
Subcontract Plant or Subcontract Works shall thereupon be suspended until the
Contract Manager notifies the Subcontractor and Contractor that such further delay has
come to an end.
Such suspension shall not invalidate any entitlement to liquidated damages which became
payable before the period of further delay started.
15.1 If the subcontractor fails to achieve Take Over in accordance with Schedule 11,
Table 2, as may be adjusted from time to time by the operation of clause 14 the
subcontractor shall pay the contractor liquidated damages (delay liquidated damages) as
specified in schedule 12 (Liquidated damages for delay). In which event the contractor
may recover the same as a debt. Such delay liquidated damages shall be paid for each
day or delay from the take over date in schedule 11, table 2 (as may be adjusted from
time to time by the operation of clause 14) to the actual take over date. The debt shall
become due and payable upon receipt by the subcontractor of the contract managers
written demand and the final date for payment shall be 21 days thereafter
15.2 After delay liquidated damages have become payable in respect of any part of the
subcontract plant or subcontract works, if the contract manager issues a variation order or
any event occurs which delays the subcontractor and in the opinion of the contract
manager properly entitles the subcontractor in accordance with clause 14 (delays) to an
extension of time in respect of such further delay to that part of the subcontract plant or
subcontract works, the contract manager shall immediately so notify the subcontractor and
the contractor.
The contractor’s further entitlement to delay liquidated damages in respect of that part of
the subcontract plant or subcontract works shall thereupon be suspended until the

contract manager notifies the subcontractor and contractor that such further delay has
come to an end.
Such suspension shall not invalidate any entitlement to delay liquidated damages which
become payable before the period of further delay started.
15.3 If the subcontractors performance is such that the calculation of delay

liquidated damages pursuant to this clause 48 gives a figure which is in excess of a sum
equal to 10% of the subcontract price, the contractor may, subject to clause 15.34, at any
time thereafter and forthwith by notice terminate the subcontract under clause 41 in which
event the provisions of clause 44 shall apply
15.4 The contractors right to terminate the subcontract pursuant to sub-clause 15.3
shall not apply if the subcontractor has
A) Paid the liquidated damages in excess of the limit set out in sub-clause 15.3 (the
excess amount) and
B) Agreed in writing to increase the limit on the subcontractors combined liability for all
liquidated damages by an amount equal to or in excess of the excess amount
provided always that this sub-clause 15.4 shall cease to apply if the subcontractor
has agreed to increase the limit on its liability set out in sub-clause 45.2 (D) to an
amount equal to or in excess of 10% of the contract price
15.5 it is expressly agreed that he delay liquidated damages do not constitute a

penalty and the parties hereby agree that such liquidated damages represent a
genuine pre-estimate of losses likely to be suffered by the contractor I the event of a
delay to the completion of the subcontract works or the relevant part thereof and
such delay liquidated damages shall, subject to clause 15.6 and save as regards the
contractors right to terminate the subcontract pursuant to clause 44, be the
contractors sole and exclusive remedy for the delay referred to in sub clause 15 in
respect of the liability of the contractor to pay damages under the main contract to
the purchaser for such delay. However the subcontractor acknowledges and agrees
that in addition the contractor may pursue the subcontractor in respect of such delay
pursuant to clause 3.15.
15.6 In the event that the provisions for delay liquidated damages for delay are held
to be unenforceable as a result of a claim, objection, defence, dispute or proceedings
raised or brought by the subcontractor, the subcontractor expressly agrees to pay the
contractor all costs, losses and damages whatsoever (including loss of profit, loss of
use and loss of production) incurred or payable by the contractor arising from or in
consequence of the failure to achieve take over of the subcontract works or the
relevant part thereof on the planned take over date, provided that the amount of
damages payable in such circumstances do not exceed the aggregate amount that
would have been payable had the delay liquidated damages been enforceable.
15.7 I the subcontractors performance is such that the calculation of Delay

Liquidated damages pursuant to this clause 16 gives a figure which is in excess of a sum
equal to 10% of the subcontract price, the contractor may, subject to sub-clause 15.4 at
any times thereafter and forthwith by notice, terminate the subcontract under clause 41 in
which event the provisions of clause 44 shall apply

16. Variations
16.1 A Variation shall mean any change from that stated in the Subcontract to the
Subcontract Plant, to the Subcontract Works, to the Site, to the method of working, or
to the sequence or the timing of work. The Subcontractor shall make no Variation except
as ordered by the Contract Manager.
16.2 At any time during the performance of the Subcontract the Contract Manager may order
a Variation and, subject to this Clause 16, the Subcontractor shall carry it out as if the
Variation were part of the original Subcontract. The Variation shall be valued in
accordance with Clause 18 (Valuation of Variations).
16.3 The Contract Manager may at any time instruct the Subcontractor to prepare or to assist
him in the preparation of a potential Variation and the Subcontractor shall comply with
such instruction and give to the Contract Manager his recommendations for the form and
scope together with an estimate of the Cost and impact on the Approved Programme of
the Variation at such time and in such detail as the Contract Manager shall require.
16.4 Notwithstanding that consequent additions to or deductions from the Subcontract Price
remain to be decided or agreed, the Contract Manager may issue a Variation Order in
accordance with Sub-clause 16.2 if he considers that delaying the Variation Order
pending such decision or agreement would unnecessarily prejudice the satisfactory
completion of the Subcontract Works or cause avoidable harm to the interests of the
Contractor or the Purchaser. In all other cases the Contract Manager shall give the
Subcontractor reasonable opportunity to comment upon any Variation he proposes to
order and shall request the Subcontractor to state his proposal for consequent
adjustments to the Subcontract Works. The Subcontractor shall give his proposal within
seven days of receipt of such request or within such longer period as the Contract
Manager may agree.
16.5 If the Subcontractor is of the opinion that compliance with any Variation Order would
prevent him from or hinder him in fulfilling any obligation under the Subcontract, he shall
so notify the Contract Manager as soon as reasonably possible and not later than ten
days from receipt of the Variation Order giving reasons why he considers he would be so
prevented or hindered. Any Variation Order in respect of which such a notification is
given by the Subcontractor shall cease to be binding unless and until it is confirmed by
the Contract Manager with or without modifications. The obligations of the
Subcontractor shall be as set out in the Variation Order or any modification to it.
16.6 The Subcontractor may object to any Variation ordered or proposed if compliance with it
would:
(a) cause the Subcontractor to infringe any Legislation, including health, safety or
environmental legislation; or
(b) cause the Subcontractor to infringe any patent, registered design, design right,
copyright or other protected right of any third party; or
(c) require the Subcontractor to act in breach of any legally binding undertaking or
agreement with a third party; or
(d) require the Subcontractor to do work or to exercise skills which are not of the kind
he undertakes in the ordinary course of his business, unless the Variation Order
specifies that the work shall be done or those skills shall be provided by a Sub-
subcontractor in accordance with Clause 10 (Nominated Subsubcontractors); or
(e) involve the employment or use of resources beyond the current capacity of the
Subcontractor where he can demonstrate that such resources are unavailable to
him or cannot reasonably be obtained.
Any such objection by the Subcontractor shall be made to the Contract Manager as
soon as reasonably possible and not later than ten days from receipt of the Variation
Order, giving reasons for his objection. In such case the Contract Manager shall notify
the Subcontractor either that he withdraws the Variation Order or proposal, or that he
does not accept the validity of the Subcontractor’s objection. The decision of the
Subcontractor not to object to any Variation ordered or proposed under this Clause 16
shall not affect his right to object to any subsequent Variation Order or proposal.

16.7 The Subcontractor shall be entitled to an addition to the Subcontract Price deter-
mined in accordance with and subject to Clause 19 (Claims) in respect of the Cost of
preparing a potential Variation in accordance with Sub-clause 16.3, of commenting upon
a proposed Variation in accordance with Sub-clause 16.4 or of responding to a Variation
Order in accordance with Sub-clause 16.5 and 16.6, whether or not any such potential or
proposed Variation is ordered or amended or such Variation Order is confirmed or
withdrawn.
16.7 Subject to sub-clauses 5.5, the subcontractor shall be entitled to an addition to the
subcontract price determined in accordance with and subject to clause 19 (claims) in
respect of the cost of preparing a potential variation in accordance with subclause 16.3 of
commenting upon a proposed variation in accordance with sub-clause 16.4 or of
responding to a variation order in accordance with sub-clause 16.5 and 16.6 whether or
not any such potential or proposed variation is ordered or amended or such variation order
is confirmed or withdrawn. However, where such variation is a consequence of any failure
by the subcontractor to perform its obligations under the subcontract or is in respect of any
matter for which it has responsibility under the subcontract, the subcontractor shall not be
entitled to any such addition to the subcontract price
16.7 The Subcontractor shall establish and maintain contemporary records of the work,
Subcontract Materials and resources required to undertake any Variation and their Cost
together with such additional records as the Contract Manager may reasonably direct
prior to or at the time of issuing the Variation Order, and all such records shall be open to
inspection by the Contract Manager.
16.8 Any disagreement arising under:

(a) Sub-clause 16.5 concerning any modification to the obligations of the Subcon-
tractor; or
(b) Sub-clause 16.6 concerning the validity of the Subcontractor’s objection to a
Variation Order; or
(c) Sub-clause 16.7 concerning any Cost incurred by the Subcontractor;
which is not settled in accordance with Clause 46 (Disputes) may be referred to an Expert
in accordance with Clause 48 (Reference to an Expert).
17. Variations proposed by Subcontractor

17.1 The Subcontractor may at any time during the performance of the Subcontract submit to
the Contract Manager a proposal for a Variation. Initially such proposal should be given
as a brief outline as soon as the Subcontractor is first aware of the possibility of the
Variation.
17.2 If the Contract Manager wishes to give the proposal further consideration he shall agree
with the Subcontractor the extent of the detail that he requires the Subcontractor to
prepare in substantiating the proposal or in developing full details of the proposed
Variation, and thereafter the Subcontractor shall undertake such preparatory work. The
Subcontractor shall be entitled to an addition to the Subcontract
Price determined in accordance with and subject to Clause 19 (Claims) in respect of the
Cost of any preparatory work undertaken in accordance with this Sub-clause 17.2.
Any disagreement arising under this Sub-clause 17.2 concerning the Cost of any such
preparatory work which is not settled in accordance with Clause 46 (Disputes) may be
referred to an Expert in accordance with Clause 48 (Reference to an Expert).
If the contract manager wishes to give the proposal further consideration he shall agree
with the subcontractor the extent of the detail that he requires the subcontractor to
prepare in substantiating the proposal or in developing full details of the proposed
variation, and thereafter the subcontractor shall undertake such preparatory work. Subject
to sub-clauses 5.5 the subcontractor shall be entitled to an addition to the subcontract
price determined in accordance with and subject to clause 19 (claims) in respect of the
cost of any preparatory work undertaken in accordance with this subclause 17.2.
However, where such variation is a consequence of any failure by the subcontractor to
perform its obligations under the subcontract or is in respect of any matter for which it has
responsibility under the subcontract, the subcontractor shall not be entitled to any such

addition to the subcontract price.
Any disagreement arising under this sub-clause 17.2 concerning the cost of any such
preparatory work which is not settled in accordance with clause 46( disputes) may be
referred to an expert in accordance with clause 48 (reference to an expert)
17.3 If the Contract Manager decides that the proposed Variation should be
incorporated into the Subcontract Works or the Approved Programme, he shall so order
and Clause 16 (Variations) shall apply. The Contract Manager may instead order or
propose an alternative Variation under Clause 16. The Contract Manager’s Decision on
any proposal for a Variation or on a detailed proposed Variation under Sub-clauses 17.1
and 17.2 respectively shall be given within fourteen days of receipt of the proposal for a
Variation or of the detailed proposed Variation, or such longer period as the Contract
Manager notifies the Subcontractor within the said fourteen days is reasonably required
for the Contract Manager and the Contractor to consider the proposal for a Variation or
detailed proposed Variation.
Other than in the special circumstances described in Sub-clause 17.4, a Decision of the
Contract Manager not to order a Variation or propose an alternative Variation shall be
final, conclusive and binding.
17.4 The special circumstances referred to in Sub-clause 17.3 are those where the
Subcontractor has stated in his proposal that the object of the Variation is to eliminate a
potential defect in the Subcontract Plant or the Subcontract Works or a hazard to any
person or property in the performance of the Subcontract Works or in the operation or
maintenance of the Subcontract Plant including any breach of a duty imposed by any
health and safety or environmental Legislation.
Any disagreement arising under this Sub-clause 17.4 concerning the Contract
Manager’s Decision not to order a Variation or propose an alternative Variation in such
special circumstances which is not settled in accordance with Clause 46 may be referred
to an Expert in accordance with Clause 48.
If such potential defect or hazard derives from a failure of the Subcontractor or if it should
have been taken into account by the Subcontractor under Clause 6 (Sufficiency of
Subcontract Price), the Subcontractor shall not be entitled to any addition to the
Subcontract Price for the cost of implementing a Variation to the extent that it derives
from the requirement to eliminate the potential defect or hazard.
17.5 If the Subcontractor becomes aware that any item of the Subcontract Plant or any part
of the Subcontract Works to be performed by the Subcontractor has been incorrectly
specified in the Subcontract, the Subcontractor shall immediately notify the Contract
Manager. The Contract Manager and the Subcontractor shall as soon as possible meet
to consider what action and what Variation may be needed.
18. Valuation of Variations

18.1 Subject to Schedule 18 (Valuation of Variations and claims) the amount, if any, to be
added to or deducted from the Subcontract Price in respect of any Variation shall be
such amount as the Contract Manager and the Subcontractor may agree. In the
absence of such agreement, the Contract Manager shall as soon as practicable decide
such amount which shall in all circumstances be reasonable having regard to Schedule
18.
18.2 Where a fixed price quotation for a Variation is provided by the Subcontractor and
accepted by the Contract Manager the price stated in the quotation and accepted shall
be the addition to or deduction from the Subcontract Price to be made in respect of such
Variation.
18.3 Where so agreed the amount to be added to the Subcontract Price in accordance with
this Clause 18 shall be the additional Cost the Subcontractor properly incurs plus Profit.
19. Claims
19.1 If the Subcontractor intends to claim any additional payment which does notarise out of a
Variation, he shall notify the Contract Manager of such intention within ten days of
becoming aware of the event which gives rise to the claim, and shall establish and
maintain records relevant to the claim, together with such additional records as the

Contract Manager may direct. All such records shall be open to inspection by the
Contract Manager.
19.2 The Subcontractor shall as soon as possible thereafter submit his claim to the Contract
Manager supported by a written statement of grounds and a summary of material facts
upon which he relies, together with copies of contemporaneous records and any records
made in accordance with Sub-clause 19.1. The Contract Manager may request any
reasonable additional information that he considers necessary to evaluate the claim and
the Subcontractor shall provide such information as soon as reasonably practicable.
19.3 The amount, if any, to be added to the Subcontract Price in respect of any claim by the
Subcontractor shall be such amount as the Contract Manager and the Subcontractor
may agree. In the absence of such agreement, the Contract Manager shall as soon as
practicable decide such amount which shall be calculated in accordance with the rates
and prices contained in Schedule 18 (Valuation of Variations and claims) so far as these
may be applicable (or otherwise it shall be such amount as shall in all the circumstances
be reasonable having regard to Schedule 18) and having regard to any prejudice caused
to the Contractor by any late notice under Sub-clause 19.1. Any such agreement or
decision shall be recorded by means of a Variation Order.
19.4 Where it is stated in the Subcontract that an addition to the Subcontract Price is to be
determined in accordance with this Clause 19, the Subcontractor shall be entitled to the
additional Cost he properly incurs plus Profit. The Subcontractor shall not be entitled to
any Cost incurred as a result of any failure on the part of the Subcontractor to comply
with any of the provisions of the Subcontract including those of this Clause 19.
19.5 Any claim by the Contractor made in accordance with Sub-clause 4.3 shall be submitted
to the Subcontractor as soon as possible after the work to which the costs relate has
been completed and be supported by a written statement of grounds and a summary of
material facts upon which the Contractor relies together with copies of records made in
accordance with Sub-clause 4.3. The Contractor and the Subcontractor may agree the
costs in respect of any claim by the Contractor. In the absence of such agreement, the
Contract Manager shall decide the amount as soon as practicable.
20. Confidentiality
20.1 ‘Confidential Information’ shall mean all Documentation and other technical or
commercial information in any form obtained directly or indirectly from the Purchaser or
the Contractor by the Subcontractor, or directly or indirectly from the Subcontractor by
the Purchaser or the Contractor, or which is generated by the Subcontractor or any
Sub-subcontractor in connection with the Subcontract, whether before or after the date
of the Subcontract other than information:
(a) which is or becomes publicly available other than by any unauthorised action of
either of the parties to this Subcontract; or
(b) which is or comes into the possession of one party other than in breach of a duty
of confidence to the other party; or
(c) which is expressly approved for disclosure by the party to whom the information
relates..
20.2 The Subcontractor shall not, without the previous consent of the Contractor, use, publish
or disclose to any person, nor cause nor permit any of his Affiliates, personnel or Sub-
subcontractors to use, publish or disclose any Confidential Information obtained from
the Purchaser or the Contractor other than for the performance of his duties under the
Subcontract.
The Subcontractor shall not, without the previous consent of the Contractor, use, publish
or disclose to any person, nor cause nor permit any of his Affiliates, personnel or Sub-
subcontractors to use, publish or disclose any Confidential Information obtained from the
Purchaser or the Contractor other than for the performance of his duties under the
Subcontract. If requested by the Contractor, the Subcontractor shall enter into a non-
disclosure agreement directly with the Boiler Supplier with respect to any information
originating from the Boiler Supplier, on the same terms as has the Contractor itself within
seven days of the Contractor’s request. Nothing in the Subcontract shall moderate the
scope or duration of the non-disclosure agreement entered into between the
Subcontractor and the Boiler Supplier. If the Subcontractor defaults in the delivery of any

non-disclosure agreement requested by the Contractor no monies shall fall due to the
Subcontractor under this Subcontract until the Subcontractor has remedied its default
20.3 Except as permitted in Clause 8 (Patent and other protected rights) the Contractor shall
not and shall ensure that the Purchaser shall not, without the previous consent of the
Subcontractor, use, publish or disclose to any person, nor cause nor permit any of their
Affiliates, or personnel to use, publish or disclose to any person any Confidential
Information obtained from the Subcontractor or any Sub-subcontractor otherwise than
for the design, construction, operation, repair, maintenance, modification, re-use or
removal of the Subcontract Plant and associated facilities.
20.3 Except as permitted in Clause 8 (Patent and other protected rights) the
Contractor shall not and shall ensure that the Purchaser shall not, without the previous
consent of the Subcontractor, use, publish or disclose to any person, nor cause nor permit
any of their Affiliates, or personnel to use, publish or disclose to any person any
Confidential Information obtained from the Subcontractor or any Sub-subcontractor
otherwise than for the design, construction, operation, repair, maintenance, modification,
sale, or financing of the Subcontract Plant and/or the Facility and associated facilities or in
the conduct of legal proceedings in connection therewith provided that nothing in this Sub-
clause shall prevent the Contractor from disclosing Confidential Information to its
professional advisers and to the funders (and their professional advisers) if the recipient is
bound by a confidentiality undertaking to an extent no less stringent than the obligations
imposed on the Contractor under this Subcontract
20.4 The Subcontractor shall not, other than for the purposes of performing the Subcontract
Works, take or permit to be taken any photograph or other image of the whole or any part
of the Subcontract Plant or any other property of the Contractor or of the Purchaser or
his Affiliates, or any physical or virtual model of the Subcontract Plant, without the prior
consent of the Contractor. Any such photograph or other image shall be regarded as
Confidential Information within the terms of Subclause 20.1. No photograph or other
image so taken shall be used for the purposes of publicity without the prior consent of the
Contractor.
20.5 This Clause 20 shall survive and remain in full force for a period of ten years following the
issue of the last Final Certificate under Clause 38 (Final Certificate) or final Default
Certificate under Clause 44 (Termination for Subcontractor’s default), unless otherwise
stated in any Special Conditions.
21. Documentation
21.1 The Subcontractor shall appoint competent persons who shall be responsible for the
checking and approval of all Documentation provided by the Subcontractor. No
Documentation shall be both checked and approved by the same individual. If such
persons are not named in the Subcontract, the Subcontractor shall make such
appointments and shall notify the Contract Manager accordingly.
21.2 The Subcontractor shall submit to the Contract Manager for his approval the Docu-
mentation listed in Schedule 2 (Documentation) under the heading ‘Documentation for
approval’ at the time or times stated in Schedule 11 (Times of completion) or in the
Approved Programme.
Within twenty-one days of the receipt by him of any Documentation for his approval, the
Contract Manager shall return one copy thereof to the Subcontractor with his approval,
conditional approval or rejection endorsed on it. If the Contract Manager fails to take any
such action within the said twenty-one days, the Documentation shall be deemed to have
been approved by the Contract Manager and the Subcontractor shall notify the
Contract Manager accordingly.
21.3 The Contract Manager’s approval of any Documentation submitted to him shall not
relieve the Subcontractor of any of his responsibilities under the Subcontract. The
Subcontractor shall not depart from any approved Documentation unless he has first
submitted amended Documentation to the Contract Manager and obtained his approval
thereof.
21.3 The Contractor’s, the Contract Manager's, the Project Manager’s and/or the
Purchaser’s approval of any Documentation submitted to him shall not relieve the

Subcontractor of any of his responsibilities under the Subcontract. The Subcontractor
shall not depart from any approved Documentation unless he has first submitted
amended Documentation to the Contract Manager and obtained his approval thereof
21.4 The Contract Manager shall not reject any Documentation except on the grounds that
the Documentation is not in accordance with some express provision of the
Subcontract, or that it is not in accordance with good engineering practice or is likely to
have an adverse effect on health or safety or on the environment.
In each case where the Contract Manager rejects any Documentation, he shall give his
reasons and the Subcontractor shall amend and re-submit such amended Docu-
mentation to the Contract Manager.
Any disagreement arising under this Sub-clause 21.4 which is not settled in accordance
with Clause 46 (Disputes) may be referred to an Expert in accordance with Clause 48
21.5 If the Contract Manager gives conditional approval to any Documentation subject to any
comment or query, he may have, he shall make such comment or query on or attached to
such Documentation. The Subcontractor may with the Contract Manager’s consent
proceed on the basis of the conditional approval.
The Subcontractor shall in any event re-submit the Documentation with his response to
the comment or query and the Contract Manager shall in accordance with Sub-clause
21.2 approve such Documentation without conditions when it is re-submitted in
accordance with the conditional approval.
21.6 The Contract Manager shall have the right at any time on reasonable notice to examine
any Documentation which has been or is being prepared by the Subcontractor or his
Sub-subcontractors for the purposes of the Subcontract except any Documentation of
a class or description which Schedule 2 or any Special Condition states shall not be
shown to the Contractor or the Contract Manager.
21.6 The Contract Manager and the Project Manager shall have the right at any time
on reasonable notice to examine any Documentation which has been or is being
prepared by the Subcontractor or his Sub-subcontractors for the purposes of the
Subcontract except any Documentation of a class or description which Schedule 2 states
shall not be shown to the Contractor, the Project Manager or the Contract Manager
21.7 In addition to the Documentation to be submitted under Sub-clause 21.2, Schedule 2

may include a description of other Documentation which is to be provided to the
Contract Manager, under a heading ‘Documentation for information only'. The
Subcontractor shall submit such Documentation to the Contract Manager as soon as
each becomes available in the form specified in Schedule 2.
21.8 Documentation relating to any item subject to statutory design requirements and/or
insurance approval shall be made available to the Contractor and/or his or the
Purchaser’s insurers or their agents at times appropriate for such purposes, taking
account of the Approved Programme.
21.9 At a time or within a period (if any) specified in Schedule 11 and before the Subcontract
Plant is Taken Over in accordance with Clause 33 (Taking Over), the Subcontractor
shall supply the Documentation specified in Schedule 2 under the heading ‘Final
Documentation and Manuals’ forthe Subcontract Plant as actually constructed.
21.10 The Contract Manager shall review the Documentation supplied by the Subcontractor
in accordance with Sub-clauses 21.8 and 21.9 for completeness and accuracy, and may
require it to be amended by the Subcontractor as necessary.
21.11 Whenever the Subcontractor makes any change to the Subcontract Plant as
described in the Documentation provided in accordance with Sub-clause 21.9, he shall,
within a period of fifty days, provide the Contractor with new Documentation revised to
take account of such change.
21.12 The Subcontractor shall promptly correct any error, discrepancy or omission in any
Documentation prepared by him or on his behalf. If the need for correction has arisen by
reason of any incomplete or inaccurate data, Documentation or information provided by
the Contractor or the Contract Manager on which the Subcontractor reasonably relied,
the Subcontractor shall be entitled to an addition to the Subcontract Price determined in
accordance with and subject to Clause 19 (Claims). Otherwise the work of the

Subcontractor in so doing shall be at his own cost.
21.13 The Subcontractor shall if required by the Contract Manager correct any error,
discrepancy or omission in any Documentation provided to him by the Contractor or the
Contract Manager for the purposes of the Subcontract Works and overcome the
consequences of such error, discrepancy or omission and shall be entitled to an addition
to the Subcontract Price determined in accordance with and subject to Clause 19.
However, if the need for correction has arisen by reason of any inaccurate data,
Documentation or information provided by the Subcontractor and on which the
Contractor or the Contract Manager reasonably relied, the Subcontractor shall himself
bear his additional cost.
21.14The Subcontractor shall reimburse to the Contractor any cost of abortive activity which the Contractor has incurred in
reliance on any Documentation which, in accordance with Sub-clauses 21.12 and 21.13, the Subcontractor is to correct at his own
cost..
21.14 Provided that the Contractor complies with Sub-clause 4.3 and submits a claim in
accordance with Sub-clause 19.5, the Subcontractor shall reimburse to the Contractor
any cost of abortive activity which the Contractor has incurred in reliance on any
Documentation which, in accordance with Sub-clauses 21.12 and 21.13, the
Subcontractor is to correct at his own cost. The liability of the Subcontractor to make
such reimbursements shall not exceed in aggregate one per cent of the Subcontract
Price.
21a - The Subcontractor shall provide such reasonable assistance (including

attendance at meetings) as is requested by the Contractor to assist in developing
the Commissioning Requirements. The Subcontractor shall carry out the
commissioning of the Subcontract Plant in accordance with the Commissioning
Requirements.
22. Inspection and pre-installation tests

22.1 The Contract Manager and the Project Manager shall be entitled at all times to have
access to any place where work under the Subcontract is being carried out or
Subcontract Materials are being manufactured or fabricated, for the purpose of checking
the progress of manufacture or fabrication, inspecting and observing the work or carrying
out tests on the work or Subcontract Materials. The Contract Manager shall give
reasonable notice of the access and facilities he and the Project Manager require and
the Subcontractor shall secure such access and facilities both at those premises under
his own control and those under the control of his Sub-subcontractors.
22.1 The Purchaser (and any authorised nominee), Project Manager, Contractor
and/or Contract Manager shall be entitled at all times to have access to any place where
work under the Subcontract is being carried out or Subcontract Materials are being
manufactured or fabricated, for the purpose of checking the progress of manufacture or
fabrication, inspecting and observing the work or carrying out tests on the work or
Subcontract Materials. The Contract Manager shall give reasonable notice of the access
and facilities he, the Purchaser (and any authorised nominee), Project Manager and/or
Contractor require and the Subcontractor shall secure such access and facilities both at
those premises under his own control and those under the control of his Sub-
subcontractors.
22.2 The Subcontractor shall arrange and be responsible for all factory and other off-site tests
and those, if any, carried out at the Site prior to installation, including those listed in
Schedule 13 (Pre-installation tests and procedures), and shall provide the Contract
Manager with copies of the test results in accordance with the quality assurance system
described in Schedule 6 (Quality assurance and validation).
22.2 The Subcontractor shall arrange and be responsible for all factory and other
off-site tests and those, if any, carried out at the Site prior to installation, including those
listed in Schedule 13 (Pre-installation tests and procedures), and shall provide the
Contract Manager with copies of the test results in accordance with the quality assurance
system described in Schedule 6 (Quality assurance and validation) and any other
information reasonably requested by the Contractor for the purpose of bona fide disputes

or insurance claims
22.3 Whenever the Subcontractor is ready to conduct a pre-installation test he shall notify the
Contract Manager of the place and time at which he intends to conduct it, the time being
not less than fourteen days later than the date of such notification. The Subcontractor
shall conduct the test at the time and place so notified.
If the Contract Manager and/or the Project Manager do not attend the test, the
Subcontractor shall nevertheless be entitled to carry it out in their absence, and copies of
the test results shall be deemed to be a correct record of the test provided that the test is
carried out and the results are recorded in accordance with the quality assurance system
specified in Schedule 6.
22.4 The Contract Manager may require any additional pre-installation test not described in
Schedule 13 to be conducted for the purpose of deciding whether any work or
Subcontract Materials are in accordance with the Subcontract. The Contract Manager
shall notify the Subcontractor of any such requirement by means of a Variation Order in
sufficient time to enable the Subcontractor to conduct such test without impeding the
performance of his other obligations under the Subcontract. Sub-clauses 22.2 and 22.3
shall apply to any such test. Unless the additional test is one that is normally conducted
as part of the practice of the place where work is being done or Subcontract Materials
are being manufactured or fabricated, the Subcontractor shall be entitled to an addition
to the Subcontract Price determined in accordance with and subject to Clause 19
(Claims).
22.5 The Subcontractor shall provide or shall arrange for the provision of all labour, materials
and equipment necessary for the proper carrying out of all pre-installation tests under this
Clause 22.
22.6 If any item of work or Subcontract Materials fails to pass any pre-installation test, the
Subcontractor shall either rectify or replace the relevant item and, unless the Contract
Manager dispenses with a repetition of the test, shall repeat the test following a further
notification given under Sub-clause 22.3. The period of such notification may however be
less than fourteen days if a lesser period is reasonable in the circumstances.
22.7 The Subcontractor shall be responsible for the cost of any repeat inspection or test in the
event of an inspection or test failure.
22.8 The rights of the Contract Manager under this Clause 22 may be exercised by any
authorised nominee of the Contract Manager. The rights of the Project Manager under
Sub-clause 22.1 may be exercised by any authorised nominee of the Project Manager.

23. The Site
23.1 The Contractor shall give the Subcontractor access to and possession of the Site or
parts of the Site:
(a) by or before the relevant date or dates specified in the Subcontract; or
(b) if no such date or dates are specified, then in accordance with the Approved
Programme; or
(c) if there is no Approved Programme, or if no such date or dates are specified
then in reasonable time to permit the Subcontractor to perform his obligations
Such access and possession shall continue until the issue of the Take Over Certificate.
Following issue of the Take Over Certificate and in accordance with the Subcontract the
Contractor shall allow such access as is necessary for the Subcontractor to correct
Defects and to perform his other rights and obligations under the Subcontract.
23.2 Unless the Subcontract otherwise provides, the Contractor shall arrange that the Site
includes a suitable right of access for the Subcontractor from a convenient point on the
public highway.
The Subcontractor shall be deemed to have satisfied himself as to the suitability and
availability of routes to the Site and of the power, water and other utilities which he
chooses to use. The Subcontractor shall obtain any permission that may be required
from the relevant authorities for the use of such route or utility. Except for information
provided in accordance with Sub-clause 4.1, the Contractor does not guarantee and
makes no representation as to the suitability or availability of any route or utility but shall
provide such assistance as the Subcontractor may reasonably require in obtaining any
necessary permission for the use of any route or utility.
The Subcontractor shall be deemed to have satisfied himself as to the suitability and
availability of routes to the Site and of the power, water and other utilities which he
chooses to use. The Subcontractor shall obtain any permission that may be required from
the relevant authorities for the use of such route or utility. Except for information provided
in accordance with Sub-clause 4.1, the Contractor does not guarantee and makes no
representation as to the suitability or availability of any route or utility but shall provide
such assistance as the Subcontractor may reasonably require in obtaining any necessary
permission for the use of any route or utility. If the Subcontract Works involve the use by
the Subcontractor of waterborne transport, this Sub-clause 23.2 shall be construed as
though 'road' or 'route' includes a river, canal, lock, dock, sea wall or other structure
related to a waterway, berth or port and 'traffic' includes any kind of waterborne craft, and
shall have effect accordingly.
23.3 The Subcontractor shall use every reasonable means to prevent any of the roads
(including temporary roads), railways (if any), and all associated bridges and other
structures connecting with or on routes to the Site from being damaged by any traffic
(including in particular, any traffic deemed to be ‘extraordinary traffic’ within the meaning
of Legislation) generated by the Subcontractor or any Sub-subcontractor. In order to
avoid unnecessary damage to any such roads, railways, bridges or other structures, the
Subcontractor shall select appropriate routes and vehicles or restrict and distribute loads
such that the movement to or from the Site of Subcontractor’s Equipment, Subcontract
Materials (and, if in the Subcontractor’s possession, any Free-lssue Materials) or plant
is limited as far as reasonably possible.
The Subcontractor shall use every reasonable means to prevent any of the roads
(including temporary roads), railways (if any), and all associated bridges and other
structures connecting with or on routes to the Site from being damaged by any traffic
(including in particular, any traffic deemed to be 'extraordinary traffic' within the meaning
of Legislation) generated by the Subcontractor or any Sub-subcontractor. In order to
avoid unnecessary damage to any such roads, railways, bridges or other structures, the
Subcontractor shall select appropriate routes and vehicles or restrict and distribute loads
such that the movement to or from the Site of Subcontractor's Equipment, Subcontract
Materials or plant is limited as far as reasonably possible.
The Subcontractor shall indemnify the Contractor against all claims for damage to any
such roads, railways, bridges or other structures caused by such traffic, including, but not
limited to, claims made by any competent authority directly against the Contractor and/or
the Purchaser pursuant to any applicable Legislation
If the Subcontract Works involve the use by the Subcontractor of waterborne transport,
this Sub-clause 23.3 shall be construed as though ‘road’ or ‘route’ includes a river, canal,

lock, dock, sea wall or other structure related to a waterway, berth or port and ‘traffic’
includes any kind of waterborne craft, and shall have effect accordingly.
23.4 The Subcontractor shall ensure that every aspect of and all operations connected with
the Subcontract Works are carried out so as not to damage or to interfere unnecessarily
with any of the operations being carried out by others on or about the Site or with the
convenience of the public or the access to or to the occupation and use of any public or
private property.
23.4 The Subcontractor shall ensure that every aspect of and all operations
connected with the Subcontract Works are carried out so as not to damage or to interfere
unnecessarily with any of the operations being carried out by others on or about the Site
or with the convenience of the public or the access to or to the occupation and use of any
public or private property, including, for the avoidance of doubt, the activities of
Associated British Ports and their tenants at the Barry Port
23.5 The Subcontractor shall permit the Purchaser, the Project Manager, the Contractor
and the Contract Manager and their personnel to enter the Site at all reasonable hours
for the purpose of inspecting the Subcontract Works, receiving training or carrying out
their work whether or not under or in connection with the Subcontract or the Main
Contract. The Subcontractor shall also permit other contractors or suppliers engaged by
the Contractor or the Purchaser whether or not under or in connection with the Main
Contract to enter the Site and carry out work or deliver goods at all reasonable hours, but
unless the Subcontract expressly provides otherwise, the Subcontractor shall not be
required to allow them to have such access or facilities as would significantly interfere
with the performance of his obligations under the Subcontract.

23.5 The Subcontractor shall permit the Purchaser, the Project Manager, the
Contractor and the Contract Manager and their personnel to enter the Site at all
reasonable hours for the purpose of inspecting the Subcontract Works, receiving training
or carrying out their work whether or not under or in connection with the Subcontract or
the Main Contract. The Subcontractor shall also permit other contractors or suppliers
engaged by the Contractor or the Purchaser whether or not under or in connection with
the Main Contract to enter the Site and carry out work or deliver goods at all reasonable
hours, but unless the Subcontract expressly provides otherwise, the Subcontractor shall
not be required to allow them to have such access or facilities as would significantly
interfere with the performance of his obligations under the Subcontract. For the avoidance
of doubt the Subcontractor shall allow the Purchaser, the Project Manager, Contractor,
the Contract Manager, the Boiler Supplier, the Operator, the Feedstock Supplier, and
Northern PowerGrid access to the Site at all times when the Contractor’s personnel are
working on Site and at such other times as the Subcontractor, acting reasonably, may
agree
23.6 The Subcontractor shall not permit to enter the Site any person whose presence on the
Site is not necessary for the carrying out of the Subcontract Works or for the carrying out
of other work on behalf of the Contractor or the Purchaser without the prior consent of
the Contract Manager.
23.7 The Subcontractor shall take full account of and comply with the Contractor’s and the
Purchaser’s site and security rules for contractors and ensure that his Sub-
subcontractors do likewise.
24. Delivery to Site

24.1 The Subcontractor shall be responsible for the delivery to the Site of all Subcontract
Materials and Subcontractor’s Equipment in accordance with the requirements of the
Subcontract. The delivery arrangements for Free-lssue Materials shall be as stated in
Schedule 3 (Responsibilities of Contractor).
24.2 Unless otherwise agreed with the Contract Manager, the Subcontractor shall not deliver
or cause to be delivered anything to the Site until adequate facilities have been provided
at the Site for its proper unloading and storage.
24.3 If the Subcontractor wishes any Subcontract Materials or Subcontractor’s Equipment

to be delivered to the Site before the time, if any, specified in the Approved Programme,
he shall obtain the consent of the Contract Manager
before such delivery is made.
24.4 If any Subcontract Materials or Subcontractor’s Equipment are to be delivered to the

Site seven days or more after the time, if any, specified in the Approved Programme, the
Subcontractor shall draw this to the attention of the Contract
Manager immediately upon his becoming aware of the delay.
24.5 The Subcontractor shall bear the risk and be liable for any loss of or damage to
Subcontract Materials until they are delivered to the Site irrespective of any fault or
negligence of the Contractor or the Contract Manager.
24.6 If the Subcontractor first takes possession of any Free-lssue Materials at a location
other than the Site, then the Subcontractor shall bear the risk and be liable for any loss
of or damage to any such Free-lssue Materials from the time when the Subcontractor
first takes possession of them until delivery to the Site irrespective of any fault or
negligence of the Contractor or the Contract Manager.
24.6 If the Contractor free-issues to the Subcontractor any materials for

incorporation into the Facility and the Subcontractor first takes possession of them at a
location other than the Site, then the Subcontractor shall bear the risk and be liable for
any loss of or damage to any such materials from the time when the Subcontractor first
takes possession of them until delivery to the Site irrespective of any fault or negligence
of the Contractor, the Purchaser, the Project Manager or the Contract Manager

25. Ownership of Subcontract Materials
25.1 The ownership of Subcontract Materials shall pass to the Contractor or the Purchaser
at whichever is the earlier of the following:
(a) upon delivery to the Site; or
(b) when the Subcontractor becomes entitled to the final payment in respect of such
Subcontract Materials and such payment has been made.
The Subcontractor shall insert such provisions in subcontracts as will cause this to
happen.
25.2 Whenever the ownership of any Subcontract Materials passes to the Contractor or the
Purchaser prior to delivery to the Site, the Subcontractor shall arrange for the
Subcontract Materials to be marked as the Contractor’s or Purchaser’s property as the
case may be and shall ensure that they are stored and handled separately from other
materials.
25.3 When so requested, the Subcontractor shall provide to the Contract Manager proof of
ownership and its transfer to the Contractor or the Purchaser.

26. Health, safety, environment and pollution
26.1 The Contractor and the Subcontractor shall comply with all health, safety and envir-
onmental Legislation.
Without prejudice to the generality of the foregoing obligation, the Subcontract Works
shall be carried out in compliance with the Health and Safety at Work Act 1974 (as
amended by Schedule 2 to the Consumer Protection Act 1987) and all applicable
Regulations made thereunder, including the Construction (Design and Management)
Regulations 2007 or any statutory re-enactment or amendment thereof for the time being
in force.
26.2 The Subcontractor shall be responsible for the safety of his own operations and those of
any Sub-subcontractor and shall ensure that:
(a) a safe working environment is maintained at all times;
(b) all persons on the Site, whether or not employed by the Subcontractor or any
Sub-subcontractor, are properly protected from risk of injury and danger to
health arising out of or in connection with the carrying out of the Subcontract
Works;
(c) all property under his control is properly protected from damage or loss;
(d) it does not cause damage or loss to any equipment supplied under the Boiler Supply Contract and feedstock supplied by the
Purchaser to enable testing and commissioning to take place and the resulting ash;
(e)
(f) all construction activities are subject to appropriate risk assessment and that
relevant construction method statements are issued;
(g) any hazardous material is identified and suitable safety notices issued; and
(h) any hazardous material for which he is responsible is safely contained or
removed from the Site.
26.3 The Subcontractor shall be responsible for the provision of all necessary safety
equipment, materials, first aid and emergency arrangements throughout the duration of
the construction activities as further described in Schedule 4 (Health & Safety) except as
may be provided by the Contractor as further described in Schedule 3 (Responsibilities
of Contractor).
26.4 The Subcontractor shall ensure that his personnel, Sub-subcontractors, and
anybody working under their control shall be familiar with, and shall at all times comply
strictly with, the requirements stated in Schedules 4 and 5 (Environmental protection &
waste disposal) and any site safety regulations, safe working procedures and health and
safety instructions issued to the Subcontractor from time to time by the Contract
Manager or the Contractor and shall further ensure that where necessary his or his Sub-
subcontractor’s personnel have undergone suitable safety training and certification.
26.5 Without prejudice to the Subcontractor’s general responsibility for safety as stated in
Sub-clauses 26.1 and 26.2, the Subcontractor shall:
(a) take due notice of all instructions or advice given by the Contractor’s or the
Purchaser’s designated Health and Safety Supervisor; and
(b) nominate a competent person to be responsible for the proper observance of all
safety requirements and procedures during work on the Site.
26.6 The Subcontractor shall ensure that none of his or any Sub-subcontractor’s
personnel performs any activity relating to the performance of the Subcontract Works
under the influence of intoxicating liquor, drugs or other similar substances.
26.7 The Subcontractor shall indemnify the Contractor against any clean-up cost that results
from any escape or release of hazardous or polluting material:
(a) from any Subcontractor’s Equipment or Subcontract Temporary Works;
or
(b) which occurred prior to the issue of the relevant Take Over Certificate and was
caused by a failure of the Subcontractor to exercise the reasonable skill and care
to be expected of a properly qualified and competent subcontractor; or
(c) which occurred after the issue of the relevant Take Over Certificate and before
the issue of the relevant Final Certificate and was sudden or accidental and was
caused by a failure of the Subcontractor to exercise the reasonable skill and care
to be expected of a properly qualified and competent subcontractor.

The Contractor shall indemnify the Subcontractor against any clean-up cost that results
from any escape or release of hazardous or polluting material other than as described at
(a), (b) or (c) above.
Each indemnity shall relate only to clean-up costs that are reasonably incurred in order to
comply with Legislation, the Lease, or as a result of the reasonable requirements of a
regulatory body
Liability for any loss or damage which may result from the escape or release of hazardous
or polluting material other than clean-up costs shall be in accordance with Clause 30
(Care of the Subcontract Works).
27. Site services

27.1 The Subcontractor shall provide all Subcontract Materials, Subcontractor’s
Equipment, Subcontract Temporary Works, labour, consumables, services and
facilities that may be necessary at the Site for the proper carrying out and completion of
the Subcontract Works other than those, if any, which the Subcontract requires the
Contractor to provide.
27.2 The facilities and services to be provided by the Subcontractor shall include but not be
limited to: temporary roads and parking; temporary offices, stores and warehousing;
communications; sanitary and canteen facilities for persons engaged in the Subcontract
Works; cleaning and other services; and all necessary or specified safety, security, fire-
fighting, first aid and other medical facilities.
27.2 The facilities and services to be provided by the Subcontractor shall include all
those required for the successful completion of the subcontract works with the exclusion
of those facilities and services provided by the Contractor as stated in Schedule 3
27.3 All temporary buildings, structures, equipment and facilities provided by the Subcon-
tractor at the Site shall be properly maintained and cleaned by the Subcontractor, and at
all times during the carrying out of the Subcontract Works the Site shall be kept by the
Subcontractor in a safe, clean and orderly condition and reasonably free from waste
materials and rubbish.
27.4 If the Subcontract states in Schedule 3 (Responsibilities of Contractor) or elsewhere that

the Contractor shall provide any services or facilities for use by the Subcontractor, then
unless otherwise stated, use by the Subcontractor shall be free of charge. Such use by
the Subcontractor shall be subject to any condition that the Contract Manager may
reasonably require.
27.5 Any Documentation relating to Subcontractor’s Equipment, Subcontract

Temporary Works and facilities which the Subcontractor by law or the
Subcontract
is required to have, make or obtain shall, if required, be produced for inspection by the
Contract Manager, Contractor, Project Manager or Purchaser and/or his insurers or
their agents.
27.6 The Subcontractor shall not remove Subcontractor’s Equipment from the Site or
dismantle or remove Subcontract Temporary Works without the prior consent of the
Contract Manager, but the Contract Manager shall not refuse consent if the
Subcontractor’s Equipment or Subcontract Temporary Works are no longer required
for the carrying out of the Subcontract Works.
28. Site working conditions

28.1 Subject to Sub-clause 28.3, the Subcontractor shall pay rates of wages and allowances
and observe hours and conditions of employment which are not less favourable than
those established for the relevant trade or industry by any general agreement or award
applying to the place where any work for the Subcontract is being carried out and shall
impose the same obligations on his Sub-subcontractors.

28.2 The Subcontractor shall at all times keep the Contract Manager informed of any matter
likely to affect industrial relations at the Site.
28.3 The Subcontractor shall comply with any general agreement made between repre-
sentatives of workmen and employers who will be engaged in work at the Site as to the
rates of wages and allowances to be paid to and general working conditions for workmen
employed at the Purchaser’s premises where the Site is situated, provided that such
agreement was either already in force at the date of the Subcontractor’s tender as stated
in the Subcontract Agreement or is one to which the Subcontractor is already or
becomes a party.
28.4 The Subcontractor shall ensure the immediate removal from the Site of any person,
other than the Subcontractor’s Site Manager or a member of his Site staff to whom Sub-
clause 12.5 applies, whom the Contract Manager shall by notice require to be removed
for reason of misconduct, incompetence or material breach of any of the rules,
requirements, regulations, procedures and instructions referred to in Sub-clauses 23.7
and 26.4. Provided it is given in good faith and does not amount to unlawful
discrimination, any Decision given by the Contract Manager under this Sub-clause 28.4
shall be final, conclusive and binding. The Contract Manager shall not delegate the
power to give a notice under this Subclause 28.4. The Contractor shall have no obligation
to pay the Subcontractor for replacing the person.
28.5 Unless otherwise stated in the Subcontract, the Subcontractor shall not, except in an
emergency, carry out any work on the Site at times outside the normal working hours, if
any, specified in Schedule 1 (Description of the Subcontract Works) without the prior
agreement of the Contract Manager.
29. Meetings
29.1 Meetings to review progress and discuss matters relating to the Subcontract Works shall
be held on a regular basis on dates to be fixed by the Contract Manager. The
Subcontractor also may request that a meeting be held at another time if the circum-
stances require it, and the Contract Manager shall not unreasonably reject such a
request. Meetings shall be attended by the Contract Manager or the Contract
Manager’s Representative and by the Subcontract Manager or Subcontractor’s Site
Manager and may be attended by other persons, including the Project Manager and/or
representatives of Sub-subcontractors, as appropriate.
29.2 The Contract Manager shall provide a person to record the proceedings of each
meeting. Within seven days of the meeting the Contract Manager shall give two copies
of the records signed by him to the Subcontract Manager. If the Subcontract Manager
accepts the records as sufficient and accurate, he shall sign one copy and return it to the
Contract Manager within a further seven days. If not, the Subcontract Manager shall
agree any modification with the Contract Manager and the amended copies shall be
signed by both of them. If agreement cannot be reached upon any modification to the
record of the meeting, the disagreements remaining shall be noted and attached to all
copies of the record.
29.3 Only records signed by both the Subcontract Manager and the Contract Manager
shall constitute approved records for the purposes of Sub-clause 5.3.
30. Care of the Subcontract Works

30.1 If the Subcontract provides for the Subcontract Plant to be Taken Over by Sections,
the references to the Subcontract Plant in this Clause 30 shall apply as if a reference to
the Subcontract Plant were a reference to a Section.
30.2 In this Clause 30, ‘Personnel’ of a legal entity means any person engaged by and working
under the direction and control of that legal entity.
30.3 The Subcontract Plant and Subcontract Temporary Works shall be under the
care and control of the Subcontractor until the Subcontract Plant is Taken Over
by the

Contractor. Access to the Site and all activities on it under the Subcontract shall, subject
to Sub-clause 23.5, be under the control of the Subcontractor until the whole of the
Subcontract Plant is Taken Over by the Contractor.
30.4 Subject to Sub-clause 30.8, the Subcontractor shall make good any loss or damage to
the Subcontract Plant, Site Materials and Subcontract Temporary Works that may
occur:
(a) before the Subcontract Plant is Taken Over by the Contractor; and
(b) after the Subcontract Plant has been Taken Over by the Contractor but
before the issue of the applicable Final Certificate, when the loss or damage
results from any cause or operation described in Sub-clause 31.1 (a) or (b).
30.5 The Subcontractor shall have no liability for loss or damage to the Subcontract
Plant, Site Materials and Subcontract Temporary Works if such loss or damage
is due to a Contractor’s Risk.
30.6 Subject to Sub-clause 30.5, the Subcontractor’s liability for the loss of or damage to the
Subcontract Plant, Site Materials and Subcontract Temporary Works, including his
obligations under Sub-clause 30.4, shall be limited to:
(a) the lesser of:
(i) the Deductible; or
(ii) the actual value of each claim to which the Deductible shall apply;
plus
(b) any cost that the Subcontractor would have incurred under Clause 37 (Liability
for Defects) if replacement or rectification of any Defect in the Subcontract Plant
and/or Subcontract Temporary Works had been put in hand immediately prior to
the physical loss of or damage to the Subcontract Plant and/or Subcontract
Temporary Works.
30.7 The Contractor shall indemnify the Subcontractor in respect of any Cost of making good
loss of or damage to the Subcontract Plant, Site Materials and/or Subcontract
Temporary Works in accordance with Sub-clause 30.4 that is in excess of the
Subcontractor’s liability under Sub-clause 30.6 irrespective of any fault or negligence of
the Subcontractor or any Sub-subcontractor.
30.8 To the extent that the Cost of making good loss of or damage to the Subcontract Plant,
Site Materials and/or Subcontract Temporary Works in accordance with Sub-clause
30.4 exceeds the Subcontractor’s liability under Sub-clause 30.6 the performance of
such obligation shall be conditional upon:
(a) the Contractor confirming that sufficient funds are available to the Subcontractor
from the Contractor to implement and complete such work; and
(b) the terms of payment of such funds are agreed between the Subcontractor and
the Contractor.
30.8 To the extent that the Cost of making good loss of or damage to the Subcontract
Plant, Site Materials and/or Subcontract Temporary Works in accordance with
Sub-clause 30.4 exceeds the Subcontractor's liability under Sub-clause 30.6 the
performance of such obligation shall be conditional upon:
(a) the Contractor confirming that sufficient funds are available to the Subcontractor
from the Contractor to implement and complete such work; and
(b) the terms of payment of such funds are agreed between the Subcontractor and
the Contractor.
To the extent that the Purchaser and/or the Contractor is unable to recover such
Cost under an insurance policy as a result of the act or omission of the
Subcontractor or its agents, employees or sub-contractors, the Subcontractor
shall reimburse such funds to the Contractor 15 Business Days of an invoice.
Such liability to reimburse shall be outside of all caps/limits of liability and the
Contractor may set off against such amount any undisputed amounts owing to it
by the Subcontractor.

30.9 The Subcontractor shall make good at the Subcontractor’s cost any loss or damage that
may occur to the Documentation prior to its delivery to the Contractor and/or the
Contract Manager.
30.10 The Subcontractor shall indemnify the Purchaser, the Contractor, the Project Manager
and any Affiliate of the Purchaser or of the Contractor against all damages, liabilities,
claims, costs and expenses in respect of the death, illness or injury to:
(a) Personnel of the Subcontractor; and
(b) Personnel of a Sub-subcontractor;
irrespective of any fault or negligence of the Purchaser, the Contractor, the Project
Manager or any Affiliate of the Purchaser or of the Contractor.
30.11 The Contractor shall indemnify the Subcontractor and any Sub-subcontractor
against all damages, liabilities, claims, costs and expenses in respect of the death, illness
or injury to:
(a) Personnel of the Purchaser, the Contractor or the Project Manager;
(b) Personnel of any Affiliate of the Purchaser or of the Contractor;
(c) Personnel of any other contractor employed by the Purchaser or the Contractor
and not by the Subcontractor; and
(d) the Project Manager or the Contract Manager;
irrespective of any fault or negligence of the Subcontractor or any Subsubcontractor.
30.12
30.12 The Subcontractor shall indemnify the Contractor against all losses, damages, liabilities,
claims, costs and expenses of the Subcontractor and/or any Sub-subcontractor which it
suffers or incurs in respect of loss of or damage to:
(a) the Subcontractor's Equipment

(b) any other property of the Subcontractor;
(c) any other property of any Sub-subcontractor; and
(d) irrespective of any fault or negligence of the Contractor.
Excluding Subcontract Temporary Works, the Subcontractor shall indemnify the
Contractor against all losses, damages, liabilities, claims, costs and expenses of the
Subcontractor and/or any Sub-subcontractor in respect of loss of or damage to:
(a) the Subcontractor’s Equipment;
(b) any other property of the Subcontractor; and
(c) any other property of any Sub-subcontractor;
irrespective of any fault or negligence of the Contractor.
30.13 The Subcontractor shall indemnify the Purchaser and the Contractor and any
Affiliate of the Purchaser or of the Contractor against all losses, damages, liabilities,
claims, costs and expenses in respect of loss of or damage to:
(a) the property of the Purchaser (other than any Free-lssue Materials which form
part of the Site Materials or which are covered by Sub-clause 24.6);
(b) the property of the Contractor (other than Subcontract Plant, Site
Materials, Subcontract Temporary Works and any Free-lssue Materials
which are covered by Sub-clause 24.6); and
(c) the property of any Affiliate of the Purchaser or of the Contractor;
to the extent caused by the wrongful or negligent act or omission of the Subcontractor,
any Sub-subcontractor, or the Personnel of the Subcontractor or any Sub-
subcontractor. The Subcontractor’s total aggregate liability to the Purchaser, the
Contractor and any Affiliate of the Purchaser or of the Contractor shall be limited to the
amount as may be stated in the Subcontract Agreement or, if no such sum is stated, to
£5,000,000 (five million pounds) in respect of any one incident or series of incidents
arising from any one event.
30.14 Subject to Sub-clause 30.13, the Contractor shall indemnify the Subcontractor and any
Sub-subcontractor against all damages, liabilities, claims, costs and expenses in respect
of loss of or damage to:
(a) the property of the Purchaser (other than any Free-lssue Materials which form
part of the Site Materials or which are covered by Sub-clause 24.6);

(b) the property of the Contractor (other than Subcontract Plant, Site
Materials, Subcontract Temporary Works and any Free-lssue Materials
which are covered by Sub-clause 24.6); and
(c) the property of any Affiliate of the Purchaser or of the Contractor;
irrespective of any fault or negligence of the Subcontractor or any Subsubcontractor.
30.15 Subject to Sub-clause 30.11 and 30.14, the Subcontractor shall indemnify the
Purchaser and the Contractor against all damages, liabilities, claims, costs and
expenses in respect of loss of or damage to:
(a) the property of a third party; and
(b) the death, illness or injury to a third party;
to the extent caused by the wrongful or negligent act or omission of the Subcontractor,
any Sub-subcontractor, or the Personnel of the Subcontractor or any Sub-
subcontractor.
30.16 The Subcontractor shall indemnify the Contractor against all damages, liabilities, claims,
costs and expenses which it suffers or incurs in respect of loss of loss or damage to:
(a) to equipment supplied under the Boiler Supply Contract; and
(b) feedstock supplied by the Purchaser to enable testing and commissioning to take place
and the resulting ash;
to the extent caused by any act or omission or breach of law of the Subcontractor, any Sub-
subcontractor, or the Personnel of the Subcontractor or any Sub-subcontractor.
31. Insurance
31.1 The Contractor shall provide and maintain, or shall ensure that the Purchaser provides and
maintains, a policy or policies of insurance in the joint names of the Contractor,
Subcontractor and Sub-subcontractors, covering all risks (subject to standard
exclusions) of loss of or damage to the Subcontract Plant, Site Materials and
Subcontract Temporary Works to the full cost of their reinstatement

(or such other sum as may have been agreed) including cover for loss or damage arising from:
The Contractor shall provide and maintain, or shall ensure that the Purchaser provides
and maintains, a policy or policies of insurance save as expressly set out in Sub-clause
31.4 in the joint names of the Contractor, Subcontractor and Sub-subcontractors, covering
all risks (subject to standard exclusions) of loss of or damage to the Facility, Subcontract
Plant, Site Materials and Subcontract Temporary Works to the full cost of their
reinstatement (or such other sum as may have been agreed) including cover for loss or
damage arising from
(a) any cause occurring prior to Take Over; and

(b) any testing, defect rectification or other activity after Take Over carried out or
supervised by the Subcontractor or any Sub-subcontractor under the
Subcontract.
The insurance shall cover physical damage caused by defective design, materials,
workmanship, plan or specification, but shall exclude the cost of replacement or recti-
fication which would have been incurred if replacement or rectification of any Defect in
the Subcontract Plant and/or Subcontract Temporary Works had been put in hand
immediately prior to the said physical damage.
The insurance shall contain a waiver of all rights of subrogation against the Subcon-
tractor and Sub-subcontractors.
The insurance shall become effective on the commencement of the Subcontract Works
and shall remain in place until the issue of the last Final Certificate. Unless otherwise
agreed the Contractor (or as applicable, the Purchaser), as policyholder, shall represent
the insured parties in all matters relating to the policy or policies.
31.2 The Subcontractor shall procure or arrange the provision of an all risk policy or policies of
insurance in the joint names of the Contractor and the Subcontractor covering the full
replacement value of all Subcontract Materials against loss or damage until delivery to
the Site. If the Subcontractor first takes possession of any Free- Issue Materials at a
location other than the Site, then the policy shall additionally cover such Free-lssue
Materials from the time when the Subcontractor first takes possession of them until
delivery to the Site.
The insurance shall contain a waiver of all rights of subrogation against the Contractor,
the Purchaser and the Project Manager.
31.3 The Subcontractor shall procure or arrange the provision of a policy or policies of
insurance covering loss or damage to the Subcontractor’s Equipment to the full
replacement value of the Subcontractor’s Equipment and becoming effective on the
commencement of the Subcontract Works or the date of the Subcontract Agreement
(whichever is earlier) and remaining in place until the issue of the last Final Certificate.
The insurance shall contain a waiver of all rights of subrogation against the Contractor,
the Purchaser and the Project Manager.
31.4 The Subcontractor shall provide and maintain a policy or policies of third party liability
insurance with insurers approved by the Contractor covering liability for death, illness or
injury to persons and loss of or damage to property for such sum as the Subcontractor
considers appropriate, but in any event not less than £10,000,000 (ten million pounds).
The insurance shall contain an indemnity to principals clause. The insurance shall
become effective on the commencement of the Subcontract Works or the date of the
Subcontract Agreement (whichever is sooner) and shall remain in place until the issue of
the last Final Certificate.
31.5 The Subcontractor and the Contractor shall each effect and maintain Employer’s Liability
insurance in accordance with Legislation.
31.6 The provisions of this Clause 31 shall not oblige the Subcontractor to take out and
maintain a policy of professional indemnity insurance.
[DN: If Subcontractor is not carrying out design]
[The provisions of this Clause 31 shall not oblige the Subcontractor to take out and maintain a
policy of professional indemnity insurance.]

[DN: OR If Subcontractor is carrying out design]
[The Subcontractor shall maintain professional indemnity insurance with a reputable

insurance company with a limit of indemnity of not less than £2,000,000 for any one
occurrence or series of occurrences arising out of any one event and in the annual
aggregate in respect of any negligent act or omission on the part of the Subcontractor in
the performance of the Subcontract Works. The Subcontractor shall maintain such
insurance throughout the duration of the Subcontract and for a period of 12 (twelve) years
following the date of the relevant take over certificate as identified in the Subcontract
Agreement, so long as such insurance is available in the market upon reasonable
commercial terms and at reasonable commercial rates. The Subcontractor shall
immediately inform the Contractor if such insurance ceases to be available on reasonable
commercial terms and at reasonable commercial rates (taking no account of the effect
thereon of the Subcontractor's or its sub-contractors' own claims records) and with the
approval of the Contractor (such approval not to be unreasonably withheld) make
alternative arrangements for protecting the interests of the parties.]
31.7 The Subcontractor shall obtain the approval of the Contractor in respect of the insur-
ances to be provided under Sub-clause 31.2 and each party shall provide to the other
details of the other insurances he is required to provide (or ensure are provided) by the
Subcontract or by Legislation. Each party shall also provide details in a timely manner of
any additions or restrictions thereto which may be made from time to time. Each party
shall provide to the other evidence of the payment of premiums.
If either party fails to produce satisfactory evidence that he has obtained and maintained
any insurance required by the Subcontract (or that he has ensured that such insurance
has been obtained and maintained) the other party shall be free, having given seven days
notice of his intention, to provide and maintain such insurance and pay the premium as
may be necessary for that purpose. The cost of such premium shall be reimbursed by the
defaulting party within twenty-eight days of being notified of the amount.
The Subcontractor shall obtain the approval of the Contractor in respect of the insurances
to be provided by the Subcontractor under this clause 31 and each party shall provide to
the other details of the other insurances he is required to provide (or ensure are provided)
by the Subcontract or by Legislation. Each party shall also provide details in a timely
manner of any additions or restrictions thereto which may be made from time to time.
Each party shall provide to the other evidence of the payment of premiums.
If either party fails to produce satisfactory evidence that he has obtained and maintained any
insurance required by the Subcontract (or that he has ensured that such insurance has
been obtained and maintained) the other party shall be free, having given seven days
notice of his intention, to provide and maintain such insurance and pay the premium as
may be necessary for that purpose. The cost of such premium shall be reimbursed by the
defaulting party within twenty-eight days of being notified of the amount
31.8 The Subcontractor shall not (and shall procure that none of its Sub-subcontractors shall
not) take any action or fail to take any reasonable action, or (insofar as it is reasonably
within its power) permit anything to occur in relation to it, which would entitle any insurer
to refuse to pay any claim under any insurance policy which either party and/or the
Purchaser is obliged to take out and maintain in accordance with the Subcontract and/or
the Main Contract. The Subcontractor shall provide information reasonably requested by
the Contractor for the purpose of bona fide disputes or insurance claims.

32. Completion of construction
32.1 If the Subcontract provides for the completion of construction of the Subcontract Plant to
be by Sections, Sub-clauses 32.2 to 32.8 shall apply as if a reference to the Subcontract
Plant were a reference to a Section.
32.2 As soon as the Subcontract Plant, or any part of it, is in the opinion of the Subcontractor
substantially complete and ready for inspection he shall so notify the Contract Manager
by means of a draft of a certificate (a Construction Completion Certificate), listing the
parts of the Subcontract Plant considered to be substantially complete and also the
criteria (which may include any test) listed in Schedule 14 (Criteria for the completion of
construction) which apply to such parts of the Subcontract Plant. The Subcontractor
shall propose a programme for such inspection and for any tests, commencing not sooner
than ten days nor later than seventeen days after the date of the notification unless the
Contract Manager agrees otherwise. If the Contract Manager requires the Subcontract
Plant to comply with any criteria which are not included in Schedule 14, he shall order a
Variation.
32.3 Unless otherwise agreed between the Contract Manager and the Subcontractor, the
Subcontractor shall begin such inspection and tests at the time notified and carry them
out in accordance with the quality assurance system specified in Schedule 6 (Quality
assurance and validation). The Project Manager and the Contract Manager shall be
entitled to attend and observe them. The Subcontractor shall give the Project Manager
and the Contract Manager every reasonable facility to satisfy themselves as to the
results of the tests.
32.4 Unless the Subcontract otherwise provides, or the Subcontractor and the Contract
Manager otherwise agree, the Subcontractor shall provide all labour, materials and
equipment necessary for the carrying out of the inspection and tests.
32.5 If the Project Manager and/or the Contract Manager do not attend any inspection or test
in accordance with Sub-clause 32.3, the Subcontractor shall nevertheless be entitled to
carry it out in their absence, and copies of the test results shall be deemed to be a correct
record of the test provided that the test is carried out and the results are recorded in
accordance with the quality assurance system specified in Schedule 6.
32.6 Upon satisfactory completion of any such inspection and tests, the Contract Manager
shall complete and issue to the Subcontractor with a copy to the Contractor the
completed Construction Completion Certificate confirming that the Subcontractor has
demonstrated to the Contract Manager that the Subcontract Plant or any part of it is
substantially complete and in a condition such that any procedures needed to be carried
out before the Subcontract Plant is put into operation may be safely carried out. Such
Construction Completion Certificate may include a note of any minor items requiring
completion before the issue of a Take Over Certificate.
32.7 If the Contract Manager is not satisfied that the Subcontract Plant or any part of it listed
in a draft Construction Completion Certificate in accordance with Subclause 32.2 is
substantially complete (including complying with the criteria required by Schedule 14), he
may endorse the draft Construction Completion Certificate
accordingly, stating in what way the Subcontract Plant or part is incomplete (including
not being in accordance with Schedule 14). The Subcontractor shall then complete the
Subcontract Plant or part as necessary and shall repeat the procedure described in Sub-
clause 32.2.
Sub-clause 22.7 shall apply to any repeat inspection or test.
32.8 If in Schedule 11 (Times of completion), a date is specified for the completion of

construction of the Subcontract Plant the Contract Manager shall, as soon as he has
signed all the Construction Completion Certificates in accordance with Sub-
clause 32.6, issue a Construction Completion Certificate forthe Subcontract
Plant.
32.9 Any disagreement arising underthis Clause 32 concerning the issue of a Construction
Completion Certificate which is not settled in accordance with Clause 46 (Disputes) may
be referred to an Expert in accordance with Clause 48 (Reference to an Expert).

32.10 Once the tests (which are intended to show that the Facility is commercially viable) set out
in Schedule 24 have been passed, the Subcontractor shall within 5 days issue the
declaration set out in Schedule 24.
32.11 Without prejudice to the Subcontractor's other obligations under this

Subcontract, the Subcontractor shall use its reasonable endeavours to carry out and
complete those tests referred to in clause 32.10 above as soon as possible after the
completion of the G59 connection test referred to in Schedule 15.
33. Taking Over

Sub-clauses 33.2 to 33.13 shall apply as if a reference to the Subcontract Plant were a
reference to a Section.
33.2 As soon as the construction of the Subcontract Plant has been demonstrated to be
complete in accordance with Clause 32 (Completion of construction) and is, in the opinion
of the Subcontractor, ready for carrying out any of the take over procedures (which may
include take over tests) specified in Schedule 15 (Take Over procedures), the
Subcontractor shall so notify the Contract Manager and shall specify a time not sooner
than ten days and not later than seventeen days after the date of the notification when the
Subcontractor intends to begin to carry out such procedures. If the Contract Manager
requires the Subcontractor to carry out any take over procedures which are not included
in Schedule 15, he shall order a Variation.
33.3 Unless otherwise agreed between the Contract Manager and the Subcontractor, the
Subcontractor shall begin such procedures at the time notified and carry them out in
accordance with the quality assurance system specified in Schedule 6 (Quality
assurance and validation). The Project Manager and the Contract Manager shall be
entitled to attend and observe them. The Subcontractor shall give the Project Manager
and the Contract Manager every reasonable facility to satisfy themselves as to the
results of any take over tests.
33.4 Unless the Subcontract otherwise provides, or the Subcontractor and the Contract
Manager otherwise agree, the Subcontractor shall provide all labour, materials and
equipment necessary for the carrying out of the take over procedures.
33.5 If the Project Manager and/or the Contract Manager do not attend any take over
procedure in accordance with Sub-clause 33.3, the Subcontractor shall nevertheless be
entitled to carry it out in their absence, and copies of the test results shall be deemed to
be a correct record of the test provided that the test is carried out and the results are
recorded in accordance with the quality assurance system specified in Schedule 6.
33.6 If the Subcontract Plant fails to pass a take over test, the Subcontractor, after making
such adjustments as he considers necessary, shall repeat such test at a time agreed
between the Subcontractor and the Contract Manager, or notified in accordance with
Sub-clause 33.2, and the Project Manager and the Contract Manager shall be entitled
to attend and observe the test. If the Contract Manager is of the opinion that any such
adjustment made by the Subcontractor makes it desirable, he may require the
Subcontractor to repeat any take over test which has already been successfully carried
out, and the Subcontractor shall do so. Subject only to this Sub-clause 33.6 the
Subcontractor shall not be bound to repeat for the purposes of this Clause 33 any take
over test that has already been successfully carried out.
Sub-clause 22.7 shall apply to any repeat take over test.
33.7 As soon as any minor items referred to in Sub-clause 32.6 have been completed and,
subject to Sub-clause 33.10, all the procedures specified in Schedule 15 have been
successfully carried out, including any which affect the operability or safety of the
Subcontract Plant, the Contract Manager shall issue a certificate (a Take Over
Certificate) for the Subcontract Plant to the Subcontractor with a copy to the
Contractor stating that the Subcontractor has satisfied the requirements of the
Subcontract Specification and Schedule 15, whereupon the Subcontract Plant, apart
from any parts that are excluded from the Taking Over by the terms of the

Certificate, shall be at the risk of the Contractor. The Contractor shall thereupon be
responsible for the care, safety, operation, servicing and maintenance of the Subcontract
Plant so certified and shall have the right to operate the Subcontract Plant.
The Take Over Certificate may include a list of minor items still to be completed by the
Subcontractor, and a list of take over procedures omitted by operation of Subclause
33.10.
Any disagreement arising under this Sub-clause 33.7 concerning the issue of a Take
Over Certificate which is not settled in accordance with the provisions of Clause 46
(Disputes) may be referred to an Expert in accordance with Clause 48 (Reference to an
Expert).
33.8 As soon as shall be reasonably possible afterthe issue of the Take Over Certificate the
Subcontractor shall complete to the satisfaction of the Contract Manager all items noted
on the Take Over Certificate as not being complete at the date of the Take Over
Certificate. If the Subcontractor fails so to do the Contract Manager may
arrange for such work to be carried out by others in accordance with Sub-clause 37.6.
33.9 Notwithstanding the failure of the Subcontract Plant to pass any take over test or if
certain procedures have not been carried out, the Contract Manager may with the
Subcontractor’s consent issue a Take Over Certificate in respect of the Subcontract
Plant. Such a Certificate may either exclude from Taking Over such parts of the
Subcontract Plant as are specified, being parts for which the specified procedures have
not been carried out, or may specify the take over tests which the Subcontract Plant has
failed to pass. In either case the Subcontractor shall carry out any omitted procedure or
repeat any test which the Subcontract Plant has not passed as and when required by the
Contract Manager who shall give ten days notice of such requirement. The
Subcontractor shall become entitled to a separate Take Over Certificate as soon as the
applicable take over procedures have been completed satisfactorily.
33.10 If in the opinion of the Subcontractor he has been prevented from carrying out any take
over procedure as provided in this Clause 33 by reason of any act or omission of the
Contractor or of the Contract Manager, or of the Purchaser or of the Project Manager,
or of some other contractor employed by the Contractor or the Purchaser, then when
any other relevant take over procedures have been successfully completed, the
Subcontractor may request the Contract Manager to issue a Take Over Certificate.
The Contract Manager shall, if in his opinion such action is reasonable, issue such a
Certificate which shall have effect as stated in Sub-clause 33.7. The Subcontractor shall
during the Defects Liability Period carry out any omitted take over procedure as and
when required by the Contract Manager who shall give ten days notice of such
requirement.
Any disagreement arising under this Sub-clause 33.10 concerning the Contract
Manager’s refusal to issue such a Take-Over Certificate which is not settled in
accordance with Clause 46 may be referred to an Expert in accordance with Clause 48.
The Contract Manager or the Contractor has the right to prevent the Subcontractor from performing
any of the Take Over Tests. If the Take Over Tests are not able to commence or are
suspended in part or whole because of a delay which is caused by or is the responsibility
of the Contractor the Subcontractor shall be entitled to an extension of time (subject to
and in accordance with clauses 14.4(c), (d) or (e) inclusive) and the Subcontractor shall
notify the Contract Manager under clause 14.1. As soon as reasonably possible after the
suspension of the Schedule 15 testing, the Subcontractor and the Contract Manager shall
agree the scope of the Schedule 15 testing that remains to be completed. In any
notification issued under sub-clause 14.1 the Subcontractor shall include an assessment
of the length of the delay.
with Clause 46 may be referred to an Expert in accordance with Clause 48.
33.11 Any effect on the results of a deferred take over procedure conducted in accordance with
Sub-clause 33.9 or 33.10 which can reasonably be shown to be due to the prior use of the
Subcontract Plant by the Contractor or the Purchaser shall be taken into account in
assessing such results.
If the Subcontractor incurs any additional Cost as a result of such a deferment, other
than any Cost resulting from any breach of contract by the Subcontractor, he shall be
entitled to an addition to the Subcontract Price determined in accordance with and

subject to Clause 19 (Claims).
33.12 If the Contractor has Taken Over the Subcontract Plant as a result of the issue of a
Take Over Certificate in accordance with Sub-clauses 33.9 or 33.10 and subsequently
the Subcontract Plant fails to satisfy the requirements of any relevant take over
procedure which had previously failed or been omitted then, subject to the Subcontractor
having been given a reasonable opportunity to carry out such take over procedure
including making any necessary adjustments to the Subcontract Plant, the Contract
Manager may issue a cancellation certificate to the Subcontractor with a copy to the
Contractor stating that any Acceptance Certificate which has been deemed to be issued
in terms of Sub-clause 36.1 is cancelled. The

Subcontractor shall repay all amounts paid to him as a result of such Acceptance, and
the rights and obligations of the parties shall be as if the Contractor had never Accepted
the Subcontract Plant.
33.13 After the issue of a Take Over Certificate, and until the Final Certificate has been
issued, the Subcontractor shall have the right of access, together with the Contractor
and with any relevant Sub-subcontractor, during all reasonable working hours at their
own risk and cost to inspect any part of the Subcontract Plant and to take notes of the
related working, performance and maintenance records. Access shall only be allowed to
the Subcontractor’s and any Sub-subcontractor’s personnel whose names have
previously been communicated to the Contract Manager. Subject to the Contract
Manager’s and the Project Manager’s approval, the Subcontractor may at his own risk
and cost make any tests which he considers desirable, provided such tests do not
interfere unreasonably with the Purchaser’s use or maintenance of the Plant.
33.13 After the issue of a Take Over Certificate, and until the Final Certificate has
been issued, the Subcontractor shall have the right of access by himself or with any
relevant Sub-subcontractor, during all reasonable working hours at their own risk and cost
to inspect any part of the Subcontract Plant and to take notes of the related working,
performance and maintenance records under the supervision of the Contract Manager.
Access shall only be allowed to the Subcontractor's and any Sub-subcontractor's
personnel whose names have previously been communicated to the Contract Manager.
Subject to the Contract Manager's approval, the Subcontractor may at his own risk and
cost make any tests which he considers desirable, provided such tests do not interfere
unreasonably with the Purchaser's use or maintenance of the Facility.
34. Site clearance

34.1 Unless otherwise agreed with the Contract Manager, the Subcontractor shall within
fourteen days after the Contractor has Taken Over the Subcontract Plant dismantle
and remove all Subcontract Temporary Works and remove from the Site all waste and
debris, Subcontractor’s Equipment, including temporary buildings and structures, and
other things of his, other than those that are necessary for the proper performance of the
Subcontractor’s remaining obligations and shall leave the Site in an orderly and safe
condition. Where the Subcontract Plant is Taken Over by Sections, the Subcontractor
shall remove such things from within the defined boundary of each Section as it is Taken
Over, or if there be no such boundary then from the area about the Section as instructed
by the Contract Manager.
34.1 Unless otherwise agreed with the Contract Manager, the Subcontractor shall
within ten days after the Contractor has Taken Over the Subcontract Plant dismantle and
remove all Subcontract Temporary Works and remove from the Site all waste and debris,
Subcontractor's Equipment, including temporary buildings and structures, and other
things of his, other than those that are necessary for the proper performance of the
Subcontractor's remaining obligations and shall leave the Site in an orderly and safe
condition.
34.2 As soon as the whole of the Subcontract Plant has been Accepted the Subcontractor
shall remove all his equipment and other possessions from the Site other than such
things as are then known to be required for making good Defects under Clause 37
(Liability for Defects) and any Subcontract Materials which are to be handed over to the
Contractor in accordance with Sub-clause 34.5.
34.3 No Subcontract Materials shall be removed from the Site unless:

(a) they are not in accordance with the Subcontract and are being removed for the
purpose of:
(i) modification; or
(ii) replacement;
or
(b) the Contract Manager has previously consented to their removal; or

(c) in the case of bulk materials, they are surplus to the requirements of the

Subcontract Works.
34.4 The ownership of all Subcontract Materials removed from the Site in accordance with
Sub-clause 34.3 (a)(ii), (b) and (c) shall revert to the Subcontractor upon removal.
Subcontract Materials falling within the description of Sub-clause 34.3 (a)(i) shall be
marked as the Purchaser’s or the Contractor’s property, as instructed by the Contract
Manager, and stored and handled separately from other materials.
34.5 The Subcontractor shall remove any surplus Subcontract Materials, except that if the
parties shall so agree any surplus Subcontract Materials shall be handed over to the
Contractor by the Subcontractor before he leaves the Site and an addition to the
Subcontract Price shall be determined in accordance with and subject to Clause 19
(Claims) to take account of such Subcontract Materials being additional to the
requirements of the Subcontract Works.
If the Contractor shall so require, the Subcontractor shall remove surplus Free- Issue
Materials and dispose of them on behalf of the Contractor. The proceeds of such
disposal may be deducted from any sums that would otherwise be payable under the
Subcontract by the Contractor, or at the Contractor’s option paid by the Subcontractor
to the Contractor immediately following such disposal. Otherwise such surplus Free-
lssue Materials shall be handed over by the Subcontractor before he leaves the Site.
35. Performance tests

35.1 If under the Subcontract the Subcontractor makes specific guarantees in respect of the
performance of the Subcontract Plant as set out in Schedule 17 (Performance
guarantees and damages for failure) this Clause 35 shall apply. Otherwise Subclauses
35.2 to 35.18 shall not form part of the Subcontract.
35.2 If the Subcontract provides for the performance of the Subcontract Plant to be tested in
Sections, Sub-clauses 35.3 to 35.17 shall apply as if a reference to the Subcontract
Plant were a reference to a Section.
35.3 The performance tests to be carried out on the Subcontract Plant shall be those
specified in Schedule 16 (Performance tests and procedures). If any unspecified test is
subsequently proposed, the Subcontractor and the Contract Manager shall discuss
whether such tests should be carried out. If they agree that the test should be carried out,
the Contract Manager shall order the test as a Variation.
35.4 The performance tests shall be commenced within the Performance Test
Commencement Period. If the performance tests have not been commenced within the
Performance Test Commencement Period the Contract Manager shall decide, subject
to Sub-clause 35.7, an appropriate extension to the Performance Test Commencement
Period.
If the performance tests have not been commenced within the Performance Test
Commencement Period because of a delay which is caused by or is the responsibility of
the Contractor and if the Subcontractor incurs additional Cost as a consequence of such
delay the Subcontractor shall be entitled to an addition to the Subcontract Price
determined in accordance with and subject to Clause 19 (Claims).
Commencement Period because of a delay which is caused by or is the responsibility of
the Subcontractor he shall not be entitled to an addition to the Subcontract Price as a
consequence of such delay.
Commencement Period because of a delay which is neither caused by nor is the
responsibility of either the Contractor or the Subcontractor the Subcontractor shall not
be entitled to an addition to the Subcontract Price as a consequence of such delay.
35.5 The performance tests shall be carried out by the Purchaser or the Contractor in the
presence of the Subcontractor, unless the Subcontractor fails or declines to attend. The
Contractor shall notify the Subcontractor and the Contract Manager at least ten days in
advance of the Purchaser’s or his readiness to carry out the performance tests, including
a proposal for the time at which the tests should commence. The Subcontractor shall
confirm, at least four days before the time proposed by the Contractor, if he will attend

the tests. If the Subcontractor declines or does not attend any performance test the
Contractor shall nevertheless be entitled to carry it out in his absence.
The Performance Test Period shall commence when the first performance test
commences.
35.6 The performance tests shall be carried out within the Performance Test Period.
If the performance tests have not been completed within the Performance Test Period
because of a delay which is caused by or is the responsibility of the Contractor the
Contract Manager shall, but only if the Subcontractor so agrees and subject to Sub-
clause 35.7, decide an appropriate extension to the Performance Test
Period. If the Subcontractor thereby incurs additional Cost the Subcontractor shall be
entitled to an addition to the Subcontract Price determined in accordance with and
subject to Clause 19.
because of a delay which is caused by or is the responsibility of the Subcontractor the
Contract Manager shall, but only if the Contractor so agrees and subject to Sub-clause
35.7, decide an appropriate extension to the Performance Test Period. The
Subcontractor shall not be entitled to an addition to the Subcontract Price under this
Sub-clause 35.6 as a consequence of such delay.
because of a delay which is neither caused by nor is the responsibility of either the
Contractor or the Subcontractor the Contract Manager shall, subject to Sub-clause
35.7, decide an appropriate extension to the Performance Test Period. The
Subcontractor shall not be entitled to an addition to the Subcontract Price under this
Sub-clause 35.6 as a consequence of such delay.
35.7 Notwithstanding any other provision of the Subcontract, the Performance Test
Commencement Period and the Performance Test Period shall end no later than
the end of the Defects Liability Period.
35.8 The performance tests shall be carried out as far as practicable under the conditions
detailed in Schedule 16. The Purchaser or the Contractor shall perform the perfor-
mance tests using suitably trained and experienced operators and in accordance with the
manuals provided by the Subcontractor in accordance with Clause 21 (Documentation)
and such other instruction as the Subcontractor may give in the course of carrying out
such tests. If any such instruction conflicts in any way with or significantly adds to the
manuals, the Subcontractor shall issue it as soon as possible as an amendment to the
manuals.
35.9 Subject to Sub-clause 35.7 every performance test shall be carried out to completion
unless an authorised representative of the Purchaser, the Contractor, the Project
Manager, the Contract Manager or the Subcontractor shall order it to be stopped
because its continuance would be unsafe or could damage the Subcontract Plant or
other property, or the Purchaser or the Contractor stops the test for any other reason.
35.10 The Contract Manager shall be responsible for ensuring that data collected during the
performance tests are a true and correct record of the tests.
The results of the performance tests shall be compiled and evaluated jointly by the
Contractor, the Contract Manager and the Subcontractor. In the absence of agreement
on the results of the performance tests, the Contract Manager shall determine the
results. Any effect on the results of the performance tests caused by prior operation of the
Subcontract Plant or arising from a delay, other than a delay which is caused by or is the
responsibility of the Subcontractor, shall be taken fully into account in assessing such
results.
Any necessary adjustments to the results of the performance tests to take account of
actual operating conditions and/or allowances for measurement tolerances shall be made
in accordance with Schedule 16, or if not stated in Schedule 16, in accordance with
good engineering practice.
35.11 If the Subcontract Plant fails to pass any performance test or if any performance test is
stopped before its completion the Contractor shall, or shall ensure that the Purchaser
shall, within a reasonable time:
(a) permit access to the Subcontract Plant by the Subcontractor to investigate the
causes of any failure to pass a performance test;

(b) permit the Subcontractor to make any adjustment and/or modification to any part
of the Subcontract Plant;
(c) shut down any part of the Subcontract Plant, if the Subcontractor reasonably
requires it for either of the reasons stated in (a) or (b) above;
(d) restart the Subcontract Plant after completion of any adjustments and/or
modification; and/or
(e) repeat any performance test;
provided that the Performance Test Period has not expired.

Any investigation into a failure to pass a performance test and any adjustments and
modifications shall be made by the Subcontractor as soon as practicable.
The timing of any shutdown referred to in (c) above shall be agreed between the
Subcontractor, the Contract Manager and the Project Manager.
The Subcontractor shall, if so required by the Contract Manager, submit to the Contract
Manager for his approval details of the adjustments and/or modifications which he
proposes to make.
The Subcontractor shall make such adjustments and/or modifications at his own cost,
provided that if the need for them was caused by the Purchaser, the Contractor or by
any other contractor employed by the Purchaser or any other subcontractor employed by
the Contractor, the Subcontractor shall be entitled to an addition to the Subcontract
Price determined in accordance with and subject to Clause 19.
35.12 If by the end of the Performance Test Period the Subcontract Plant has failed any
performance test and provided that the results of the performance tests are within any
limit for the application of liquidated damages specified in Schedule 17, the
Subcontractor shall pay any liquidated damages due to the Contractor in accordance
with Schedule 17.
(a) It is expressly agreed that these Performance Liquidated damages do not constitute a
penalty and the parties hereby agree that the liquidated damages set out in Schedule 17
represent a genuine pre-estimate of losses likely to be suffered by the Contractor in the
event of a shortfall in Subcontract Plant performance and/or reliability and that such
Performance Liquidated Damages shall, subject to paragraph (b) below and save as
regards the Contractor's rights under Sub-clause 35.14 and to terminate the Subcontract
pursuant to Clause 44.2, be the Contractor's sole and exclusive remedy for the
performance shortfall referred to in this Sub-clause 35.12. The Contractor and the
Subcontractor expressly agree that each shall not raise any claim objection or defence
challenging the validity of, or otherwise questioning the reasonableness of, the
Performance Liquidated Damages specified in Schedule 17.
(b) In the event that the provisions for Performance Liquidated Damages set out in
this Sub-clause are held to be unenforceable as a result of a claim, objection, defence,
dispute or proceedings raised or brought by the Subcontractor, the Subcontractor
expressly agrees to pay the Contractor all costs, losses and damages whatsoever
(including loss of profit, loss of use and loss of production) incurred or payable by the
Contractor arising from or in consequence of the failure to pass the Performance Tests
within the Performance Test Period provided that the aggregate amount of damages
payable in such circumstances do not exceed the amount that would have been payable
had the Performance Liquidated Damages been enforceable.
35.13 If by the end of the Performance Test Period the results of any performance test remain
outside any limit for the application of liquidated damages specified in Schedule 17, the
Contractor may at his option but subject to Sub-clause 35.7 instruct the Contract
Manager to extend the Performance Test Period and instruct the Subcontractor to
investigate or to co-operate with the Contract Manager or others in the investigation of
the reasons for the shortfall in performance.
The Subcontractor shall bear his own cost of any such additional work, including any
costs associated with any repeat performance test.
35.14 Subject to Sub-clause 35.13, if by the end of the Performance Test Period the results of
any performance test are outside any limit for liquidated damages specified in Schedule
17 the Contract Manager shall determine the amount of compensation due from the
Subcontractor to the Contractor for failure of the Subcontract Plant to comply with a

guarantee stated in Schedule 17.
35.14 Subject to Sub-clause 35.13, if by the end of the Performance Test Period the
results of any Performance Test are outside any limit for Performance Liquidated
Damages specified in Schedule 17 the Contract Manager shall determine the amount of
compensation due from the Subcontractor to the Contractor for failure of the Subcontract
Plant to comply with a guarantee stated in Schedule 17 and/or the Contractor may
terminate under Sub-clause 44.2
35.15 Subject to Sub-clause 35.16 if by the end of the Defects Liability Period:
(a) any performance test has been started but not completed (other than a repeat
performance test as described at (b) below); or
(b) any repeat performance test, to be carried out after the Subcontractor has made
any adjustment or modification to the Subcontract Plant as a consequence of a
failed earlier test, has not been completed (whether or not such repeat test was
started);
the Contract Manager shall determine the amount of compensation (if any) due from the
Subcontractor to the Contractor in respect of the performance guarantee associated with
any circumstance described at (a) or (b) above having regard to all relevant
circumstances and the results (if any) obtained from any completed or partially completed
performance test.
35.16 If for any reason which is not the responsibility of the Subcontractor any performance test
has not been started for the first time in sufficient time to allow its completion by the end
of the Defects Liability Period such performance test shall be deemed to have been
passed.
35.16 Notwithstanding any other provision of the Subcontract, where, at the end of
the Performance Test Period, the Performance Tests (or any repetition thereof)
demonstrate the Subcontract Plant's non-compliance with the Minimum Performance
Guarantee and/or that the Purchaser has been deprived of substantially the whole of the
benefit of the Subcontract Works, such failure shall be deemed to constitute a material
breach of the Subcontract which is not capable of remedy and the Contractor may
proceed to terminate the Subcontract in accordance with Sub-clause 44.2(c).
35.17 Upon the passing of all the performance tests or:

(a) payment or allowance by the Subcontractor of liquidated damages in accordance
with Sub-clause 35.12 for failure of the Subcontract Plant to comply with one or
more guarantees stated in Schedule 17;
(b) payment or allowance by the Subcontractor of compensation in accordance with
Sub-clause 35.14 and/or Sub-clause 35.15 for failure of the Subcontract Plant to
comply with one or more guarantees stated in Schedule 17; and/or
(c) the deemed passing of one or more performance tests in accordance with Sub-
clause 35.16 in respect of one or more guarantees stated in Schedule 17;
the Subcontractor shall be entitled to the issue of an Acceptance Certificate in
accordance with Clause 36 (Acceptance).
(a) payment or allowance by the Subcontractor of Performance Liquidated Damages in

accordance with Sub-clause 35.12 for failure of the Subcontract Plant to comply with one
or more guarantees stated in Schedule 17; and/or
(b) payment or allowance by the Subcontractor of compensation in accordance with Sub-

clause 35.14 and/or Sub-clause 35.15 for failure of the Subcontract Plant to comply with
one or more guarantees stated in Schedule 17,
the Subcontractor shall be entitled to the issue of an Acceptance Certificate in accordance

with Clause 36 (Acceptance).
35.18 Any disagreement arising under this Clause 35 which is not settled in accordance with
Clause 46 (Disputes) may be referred to an Expert in accordance with Clause 48

36. Acceptance
36.1 If performance tests are to be conducted in accordance with Clause 35 (Performance
tests), Sub-clauses 36.2 to 36.5 shall apply. Otherwise any Take Over Certificate issued
under Clause 33 (Taking Over) shall be deemed to be an Acceptance Certificate for the
purposes of the Subcontract and Sub-clauses 36.2 to 36.5 shall not apply.
36.2 If the Subcontract provides for the performance of the Subcontract Plant to be tested in
Sections, Sub-clauses 36.3 to 36.5 shall apply as if a reference to the Subcontract Plant
were a reference to a Section.
36.3 As soon as the Subcontract Plant has passed all the performance tests or otherwise
Sub-clause 35.17 has been complied with, the Contract Manager shall issue to the
Subcontractor a certificate (an ‘Acceptance Certificate’) with a copy to the Contractor
stating that the Subcontract Plant is Accepted by the Contractor as from the date
thereof. The Acceptance Certificate shall list any known Defects which the
Subcontractor is bound to make good under Clause 37 (Liability for Defects) and any
minor items still remaining to be completed following the issue of a Take Over Certificate
under Sub-clause 33.7.
36.4 Acceptance of the Subcontract Plant by the Contractor shall not affect the obligations
of the Subcontractor under Clause 37.
36.5 At any time after Taking Over the Subcontract Plant, the Contractor may notify the
Subcontractor that he elects to Accept the Subcontract Plant, expressly stating that his
notification is given under this Sub-clause 36.5. The Contract Manager shall not have
authority to give such notification on the Contractor’s behalf.
The Contract Manager shall then issue an Acceptance Certificate. The Acceptance of
the Subcontract Plant under this Sub-clause 36.5 shall constitute a waiver by the
Contractor of any remaining obligation of the Subcontractor to ensure that the
Subcontract Plant passes the performance tests.
37. Liability for Defects

Sub-clauses 37.2 to 37.12 shall apply as if a reference to the Subcontract Plant were a
reference to a Section.
37.2 If at anytime before the Subcontract Plant is Taken Over in accordance with Clause 33
(Taking Over) or during the Defects Liability Period, the Contract Manager:
(a) decides that any matter is a Defect; and
(b) as soon as reasonably practicable notifies the Subcontractor of the particulars of
the Defect;
the Subcontractor shall as soon as reasonably practicable make good the Defect so
notified and the Contractor shall so far as may be necessary place the Subcontract
Plant at the Subcontractor’s disposal for this purpose. The Subcontractor shall, if so
required by the Contract Manager, submit his proposals for making good any Defect to
the Contract Manager for his approval.
37.3 Subject to Sub-clause 37.12, if any Defect arises from any breach of the Subcontract by
the Subcontractor the Subcontractor shall bear his own cost of making good the Defect.
In the case of any other matter made good by the Subcontractor, the work done by the
Subcontractor shall be the subject of a Variation.
Subject to Sub-clause 37.12; the Subcontractor shall bear his own cost of making good
the any Defect (Subcontractor Fault).
In the case being notified by the Contract Manager of a Variation Order relating to rectification of a
Defect (Other), the Subcontractor shall respond in accordance with the provisions and
procedures of Clause 16 (Variations). Any disagreement arising under this Sub-clause
37.2 which is not settled in accordance with Clause 46 (Disputes) may be referred to an
Expert in accordance with Clause 48 (Reference to an Expert).

If it is agreed (or determined by an Expert) that a Defect that was initially classed as
Defect (Other) was actually a Defect (Subcontractor Fault), then the Subcontractor shall
within 10 days of such agreement or determination reimburse to the Contractor all sums
paid to the Subcontractor in respect of such Defect and the Contractor shall have the
same rights and remedies available to it as if such Defect had always been classed a
Defect (Subcontractor Fault).
37.4 If a Defect is made good after the issue of a Take Over Certificate the Contract
Manager may require the Subcontractor to repeat any appropriate take over test for the
purpose of establishing that the Defect has been made good. Sub-clause 22.7 shall apply
to any such repeat test.
37.5 If in the course of making good any Defect which arises during the Defects Liability
Period the Subcontractor repairs, replaces or renews any part of the Subcontract Plant,
this Clause 37 shall apply to that part of the Subcontract Plant so repaired, replaced or
renewed and the Defects Liability Period for such part shall commence afresh from the
date that the repair, replacement or renewal of such part was completed.
37.6 If the Subcontractor does not make good within a reasonable time any Defect which he
is liable to make good under Sub-clause 37.2 or complete any item noted on a Take
Over Certificate as described in Sub-clause 33.8 then the Contractor may, in addition to
any other remedies or relief available to him under the Subcontract, proceed to do the
work in such a manner as the Contract Manager may decide, including the employment
of a third party, provided that the Contractor gives at least ten days notice of his intention.
37.7 If the Purchaser or the Contractor reasonably requires that any Defect notified to the
Subcontractor under Sub-clause 37.2 which arises during the Defects Liability Period
be made good urgently and the Subcontractor is unable or fails to comply within a
reasonable time, the Purchaser or the Contractor may, in addition to any other remedies
or relief available to him under the Subcontract and without further notification, proceed
to do the work in such a manner as the Project Manager or the Contract Manager may
decide, including the employment of a third party.
37.7 If the Purchaser or the Contractor notifies the Subcontractor that any Defect
(Subcontractor Fault) is a Defect that is causing the Facility to be unable to export
electricity or is reducing electrical output and the Subcontractor is unable or fails to
commence works within 24 hours of such notification (or such other time as may be
reasonably agreed between the Subcontractor and the Contract Manager having due
regard for the practicalities of procuring the necessary materials to carry out the making
good), or if having commenced such works he ceases or suspends such work or does not
make good within a reasonable time (having regard to the urgency of the matter) the
Purchaser and/or Contractor may, in addition to any other remedies or relief available to
him under the Subcontract and without further notification, proceed to do the work in such
a manner as the Project Manager and/or Contract Manager may decide, including the
immediate employment of a third party.
37.8 If the Contractor, or as applicable the Purchaser, has made good a Defect in accor-
dance with Sub-clause 37.6 or 37.7, the Subcontractor shall reimburse the Contractor
his reasonable costs, or as applicable pay to the Contractor the Purchaser’s reasonable
costs, of so doing provided that the Contractor complies with Subclause 4.3 and submits
a claim in accordance with Sub-clause 19.5. The Contract Manager and the
Subcontractor may agree the amount to be paid by the Subcontractor, or in the absence
of agreement the Contract Manager shall determine such amount as may be reasonable.
Such amount shall be:
(a) deducted from any money that would otherwise be payable under the
Subcontract; or
(b) paid by the Subcontractor to the Contractor.
with Clause 46 (Disputes) may be referred to an Expert in accordance with Clause 48
37.9 If the Subcontract Plant cannot be used because of a Defect to which this Clause 37
applies, the Defects Liability Period shall be extended by a period equal to the period
during which it cannot be used. Similarly the Defects Liability Period shall be extended
by any period wherein the Subcontract Plant cannot be used by reason of the

Subcontractor putting or attempting to put the Subcontract Plant into such condition that
it passes any relevant take over procedure under Clause 33 (Taking Over) or any relevant
performance test under Clause 35 (Performance tests).
37.9 If the Subcontract Plant and/or the Facility cannot be used because of a Defect
(Subcontractor Fault) to which this Clause 37 applies, the Defects Liability Period shall be
extended by a period equal to the period during which it cannot be used. Similarly the
Defects Liability Period shall be extended by any period wherein the Facility cannot be
used by reason of the Subcontractor putting or attempting to put the Subcontract Plant
into such condition that it passes any relevant Take Over procedure under Clause 33 or
any relevant Performance Test under Clause 35 (Performance tests). If a Defect
(Subcontractor Fault) is unable to be repaired because there is no required spare part at
the Site, and as a result of the Defect the Facility is unable to export electricity or there is
reduced electrical output, then the Contractor may also charge to the Subcontractor daily
liquidated damages at the rate set out in Schedule 12 during the period from the date of
receipt of the notification to the Contractor of such defect until the date on which the
Defect is made good to the satisfaction of the Contract Manager. The Parties agree that
such amount is a genuine pre-estimate of the power income losses during the outage.
37.10 If for any reason the Purchaser or the Contractor does not allow the Subcontractor
the necessary access to repair or correct any Defect, including permitting the
Subcontractor to remove any defective Subcontract Materials, the Subcontractor
shall have no obligation to make such repair. However if the Contractor merely defers the
timing of such repair or corrective work for his own or the Purchaser’s convenience the
Subcontractor shall be entitled to an addition to the Subcontract Price determined in
accordance with and subject to Clause 19 (Claims) in respect of any additional Cost
which the Subcontractor incurs as a consequence of such deferment, irrespective of the
underlying liability for the cost of the repair or corrective work. In no circumstance shall
the Contractor require the deferment of the commencement of any repair or correction
beyond the end of the relevant Defects Liability Period or any extension in accordance
with this Clause 37.
37.10 If any part of the Subcontract Plant has a guaranteed working life under normal
running conditions stated in Schedule 10 (Parts with limited working life and spare parts)
to be less than the period stated in Sub-clause 1.1 in the definition of the Defects Liability
Period, then the Defects Liability Period for such part shall be the guaranteed working life
so stated
37.11 If any part of the Subcontract Plant has a guaranteed working life under normal running
conditions stated in Schedule 10 (Parts with limited working life and spare parts) to be
less than the period stated in Sub-clause 1.1 in the definition of the Defects Liability
Period, then the Defects Liability Period for such part shall be the guaranteed working
life so stated.
37.11 The Contractor may claim in relation to Latent Defects at any time during the
Latent Defects Liability Period
37.12 If in making good Defects which appear in the Subcontract Plant after the date of the
relevant Acceptance Certificate the Subcontractor incurs any Cost in excess of the
amount stated in the Subcontract Agreement he shall be entitled to an addition to the
Subcontract Price equal to such excess provided that the Subcontractor submits a claim
in accordance with and subject to Clause 19.
38. Final Certificate

38.1 Subject to Sub-clause 38.2, as soon as the Defects Liability Period for the Subcontract
Plant or Section has expired and the Subcontractor has made good in accordance with
Clause 37 (Liability for Defects) all Defects that have within such period appeared in the
Subcontract Plant or Section and an Acceptance Certificate has been issued in respect
of the Subcontract Plant or Section in accordance with Clause 36 (Acceptance) the
Contract Manager shall issue a certificate (a ‘Final Certificate’) to the Subcontractor
with a copy to the Contractor stating that the Subcontract Plant or Section and any
related work have finally been completed and the date of that completion.
38.2 If Clause 37 continues to apply to any part of the Subcontract Plant, the Contract

Manager shall as soon as Sub-clause 38.1 is otherwise satisfied, issue a Final Certi-
ficate for the remainder of the Subcontract Plant or Section in which such part is
located, clearly identifying such part as being excluded from the Final Certificate. Such
part shall then be treated as if it were a separate Section and shall be the subject of a
separate Final Certificate.
38.3 The Subcontractor shall have no right or obligation to do any further work to any part of
the Subcontract Plant after a Final Certificate has been issued in respect of that part
and that Final Certificate shall constitute conclusive evidence for all purposes and in any
proceedings whatsoever between the Contractor and the Subcontractor that the
Subcontractor has completed that part of the Subcontract Plant and made good all
Defects therein in all respects in accordance with his obligations under the Subcontract.
Where there is more than one Final Certificate the last to be issued shall be identified as
being the last Final Certificate.
No Final Certificate shall be conclusive as stated above if it was procured by any fraud
on the part of the Subcontractor or any Sub-subcontractor.
38.4 Save where there is an allegation of fraud, any disagreement arising under this Clause 38
concerning whether or not a Final Certificate should have been issued which is not
settled in accordance with Clause 46 (Disputes) may be referred to an Expert in
accordance with Clause 48 (Reference to an Expert).
39. Subcontract Price

39.1 Subject to any other term of the Subcontract, the Subcontract Price shall be the sum
stated in the Subcontract Agreement.
39.2 Any money paid in respect of any indemnity under the Subcontract shall not form an
addition to the Subcontract Price, except as may be agreed in accordance with Sub-
clause 30.8(b) for any payment under the indemnity set out in Sub-clause 30.7.

40. Records and audits
40.1 The Subcontractor’s books and records and related documents including those required
under Sub-clauses 3.7, 14.1 and 19.1 and Schedule 21 (Reports and records) or under
any other provision of the Subcontract shall be kept and maintained until:
(a) six years after the issue of the last Final Certificate; or
(b) any audit undertaken in accordance with Sub-clause 40.2 is complete; or
(c) any dispute resolution procedure is complete;
whichever is the last to occur.
40.2 The Contractor shall have the right at any time to carry out audits of such books and
records and related documents referred to in Sub-clause 40.1 and to have such audits
carried out by an auditing firm appointed by the Contractor. Such audit shall commence
no later than three hundred and sixty five days after the date of the last Final Certificate.
It shall not extend to the make-up of any fixed or unit rate or price.
40.2 The Contractor, the Contract Manager, the Purchaser and/or the Project
Manager shall have the right at any time to carry out audits of such books and records
and related documents referred to in Sub-clause 40.1 and to have such audits carried out
by an auditing firm appointed by the Contractor. Such audit shall commence no later than
three hundred and sixty five days after the date of the last Final Certificate under the Main
Contract. It shall not extend to the make-up of any fixed or unit rate or price.
41. Payment
41.1 The Contractor shall pay the Subcontractor the Subcontract Price in instalments as
provided in Schedule 19 (Subcontract Price and payment).
The Contractor shall pay the Subcontractor the Subcontract Price in instalments as
provided in Schedule 19 (Subcontract Price and payment) provided that:
(a) if the Subcontractor does not provide, within 7 days of a request from the Contractor,
collateral warranties executed by the Subcontractor and/or the collateral warranties
executed by the Sub-subcontractor in such form and in favour of such parties as
requested by the Contractor, the Contractor shall be entitled to withhold payment from the
Subcontractor for each collateral warranty not provided;
(b) the task or Milestone Payment against each task or Milestone Event shall become due
only when the task or Milestone Event has been achieved in full or an agreed percentage
whether before or on the relevant task or Milestone Payment Date;
(c) a task or Milestone Payment against a task or Milestone Event may become
due in any order of achievement.
41.2 If any instalment is to be paid upon the completion of a specified task or milestone, the
Subcontractor shall only be entitled to apply for payment for that instalment when he can
provide evidence of completion of the task or milestone as stated in Schedule 19.
41.3 The Subcontractor shall submit a request for payment to the Contract Manager at
intervals of not less than one calendar month showing:
(a) the Subcontractor’s assessment of the amount to be paid for Subcontract
Works carried out up to the end of the period for which it is submitted, together
with any other scheduled payment as may have become payable;
plus
(b) the amounts to which the Subcontractor considers himself entitled in connection
with all other matters for which provision is made under the Subcontract;
less
(c) the total of all sums previously certified by the Contract Manager for payment.

The Subcontractor’s requests for payment shall be supported by all relevant docu-
mentary evidence appropriately itemised.
The Subcontractor’s final request for payment shall state that it is his final request for
payment.
41.3 The Subcontractor shall submit a request for payment to the Contract Manager five
Business Days before the end of each calendar month showing:
(a) the task or Milestone Events in respect of which the Subcontractor considers it is entitled
to payment, plus
(a) the amounts to which the Subcontractor considers himself entitled in connection with all
other matters for which provision is made under the Subcontract;
less
(b) the total of all sums previously certified by the Contract Manager for payment.
The Subcontractor's requests for payment shall be supported by all relevant documentary evidence
appropriately itemised.
The Subcontractor's final request for payment shall state that it is his final request for payment.
41.4 Within fourteen days of the receipt of an interim request for payment, or in the case of the
final request for payment within fifty-six days of its receipt, the Contract Manager shall
issue a certificate to the Subcontractor and the Contractor for the instalment to which
the request for payment relates. The certificate shall show the sum which the Contract
Manager considers to be due at the payment due date determined in accordance with
Sub-clause 41.5, and the basis on which it has been calculated. The total certified shall
comprise all sums listed in the Subcontractor’s statement which, in the opinion of the
Contract Manager, are properly payable under the Subcontract and shall show
separately any elements within the sums certified in respect of nominated Sub-
subcontractors. The Contract Manager may in any certificate delete, correct or modify
any sum previously certified by him as he shall consider proper.
41.4 Within [twenty one] days of the receipt of an interim request for payment, or in
the case of the final request for payment within [seventy] days of its receipt, the Contract
Manager shall issue a certificate to the Subcontractor and the Contractor for the
instalment to which the request for payment relates. The certificate shall show the sum
which the Contract Manager considers to be due at the payment due date determined in
accordance with Sub-clause 41.5, and the basis on which it has been calculated. The
total certified shall comprise all sums listed in the Subcontractor's statement which, in the
opinion of the Contract Manager, are properly payable under the Subcontract. The
Contract Manager may in any certificate delete, correct or modify any sum previously
certified by him as he shall consider proper.
41.5 Any sum certified and notified as due in accordance with Sub-clause 41.4 shall be due for
payment fourteen days (or fifty-six days in the case of the final request for payment) after
the date of receipt by the Contract Manager of the Subcontractor’s request for payment
in accordance with Sub-clause 41.3. The Contractor shall pay the amount so notified by a
date (the Final Date for Payment) which shall be thirty-five days (or seventy-seven days
in the case of the final request for payment) after the date of receipt by the Contract
Manager of the Subcontractor’s request for payment in accordance with Sub-clause
41.3.
41.5 Any sum certified and notified as due in accordance with Sub-clause 41.4 shall
be due for payment [twenty one] days (or fifty-six days in the case of the final request for
payment) after the date of receipt by the Contract Manager of the Subcontractor's request
for payment in accordance with Sub-clause 41.3. The Contractor shall pay the amount so
notified by a date (the “Final Date for Payment”) which shall be [forty] days (or seventy-
seven days in the case of the final request for payment) after the date of receipt by the
Contract Manager of the Subcontractor's request for payment in accordance with Sub-
clause 41.3.

41.6 If for any reason the Contractor, or the Contract Manager on his behalf, fails to notify
the sum due in accordance with Sub-clause 41.4 by the payment due date determined in
accordance with Sub-clause 41.5 the sum notified by the Subcontractor in his request for
payment in accordance with Sub-clause 41.3 shall be due for payment by the Final Date
for Payment.
41.7 If the Contractor intends to pay less than the sum due in accordance with Sub-clause
41.4 or 41.6 for any reason including any sum that may be due from the Subcontractor to
the Contractor under the Subcontract or any sum not payable in accordance with Sub-
clause 44.5, the Contractor shall notify the Subcontractor not later than one day before
the Final Date for Payment, specifying the amount he considers to be due on the date
the notice is given and the basis on which that sum is calculated.
41.7 Without prejudice to any other remedy which he may have, the Contractor shall
be entitled to deduct from any payment due to the Subcontractor any sums which are due
from the Subcontractor to the Contractor under the Subcontract. If the Contractor intends
to pay less than the sum due in accordance with Sub-clause 41.4 or 41.6 for any reason
including any sum that may be due from the Subcontractor to the Contractor under the
Subcontract or any sum not payable in accordance with Sub-clause 44.5, the Contractor
shall notify the Subcontractor not later than one day before the Final Date for Payment,
specifying the amount he considers to be due on the date the notice is given and the
basis on which that sum is calculated
41.8 If the Contractor does not make payment in full by the Final Date for Payment of the
amount of an instalment:
(a) in accordance with any notice issued under Sub-clause 41.7; or
(b) certified and notified in accordance with Sub-clause 41.4; or
(c) where applicable in accordance with Sub-clause 41.6;
or if either party does not make any payment due under any other provision of the
Subcontract by the Final Date for Payment the amount not paid shall bear interest
compounded daily from the Final Date for Payment until the amount not paid is received
by the other party at an annual rate which is two per cent above the Agreed Rate for the
first month of delay. The annual rate of interest shall be increased by a further two
percent at the end of each further month of delay, up to the end of the third month. If the
delay exceeds three months the annual rate of interest shall thereafter be ten per cent
above the Agreed Rate.
41.8 Subject to Sub-clauses 41.14 and 41.15, if the Contractor does not make payment in full
by the Final Date for Payment of the amount of an instalment:
or if either party does not make any payment due under any other provision of the
Subcontract by the Final Date for Payment the amount not paid shall bear interest
compounded daily from the Final Date for Payment until the amount not paid is received
by the other party at an annual rate which is two per cent above the Agreed Rate for the
first month of delay. The annual rate of interest shall be increased by a further two
percent at the end of each further month of delay, up to the end of the third month. If the
delay exceeds three months the annual rate of interest shall thereafter be eight per cent
above the Agreed Rate.
41.9 If the Contractor does not make payment in full by the Final Date for Payment of the
amount of an instalment:
the Subcontractor may issue a Notice to the Contractor informing him of the
Subcontractor’s intention to suspend performance of any or all of his obligations under
the Subcontract. If such failure shall continue for seven days after the issue of such

Notice, then at any time thereafter and provided such failure is still continuing, the
Subcontractor may suspend further performance of any or all as applicable of his
obligations under the Subcontract until payment is made.
The Contract Manager shall determine by means of a Variation Order an extension to
the Approved Programme and appropriate dates in Schedule 11 (Times of completion)
for the full period of suspension plus any reasonable additional time incurred by the
Subcontractor in resuming his obligations and those of his Subsubcontractors. If the
Subcontractor incurs additional Cost as a result of such suspension and subsequent
resumption he shall be entitled to an addition to the Subcontract Price determined in
accordance with and subject to Clause 19 (Claims).
41.9 Subject to Sub-clauses 41.14 and 41.15, if the Contractor does not make payment in full
by the Final Date for Payment of the amount of an instalment
the Subcontractor may issue a Notice to the Contractor informing him of the Subcontractor's
intention to suspend performance of any or all of his obligations under the Subcontract. If
such failure shall continue for seven days after the issue of such Notice, then at any time
thereafter and provided such failure is still continuing, the Subcontractor may suspend
further performance of any or all as applicable of his obligations under the Subcontract
until payment is made.
The Contract Manager shall determine by means of a Variation Order an extension to the
Approved Programme and appropriate dates in Schedule 11, Table 2 (Times of
completion) for the full period of suspension plus any reasonable additional time incurred
by the Subcontractor in resuming his obligations and those of his Sub-subcontractors. If
the Subcontractor incurs additional Cost as a result of such suspension and subsequent
resumption he shall be entitled to an addition to the Subcontract Price determined in
accordance with and subject to Clause 19 (Claims).
41.10 If the suspension of performance of any, but not all, of the Subcontractor’s obligations in
accordance with Sub-clause 41.9 continues for a period of sixty days the Subcontractor
at any time thereafter may with immediate effect issue a Notice to the Contractor and
copied to the Contract Manager that such obligation is excluded from the Subcontract.
Thereafter the Contract Manager shall by means of a Variation Order confirm the
exclusion together with the applicable deduction from the Subcontract Price.
If the suspension of performance of all of the Subcontractor’s obligations in accordance
with Sub-clause 41.9 continues for a period of sixty days the Subcontractor at any time
thereafter may with immediate effect terminate his employment under the Subcontract by
a Notice issued to the Contractor and copied to the Contract
Manager and thereupon the rights and obligations of the parties shall be as stated in
Clause 43 (Termination by the Contractor for convenience).
41.11 If the amount of a payment which is:

(a) notified in accordance with Sub-clause 41.4 (and no notice is given by the
Contractor under Sub-clause 41.7 in respect of such payment); or
(b) stated in a notice given by the Contractor under Sub-clause 41.7;
is referred to an adjudicator appointed in accordance with Clause 47 (Adjudication) and if
the decision of the adjudicator as to the amount which is to be paid by the Contractor is
that more shall be paid than the amount stated as in (a) or (b) as applic able, the
additional amount shall be paid not later than:
(i) seven days from the date of the adjudicator’s decision; or
(ii) the Final Date for Payment;
whichever is the later.

41.12 If as a result of any audit in accordance with Sub-clause 40.2 or otherwise an error is
discovered in the amount paid to the Subcontractor then such error shall be corrected in
the next payment due under the Subcontract.
If such error is discovered following the making of the last payment to be certified by the
Contract Manager, the finding of the error shall be notified by one party to the other
party as soon as possible. The amount to be paid to or from the Subcontractor shall, if
such notification is not challenged within twenty-eight days, become due for payment
twenty-eight days after the date of such notification with the Final Date for Payment
being forty-two days after the date of notification.
If such notification is challenged the parties shall attempt to agree any amount to be paid.
If not agreed within fifty-six days of the notification the Contract Manager shall determine
the amount to be paid. The amount to be paid shall be due fourteen days after the date of
agreement or determination, with the Final Date for Payment twenty-eight days after the
date of agreement or determination.
41.13 The Subcontract Price excludes Value Added Tax and to the extent that the tax is
properly chargeable, the Contractor shall pay such tax as an addition to payments
otherwise due to the Subcontractor.
41.14 If the Subcontractor becomes Insolvent (as defined in s113 of the Housing Grants, Construction and
Regeneration Act 1996 (as amended)) after the prescribed period, the Contractor shall not be required to pay
the Subcontractor the notified sum on or before the final date for payment.
41.15 If the Purchaser is Insolvent (as defined in s113 of the Housing Grants, Construction and Regeneration
Act 1996 (as amended)) the Contractor shall not be obliged to make any further payment to the Subcontractor of
any amount which is due or may become due to the Subcontractor unless the Contractor has received payment
in respect thereof from the Purchaser and then only to the extent of such receipt.
42. Suspension of the Subcontract Works

42.1 The Contract Manager may instruct the Subcontractor to suspend performance of all or
any part of the Subcontract Works for any reason whatsoever and the Subcontractor
shall comply with such instruction. The Contract Manager shall state in any such
instruction the reason for the suspension. On receipt of such an instruction, the
Subcontractor shall immediately advise the Contract Manager of any part of the
Subcontract Works which needs to be continued to maintain the safety and security of
the Subcontract Plant and/or the Subcontract Works.
42.2 The Contract Manager may subsequently instruct the Subcontractor to resume some or
all of the suspended Subcontract Works. Upon receipt of such an instruction the
Subcontractor shall resume such Subcontract Works as are ordered to be resumed as
soon as is reasonably practicable.
42.3 Any extension of the relevant dates or periods stated in Schedule 11 (Times of
completion) notified by the Contract Manager in accordance with Clause 14 (Delays)
shall take account of the additional time required by the Subcontractor in re-establishing
his activities and those of his Sub-subcontractors.
42.4 If the Subcontractor incurs any additional Cost as a consequence of complying with an
instruction to suspend any part of the Subcontract Works given by the Contract
Manager, other than an instruction given by reason of the Subcontractor’s default, he
shall be entitled to an addition to the Subcontract Price determined in accordance with
and subject to Clause 19 (Claims).
42.5 If the Subcontractor’s performance of any of the Subcontract Works is suspended for a
continuous period of ninety days, other than by reason of the Subcontractor’s default, at
any time thereafter and provided that such performance is still suspended, the
Subcontractor may issue a Notice to the Contractor and to the Contract Manager
requiring that the Contract Manager shall within fourteen days of such Notice either
issue an instruction to resume the suspended Subcontract Works, or issue a Variation
Order excluding that part of the Subcontract Works to which the instruction to suspend
applies. If the Contract Manager shall fail to do so then upon the expiry of such period of
notice the employment of the Subcontractor shall unless otherwise agreed be deemed to
have been terminated and thereupon the rights and obligations of the parties shall be as

stated in Clause 43 (Termination by the Contractor for convenience).
43. Termination by the Contractor for convenience

43.1 The Contractor may at any time issue a Notice (a ‘Notice of Termination’) to the
Subcontractor instructing the Subcontractor to cease the further carrying out of the
Subcontract Works for any reason whatsoever other than a reason to which Clause 44
(Termination for Subcontractor’s Default) applies.
43.2 The Subcontractor shall upon receipt of the Notice of Termination cease the carrying
out of the Subcontract Works, other than such work as the Contract Manager may
instruct. The Subcontractor shall upon completion of such work remove any
Subcontractor’s Equipment from the Site and withdraw from the Site leaving it in a safe
and tidy condition.
The Contract Manager shall issue a Take Over Certificate in respect of any part of the
Subcontract Plant for which a Take Over Certificate has not been issued, and shall if
the Subcontractor is required to carry out any further work prior to his withdrawal from
the Site or to provide any Subcontract Materials or Documentation applicable to the
Subcontract Plant issue any further Take Over Certificate as may be appropriate.
Thereafter Clauses 37 (Liability for Defects) and 38 (Final Certificate) shall apply.
43.3 As soon as practicable after receipt of the Notice of Termination, the Subcontractor
shall if so required by the Contractor:
(a) ensure that his Sub-subcontractors cease work in accordance with and subject
to Sub-clause 43.2 so far as is possible by the exercise by the Subcontractor of
such powers of termination, omission or cancellation as are available to him in the
relevant subcontracts; and/or
(b) to the extent permitted by the sub-subcontract, assign any sub-subcontract to the
Contractor or the Purchaser.
43.4 Upon receipt of the Notice of Termination or on such later date as may be specified in
the Notice of Termination, the Subcontractor shall transfer to the Contractor to the
extent desired by the Contractor all or any rights held by the Subcontractor relating to
Subcontract Materials, Subcontract Temporary Works and the Subcontract Plant
together with the obligations connected with them. The Subcontractor shall also deliver
to the Contractor all erection plans, schedules and Documentation and other data
prepared by the Subcontractor or Sub-subcontractors in connection with the
Subcontract Works and all Confidential Information and all other Documentation
supplied to the Subcontractor by or on behalf of the Contractor in connection with the
Subcontract Works.
43.5 Within ninety days 100 days of the Subcontractor’s withdrawal from the Site, or if the
Subcontractor has not entered the Site before receipt of the Notice of Termination
within ninety days of his receipt of the Notice of Termination, the Contract Manager
shall, subject to Sub-clause 43.7, issue to the Contractor and to the Subcontractor a
certificate (a Termination Certificate’) which shall state:
(a) the total amount (if any) due to the Subcontractor under the Subcontract for the
Subcontract Works carried out prior to the receipt by the Subcontractor of the
Notice of Termination;

(b)
any amount due to any third party in respect of which the Subcontractor has
(prior to the receipt by him of the Notice of Termination) properly and irrevocably
entered into a commitment relating directly to the Subcontract; and
(c) the amount of any other Cost properly incurred by the Subcontractor in
connection with the termination authorised by the Contract Manager, plus Profit
thereon;
calculated in accordance with the Subcontract.
The balance, if any, due to the Subcontractor shall be the sum of the amounts referred to
in (a), (b) and (c) less that amount already paid to the Subcontractor. If the amount
already paid to the Subcontractor exceeds the sum of (a), (b) and (c), the balance shall
become due from the Subcontractor to the Contractor.
Any disagreement arising under this Sub-clause 43.5 concerning the amounts payable to
the Subcontractor which is not settled in accordance with Clause 46 (Disputes) may be
referred to an Expert in accordance with Clause 48 (Reference to an Expert).
43.6 As soon as practicable, the Subcontractor and the Contractor shall provide the
Contract Manager with all such information and documents as he may reasonably
require for the purpose of issuing the Termination Certificate.
43.7 If by the expiry of the period specified in Sub-clause 43.5 it is not possible for the
Contract Manager to issue a Termination Certificate by reason of any matter which
prevents the determination of the amounts referred to in Sub-clause 43.5, the Contract
Manager shall, at the expiration of such period, issue a provisional Termination
Certificate which shall contain the best estimate that can be made of any amounts
referred to in Sub-clause 43.5 and of the resultant balance due. As soon thereafter as the
determination of the amounts referred to in Sub-clause 43.5 becomes practicable, the
Contract Manager shall issue a final Termination Certificate which shall operate as a
correction or adjustment of the provisional Termination Certificate.
If in the Contract Manager’s opinion it is appropriate to do so, he may issue more than
one provisional Termination Certificate prior to the issue of the final Termination
Certificate.
Payment of the balance due under any Termination Certificate shall be made between
the Contractor and the Subcontractor in accordance with any provisional or final
Termination Certificate and Clause 41 (Payment) shall apply as appropriate.
Contract Manager with all such information and documents as he may reasonably require
for the purpose of issuing the Termination Certificate.
43.8 Nothing in this Clause 43 shall affect the continuing operation of Sub-clauses 9.6, 9.7 and
9.8 and Clauses 8 (Patent and other protected rights), 20 (Confidentiality), 45 (Limitations
on liabilities and remedies), 46 (Disputes), 47 (Adjudication), 48 (Reference to an Expert),
49 (Arbitration) and 50 (Related issues under the Main Contract) and, to the extent that
the Subcontractor has carried out the Subcontract Works, Clauses 30 (Care of the
Subcontract Works), 31 (Insurance) and 37 (Liability for Defects).
44. Termination for Subcontractor's default

44.1 If the Subcontractor goes into liquidation (other than a voluntary liquidation for the
purposes of reconstruction or amalgamation) or has an administration order made against
him or carries on his business or any part of it under an administrator or receiver or
manager for the benefit of his creditors or any of them, without prejudice to any other
rights or remedies, the Contractor may forthwith issue a Notice terminating the
employment of the Subcontractor under the Subcontract.
44.1 If:
(a) the Subcontractor or any of its Affiliates goes into liquidation (other than a voluntary
liquidation for the purposes of reconstruction or amalgamation) ceases to carry on
business or an arrangement or composition with or for the benefit of creditors is entered
into by or in relation to either the Subcontractor or any of its Affiliates or a petition is

presented or a resolution is passed or an order is made for the administration or winding-
up, bankruptcy or dissolution of the Subcontractor or any of its Affiliates in accordance
with applicable Legislation; or
(b) the Contractor is so entitled by an express term of the Subcontract; or
(c) the Subcontractor assigns the Contract or sub-lets the whole of the Works without the
consent of the Purchaser; or
(d) the Subcontractor has failed to pay or allow any Liquidated Damages due in accordance
with the Subcontract within 20 Business Days of receipt of the Contractor's written notice
confirming that the same have become due and payable; or
(e) a cap stated in sub-Clause 45.2 has been exceeded; or
(f) Not Used
(g) breach of the Subcontractor's obligations directly causes the termination of the Lease
and/or Environment Permit; or
(h) the Subcontract Works have failed to pass the Take Over Tests by the Longstop Take
Over Date;
then, without prejudice to any other rights or remedies accrued under the Subcontract,
the Contractor may forthwith by notice terminate the employment of the Subcontractor
under the Subcontract
44.2 If the Subcontractor is in default in that he:

(a) without reasonable cause wholly suspends or abandons the carrying out of the
Subcontract Works before their completion; or
(b) fails to proceed regularly and diligently with the Subcontract Works; or
(c) commits any other material breach of the Subcontract;
then, without prejudice to any other rights or remedies which the Contractor may
possess, the Contractor may issue a Notice to the Subcontractor of such default.

If the Subcontractor fails to commence the rectification of the default within a period of
fourteen days after receipt of such Notice, and/or thereafter fails diligently to pursue the
rectification of such default, the Contractor may within fifty-six days of such Notice issue
a further Notice terminating the employment of the Subcontractor under the
Subcontract.
The Contractor may at any time give to the Subcontractor a second or subsequent
Notice of the same default.
44.2 If the Subcontractor is in default in that he:
(a) without reasonable cause wholly suspends or abandons or threatens to suspend or

abandon the carrying out of the Subcontract Works before their completion; or
(b) fails to proceed regularly and diligently with the Subcontract Works; or
(c) any of his Sub-subcontractors commits an act of fraud, misrepresentation, or falsification

in relation to performance of this Subcontract by or on behalf of the Subcontractor; or
(d) any of his Sub-subcontractors in breach of the Bribery Act 2010 or fails to comply with a
reasonable instruction from the Contractor in relation to any suspected breach the Bribery
Act 2010; or
(e) commits any other material breach of the Subcontract,
then, without prejudice to any other rights or remedies which the Contractor may possess, the
Contractor may issue a Notice to the Subcontractor of such default.
If the Subcontractor fails to commence the rectification of the default within a period of fourteen
days after receipt of such Notice, and thereafter fails diligently to pursue the rectification
of such default, the Contractor may terminate the employment of the Subcontractor under
the Subcontract.
The Contractor may at any time give to the Subcontractor a second or subsequent Notice
of the same default without reasonable cause he wholly suspends or abandons (or
threatens to suspend or abandon) the carrying out of the Subcontract Works before their
completion.
44.3 Upon termination of the Subcontractor’s employment under Sub-clause 44.1 or 44.2:
(a) except as the Contract Manager may direct or permit, the Subcontractor shall
forthwith leave the Site and shall have no right to re-enter the Site or to undertake
any work, including the rectification of any Defect or to remove any
Subcontractor’s Equipment, Subcontract Temporary Works or Subcontract
Materials;
(b) the Contractor may himself or through others complete the Subcontract
Works and he or they may enter upon the Site and use the
Subcontractor’s Equipment, Subcontract Temporary Works and
Subcontract Materials and the Contractor shall not be liable to the
Subcontractor for any fair wear or tear or accidental damage that may
occur to the Subcontractor’s Equipment, Subcontract Temporary Works
or Subcontract Materials;
(c) the Subcontractor shall deliver promptly to the Contractor all erection plans,
schedules and Documentation and other data prepared by the Subcontractor or
Sub-subcontractors in connection with the Subcontract Works and all
Confidential Information and all other Documentation supplied to the
Subcontractor by or on behalf of the Contractor in connection with the
Subcontract Works; and
(d) the Subcontractor shall, if so required by the Contractor and to the extent

permitted by the sub-subcontract, assign any sub-subcontract to the Contractor
or the Purchaser.
44.3 Upon termination of the Subcontractor's employment under Sub-clause 44.1 or

44.2:
(a) except as the Contract Manager may direct or permit, the Subcontractor shall
forthwith leave the Site and shall have no right to re-enter the Site or to undertake
any work, including the rectification of any Defect (Subcontractor Default) or to
remove any Subcontractor's Equipment, Subcontract Temporary Works or
Subcontract Materials;
(b) the Contractor may himself or through others complete the Subcontract Works to
a standard necessary to pass the Performance Tests and he or they may enter
upon the Site and use the Subcontractor's Equipment, Subcontract Temporary
Works and Subcontract Materials and the Contractor shall not be liable to the
Subcontractor for any fair wear or tear or accidental damage that may occur to the
Subcontractor's Equipment, Subcontract Temporary Works or Subcontract
Materials;
(c) the Subcontractor shall deliver promptly to the Contractor all erection plans,
schedules and Documentation and other data prepared by the Subcontractor or
Sub-subcontractors in connection with the Subcontract Works and all Confidential
Information and all other Documentation supplied to the Subcontractor by or on
behalf of the Contractor in connection with the Subcontract Works; and
(d)the Subcontractor shall, if so required by the Contractor and to the extent

permitted by the sub-subcontract, assign any sub-subcontract to the Contractor or
the Purchaser.
44.4 If any item of Subcontractor’s Equipment, Subcontract Temporary Works or of

Subcontract Materials which has not become the property of the Contractor or
Purchaser or any other thing is used for the completion of the Subcontract Works in
accordance with Sub-clause 44.3(a), when that item or thing is no longer required for the
purposes of the Subcontract Works:
(a) the Contractor shall notify the Subcontractor of the availability of such item or
thing and shall make such item or thing available for the Subcontractor to collect
and remove immediately and the Subcontractor shall so collect and remove such
item or thing within fourteen days of such notification;
(b) if the Subcontractor does not collect and remove the item or thing within a period
of fourteen days of its being made available in accordance with paragraph (a)
above, the Subcontractor shall be deemed to have consented irrevocably to the
disposal of the item or thing by the Contractor and the Contractor may thereafter
dispose of that item or thing as he in his absolute discretion sees fit and any
proceeds (less the cost of such disposal) shall be paid to the Subcontractor. The
Subcontractor shall be liable to pay to the Contractor those costs of disposal not
recovered by the Contractor from any proceeds. The Contract Manager shall
certify the amounts payable to or by the Subcontractor in accordance with this
Sub-clause 44.4 and Clause 41 (Payment) shall apply as appropriate save that
the Final Date for Payment shall be fourteen days after the issue of the Contract
Manager’s certificate.
Any money payable under this Sub-clause 44.4 shall not form part of the Subcontract
Price.
44.5 Upon the termination of the Subcontractor’s employment under this Clause 44 the
Contractor shall have no obligation to make any further payment, whether or not such
payment shall have been certified by the Contract Manager prior to termination, other
than as may be certified in accordance with Sub-clause 44.6,44.7 or 44.9.
The Contractor shall issue any necessary notice under Sub-clause 41.7.
44.6 Within ninety days of the completion of the Subcontract Works in accordance with Sub-
clause 44.3 (b) (including all testing and remedying of Defects, such that the total cost to
be incurred by the Contractor has been incurred) the Contract Manager shall, subject to
Sub-clause 44.9, issue to the Contractor and the Subcontractor a certificate (a ‘Default
Certificate’) which shall give a full statement of account including:

(a) all sums due to the Contractor from the Subcontractor including any cost
incurred by the Contractor in completing the Subcontract Works in accordance
with Sub-clause 44.3(b) which is in addition to that which the Contractor would
have incurred if the Subcontractor had completed the Subcontract Works in
accordance with the Subcontract; and
(b) all sums due to the Subcontractor in respect of work completed by the
Subcontractor prior to the termination of his employment other than any such
work of a temporary nature necessitated by such termination.
Having allowed for all previous payments made to the Subcontractor and any sum due to
the Contractor from the Subcontractor, the Default Certificate shall state the balance
due to or from the Subcontractor.
44.7 If within sixty days of the date of the termination of the Subcontractor’s employment the
Contractor has not taken steps to complete the Subcontract Works and the
Subcontract Plant in accordance with Sub-clause 44.3, the Default Certificate shall be
issued by the Contract Manager to the Contractor and the Subcontractor
within ninety days of such date of the termination. The Default Certificate shall state the
total amount (if any) due to the Subcontractor under the Subcontract for the
Subcontract Works carried out prior to the termination of the Subcontractor’s
employment less the amount of any additional cost properly incurred by the Contractor
for any necessary work authorised by the Contract Manager in connection with the
termination.
the Contractor from the Subcontractor, the Default Certificate shall state the balance
due to or from the Subcontractor.
If within sixty days of the date of the termination of the Subcontractor's employment the
Contractor has not taken steps to complete the Subcontract Works and the Subcontract
Plant in accordance with Sub-clause 44.3, the Default Certificate shall be issued by the
Contract Manager to the Contractor and the Subcontractor within ninety days of such
date of the termination. The Default Certificate shall state the total amount (if any) due to
the Subcontractor under the Subcontract for the Subcontract Works carried out prior to
the termination of the Subcontractor's employment less the amount of any additional cost
properly incurred by the Contrac¬tor for any necessary work authorised by the Contract
Manager in connection with the termination.
the Contractor from the Subcontractor, the Default Certificate shall state the balance due
to or from the Subcontractor.
Contract Manager with all such information and documents as he may reasonably
require for the purpose of issuing the Default Certificate.
44.9 If by the expiry of the period specified in Sub-clause 44.6 or 44.7 it is not possible for the
Contract Manager to issue a Default Certificate by reason of any matter which prevents
the determination of the amounts referred to in Sub-clause 44.6 or 44.7, the Contract
Manager shall, at the expiration of such period, issue a provisional Default Certificate
which shall contain the best estimate that can be made of any amounts referred to in
Sub-clause 44.6 or 44.7 and of the resultant balance due. As soon thereafter as the
determination of the amounts referred to in Sub-clause 44.6 or 44.7 becomes practicable,
the Contract Manager shall issue a final Default Certificate which shall operate as a
correction or adjustment of the provisional Default Certificate.
If in the Contract Manager’s opinion it is appropriate to do so, he may issue more than
one provisional Default Certificate prior to the issue of the final Default Certificate.
44.10 Any disagreement arising under this Clause 44 concerning the amounts payable by or to
the Subcontractor which is not settled in accordance with the provisions of Clause 46
(Disputes) may be referred to an Expert in accordance with Clause 48 (Reference to an
Expert).
44.11 Payment of the balance due under any Default Certificate shall be made between the
Contractor and the Subcontractor in accordance with any provisional or final Default
Certificate and Clause 41 (Payment) shall apply as appropriate.

44.12 If the issue by the Contractor of any Notice terminating or purporting to terminate the
employment of the Subcontractor under this Clause 44 is subsequently determined to
have been invalid, such Notice shall not constitute a repudiation of the Subcontract by
the Contractor but shall be deemed to have been a Notice of Termination issued in
accordance with Sub-clause 43.1, and thereupon the rights and obligations of the parties
shall be as stated in Clause 43 (Termination by the Contractor for convenience) and not
as stated in this Clause 44.
44.13 Nothing in this Clause 44 shall affect the continuing operation of Sub-clauses 9.6, 9.7 and
9.8 and Clauses 8 (Patent and other protected rights), 20 (Confidentiality), 45 (Limitations
on liabilities and remedies), 46 (Disputes), 47 (Adjudication), 48 (Reference to an Expert),
49 (Arbitration) and 50 (Related issues under the Main Contract) and, to the extent that
the Subcontractor has carried out the Subcontract Works, Clauses 30 (Care of the
Subcontract Works), 31 (Insurance) and 37 (Liability for Defects).
45. Limitations on liabilities and remedies

45.1 Notwithstanding any other provision of the Subcontract neither the Subcontractor nor
the Contractor shall be liable to the other for:
(a) wastage, loss or contamination during its use in the Subcontract Plant of any
process consumable which shall be deemed to include feedstocks, chemicals,
biochemicals, catalysts and utilities; and
(b) loss or deferment of anticipated or actual profit, loss of revenue, loss of use, loss
of production, business interruption or any similar damage or for any
consequential or indirect losses of any kind resulting from or arising out of or in
connection with the Subcontract Works or the performance of them or any act or
omission relating to them however caused;
except in respect of:
(i) recoveries obtained as a result of the insurance provided under Clause 31
(Insurance); or
(ii) any sum included within the liquidated damages for delay under Sub-clause 15.1;
or
(iii) any sum included within the liquidated damages for failure to pass performance
tests under Sub-clause 35.12; or
(iv) any Profit that the Subcontractor is entitled to; or
(v) any such losses suffered by a third party (excluding any Affiliate of the
Contractor or the Subcontractor) to the extent included in any award for
damages to or settlement with the third party in connection with a claim covered
by the indemnities under Sub-clauses 8.3, 8.5, 26.7 and 30.15.
(i) recoveries obtained as a result of the insurance provided under Clause 31

(Insurance) (other than any insurance under Sub-clause 31.6); or
(ii) any sum included within the Delay Liquidated Damages for delay under Sub-
clause 15.1; or
(iii) any sum included within the Performance Liquidated Damages for failure to pass
Performance Tests under Sub-clause 35.12; or
(iv) any Profit that the Subcontractor is entitled to; or
(v) the Subcontractor’s liability under any indemnity in this agreement and/or under
Sub-clauses 3.11, 3.14, 3.15 and/or 5.5; or
(vi) any sums payable under Sub-clauses 37.8, 37.9, or 44.6; or
(vii) any such losses suffered by a third party (excluding any Affiliate of
the Contractor or the Subcontractor) to the extent included in any award for
damages to or settlement with the third party in connection with a claim covered
by the indemnities under Sub-clauses 8.3, 8.5, 26.7 and 30.

45.2 Except in the case of termination of the Subcontractor’s employment under Clause 44
(Termination for Subcontractor’s default) or a repudiation of the Subcontract by either
party, the liability of either party to the other arising out of or in connection with the
Subcontract or the Subcontract Works, whether by reason of any breach of contract or
of statutory duty or tortious or negligent act or omission shall be limited to the damages,
remedies and reimbursements expressly provided in the Subcontract. Nothing in the
Subcontract shall in any way be interpreted as affecting or limiting any liability which the
Subcontractor may have under the Consumer Protection Act 1987 or in respect of
personal injury or death caused by the negligence of the Subcontractor (as defined in
Section 1 of the Unfair Contract Terms Act 1977).
45.2 Save as set out at Sub-clause 45.3 below and excluding Sub-clause 45.2(a), in no
circumstances whatsoever shall the aggregate liability of the Subcontractor to the
Contractor under or for breach of this Subcontract or otherwise in relation to the
Subcontract Works or in tort (whether or not involving negligence) or for breach of
statutory duty exceed the sum stated in the Subcontract Agreement, if any.
Caps for Liquidated Damages in relation to:
(a) the Subcontractor's liability for Delay Liquidated Damages pursuant to Clause 15 shall be
limited to a sum equal to [10%] of the Contract Price;
(b) the Subcontractor's liability for Performance Liquidated Damages pursuant to Sub-clause
35.12 shall be limited to a sum equal to:
i) [10%] of the Subcontract Price for Capacity Liquidated Damages;
ii) [10%] of the Subcontract Price for Availability Liquidated Damages;
(c) and the Subcontractor's combined liability for Performance Liquidated Damages, shall be
limited to a sum equal to [15%] of the Contract Price.
The parties agree that Performance Liquidated Damages and Availability Liquidated
Damages shall count towards the aggregate liability cap but Delay Liquidated Damages
shall not count towards the aggregate liability cap.
45.3 The total aggregate liability of the Subcontractor to the Contractor arising out of or in
connection with the Subcontract and the Subcontract Works, other than liability arising
under Sub-clause 8.3 and 26.7 and Clauses 30 (Care of the Subcontract Works) and 31
(Insurance), shall not exceed the amount stated in the Subcontract Agreement.
For the purposes of this Sub-clause 45.3 any deduction from or abatement of the
Subcontract Price to which the Contractor may become entitled as a result of:
(a) a Defect; or
(b) any other failure of the Subcontractor to comply with the terms of the
Subcontract;
shall be deemed to be a liability of the Subcontractor to the Contractor.
The Subcontractor does not exclude or restrict its liability for any of the following and no
liability for the same shall be taken into account in determining whether any of the
limits of liability set out at in this Clause 45 have been reached or exceeded:
(a) payments made by the Subcontractor to the extent that the Subcontractor is
entitled to receive corresponding payments pursuant to the terms of any of the
insurance policies required to be effected and maintained in accordance with
Clause 31 (or would have been so entitled but for any breach of the
Subcontractor's obligations under the Subcontract);
(b) the Subcontractor's liability in the event of any abandonment of the Works, wilful
default, fraud, fraudulent misrepresentation or corruption on the part of the
Subontractor or any Affiliate;
(c) the Subcontractor’s liability for death or personal injury; or
(d) the Subcontractor’s liability under any indemnity in this Subcontract and/or under
Sub-clauses 3.11, 3.14, 3.15, 5.5 and/or 30.

For the purposes of this Sub-clause 45.3 any deduction from or abatement of the
Subcontract Price to which the Contractor may become entitled as a result of:
(a) a Defect (Subcontractor Fault); or

(b) any other failure of the Subcontractor to comply with the terms of this Subcontract
shall be deemed to be a liability of the Subcontractor to the Contractor.
45.4 Sub-clauses 45.1 and 45.3 shall apply whether or not either party shall be held to have
repudiated the Subcontract.
45.5 Any exclusion or limitation of liability under the Subcontract shall as between the parties
exclude or limit such liability in contract, tort/delict including negligence or otherwise.
46. Disputes
46.1 The Contractor and the Subcontractor shall endeavour to avoid the escalation of
problems into disputes as defined in Sub-clause 46.4 and to avoid disputes both between
themselves and with third parties including Sub-subcontractors. The parties
acknowledge and agree that this shall not prejudice any right either party may have under
Clause 47 to refer any dispute or difference to adjudication at any time, if that party so
wishes, notwithstanding the definition of ‘dispute’ in Sub-clause 46.4.
46.2 In order to avoid the development of disputes and to facilitate their clear definition and
early resolution, the procedures set out in Clauses 46 (Disputes), 47 (Adjudication), 48
(Reference to an Expert) and 49 (Arbitration) shall be applied as appropriate.
46.3 If the Subcontractor is dissatisfied with any Decision or valuation of the Contract
Manager, or of any person to whom the Contract Manager may have delegated any of
his authority or responsibility, or if the Contractor or the Subcontractor is dissatisfied
with any other matter arising under or in connection with the Subcontract, either party
may at any time refer such dissatisfaction to the Contract Manager giving full details of
the nature of the matter. The Contract Manager shall give a Decision on the matter
(giving the reasons for such Decision) to the Contractor and the Subcontractor within
twenty-eight days of such reference to him.
46.4 The Contractor and the Subcontractor agree that no matter shall constitute or give rise
to a dispute unless it has been referred to the Contract Manager under Subclause 46.3
and:
(a) the Contract Manager has failed to give his Decision on the matter within the
prescribed time; or
(b) a Decision given within the prescribed time is either unacceptable to the
Contractor and/or the Subcontractor or has not been implemented within twenty-
one days of the Decision;
and, as a consequence, either the Contractor or the Subcontractor has issued to the
other a Notice (a ‘Notice of Dispute’) setting out the nature of the dispute with a copy to
the Contract Manager. For the purposes of the performance of the Subcontract Works
and all matters arising out of or in connection with the Subcontract, the word ‘dispute’
shall be construed in accordance with this Subclause 46.4.
46.5 Notwithstanding the existence of any dispute or any reference to the Contract Manager
under Sub-clause 46.3, the Contractor and the Subcontractor shall continue to perform
their obligations under the Subcontract.
46.6 The parties shall attempt in good faith to negotiate a settlement of any dispute or
difference.
46.7 If a dispute cannot be resolved by negotiation the parties may by agreement refer it to
mediation in accordance with the procedures of the Centre for Effective Dispute
Resolution (CEDR), the Chartered Institute of Arbitrators (ClArb) or some other appro -
priate body.
46.8 No Decision, opinion, direction, or valuation given by the Contract Manager shall
disqualify him from being called as a witness and giving evidence before any third party,
an Expert, adjudicator or arbitrator on any matter whatsoever relating to a dispute.

47. Adjudication
47.1 This Clause 47 shall only apply to disputes arising under a construction contract as
defined in the Housing Grants, Construction and Regeneration Act 1996, or any
amendment or re-enactment thereof.
47.2 Notwithstanding any provision in the Subcontract for a dispute to be referred to an

Expert in accordance with Clause 48 (Reference to an Expert) or to arbitration in
accordance with Clause 49 (Arbitration), either party shall have the right to refer any
dispute or difference (including any matter not referred to the Contract Manager in
accordance with Sub-clause 46.3) as to a matter under or in connection with the
Subcontract to adjudication and either party may, at any time, issue a Notice (a ‘Notice
of Adjudication’) to the other stating his intention to do so. The ensuing adjudication shall
be conducted in accordance with the edition of the Adjudication Rules’ published by
IChemE current at the time of service of the Notice of Adjudication.
47.2 Notwithstanding any provision in the Subcontract for a dispute to be referred to

an Expert in accordance with Clause 48 (Reference to an Expert) or to arbitration in
accordance with Clause 49 (Arbitration), either party shall have the right to refer any
dispute or difference (including any matter not referred to the Contract Manager in
accordance with Sub-clause 46.3) as to a matter under or in connection with the
Subcontract to adjudication and either party may, at any time, issue a Notice (a 'Notice of
Adjudication') to the other stating his intention to do so. The ensuing adjudication shall be
conducted in accordance with the edition of the 'Adjudication Rules' published by IChemE
current at the time of service of the Notice of Adjudication. This clause shall not apply to a
dispute referred to at clause 48.11, unless the operation of clause 48.11 would be
contrary to the requirements of the Housing Grants, Construction and Regeneration Act
1996 (or any amendment or re-enactment thereof).
47.3 Unless the adjudicator has already been appointed, he is to be appointed to a timeta ble
with the object of securing his appointment and referral of the dispute to him within seven
days of the service of the Notice of Adjudication. The adjudicator shall be appointed in
accordance with the Adjudication Rules.
47.4 The adjudicator shall reach his decision within twenty-eight days of referral or such other
longer period as may be agreed between the parties after the dispute has been referred.
47.5 The adjudicator may extend the period of twenty-eight days by up to fourteen days with
the consent of the party by whom the dispute was referred.
47.6 The adjudicator shall act impartially.
47.7 The adjudicator may take the initiative in ascertaining the facts and the law.
47.8 The decision of the adjudicator shall be binding until the dispute is finally determined by
legal proceedings, by arbitration or by agreement.
47.9 The adjudicator may correct his decision so as to remove a clerical or typographical error
arising by accident or omission.
47.10 The adjudicator may include in his decision a direction as to the allocation of his fees and
expenses as between the parties.
47.11 The adjudicator shall not be liable for anything done or omitted in the discharge or
purported discharge of his functions as adjudicator unless the act or omission is in bad
faith. Furthermore, any personnel of the adjudicator acting in connection with the carrying
out of the adjudication shall be similarly protected from liability.
48. Reference to an Expert

48.1 Subject to the provisions of Clause 46 (Disputes), any dispute which in accordance with
the Subcontract is a matter which may be referred to an Expert in accordance with this
Clause 48 shall be so referred upon one party issuing a Notice thereof to the other.
Furthermore, if the parties so agree any other dispute arising out of or in connection with
the Subcontract may be referred to an Expert.

Any such reference shall be conducted in accordance with the edition of the ‘Rules for
Expert Determination’ published by IChemE current at the time of the Expert’s
appointment unless the parties otherwise agree prior to the appointment of the Expert.
The Expert shall be appointed in accordance with the Rules for Expert Determination.
48.2 The Expert shall decide all disputes referred to him as an expert and not as an arbitrator.
Any decision of the Expert may revise or overrule any Decision of the
Contract Manager other than any decision expressly stated in the Subcontract to be
final, conclusive and binding.
48.3 The powers of the Expert to decide disputes shall include decisions as to factual issues
and the interpretation of the Subcontract.
48.4 The Contractor and the Subcontractor shall give the Expert every assistance in deciding
any dispute referred to him and shall give him access to the Site and to their premises
and shall provide him with any information and Documentation that he may reasonably
require.
48.5 The Expert shall have power by his decision to fix the reasonable amount of his fees in
connection therewith and they shall be borne in equal shares between the Contractor
and the Subcontractor.
48.6 If the Subcontractor has complied with any Decision of the Contract Manager
which is overruled by the Expert, and has thereby suffered or incurred any loss or
additional expense in the performance of the Subcontract, then provided that the
Subcontractor has notified the Contract Manager that he disputes such Decision before
complying with it, the Expert may in his discretion award the Subcontractor a reasonable
sum in respect of such loss or additional expense, notwithstanding that the overruling of
the Decision would not otherwise entitle the Subcontractor to any additional payment
48.7 The Contractor and the Subcontractor hereby agree to be bound by any decision of the
Expert under this Clause 48, which decision shall be final, conclusive and binding, and
shall comply with any direction given therein and shall not question the correctness of any
such decision or direction in any proceedings.
48.8 Neither the Contractor nor the Subcontractor shall be entitled to suspend performance
of the Subcontract by reason of the reference of a dispute to an Expert.
48.9 Any dispute which is referred to an Expert ceases to be referable to arbitration under
Clause 49 (Arbitration).
48.10 A limitation period on actions in litigation or arbitration which applies to the Subcontract
under the applicable law shall apply also to the issue of a Notice to refer a dispute to an
Expert in accordance with Sub-clause 48.1.
48.11 If
1. the Subcontractor disputes a notification from the Contractor

under Sub-clause 37 that a Defect is a Defect (Sub-contractor Fault); or
2. the Boiler Supplier, Feedstock Supplier and/or Operator
disputes a notification under their respective contracts with the
Purchaser that it is responsible for a Defect (Other) or that the
works or services which it has carried out under its contract are
defective in any way,then the Contractor may elect to join the
Subcontractor to a multi-party dispute with the Purchaser, the
Boiler Supplier, Feedstock Supplier and/or Operator (as
applicable) and the Subcontractor hereby consents to such
joinder. In relation to any such dispute arising out of or in
connection with limb (1) and/or limb (2) above, the Parties
agree to submit the dispute to ad hoc expert proceedings. If the
relevant parties to such dispute have not agreed the identity of

the expert prior to or within 7 working days from the date of
notification of the dispute, the Contractor and/or the Purchaser
may ask the Chief Executive for the time being of the Institute
of Waste Management (or any successor body) to name a
person who has at least five years' technical experience of
waste thermal treatment facilities and has no history of
consultancy or employment with any party to the dispute, and
the Subcontractor shall accept such appointment. Any such
dispute shall be conducted in accordance with the rules
determined by the expert at the time and the Contractor shall
ensure that his appointment requires him to reach a decision
within 28 days (or any other period agreed between the parties
to the dispute).
48.12 The Subcontractor agrees that if any party to the expert proceedings wishes to dispute
the decision of the expert, it may refer the matter to arbitration under clause 49.
49. Arbitration
49.1 Any dispute, other than failure to give effect to a decision of an adjudicator given under
Clause 47 (Adjudication) or of an Expert given under Clause 48 (Reference to an Expert),
which has not been referred to an Expert in accordance with Clause 48 shall be referred
to a single arbitrator by one party serving a Notice (a ‘Notice of Arbitration’) on the
other.
49.2 The arbitration shall be conducted in accordance with the procedure set out in the edition
of the ‘Arbitration Rules’ published by IChemE current at the time of the appointment of
the arbitrator. The arbitrator shall be appointed in accordance with the Arbitration Rules.
49.3 The arbitrator shall have full power to open up, review, revise or overrule any Decision of
the Contract Manager, other than any Decision expressly stated in the Subcontract to
be final, conclusive and binding.
Neither party shall be limited in arbitration to the evidence or arguments put to the
Contract Manager or to an adjudicator in accordance with Sub-clause 46.3 and Clause
47 respectively.
49.4 The Contractor and the Subcontractor agree to be bound by any decision, award or
ruling of an arbitrator under this Clause 49 and shall comply therewith. The Contractor
and the Subcontractor hereby agree to exclude any right to appeal to the Court under
the Arbitration Act 1996.
49.5 If the Subcontractor has complied with any Decision of the Contract Manager
which is overruled by the arbitrator, and has thereby suffered or incurred any loss or
additional expense in the performance of the Subcontract, then provided that the
Subcontractor has notified the Contract Manager that he disputes such Decision before
complying with it, the arbitrator may in his discretion award the Subcontractor a
reasonable sum in respect of such loss or additional expense, notwithstanding that the
overruling of the Decision would not otherwise entitle the Subcontractor to any additional
payment under the Subcontract.
49.6 Neither the Contractor nor the Subcontractor shall be entitled to suspend performance of
the Subcontract by reason of the reference of a dispute to arbitration.
49.7 The Parties agree that any dispute under the Main Contract which, in
whole or in part, is also a dispute under this Subcontract may be joined
with the dispute under the Subcontract and vice-versa for the purposes
of resolution under Clause 49

50. Related issues under the Main Contract
50.1 The Subcontractor shall co-operate with and assist the Contractor to such extent as is
reasonable in the preparation and submission of information in support of claims under
the Main Contract when such claims touch or concern matters under the Subcontract.
50.2 In the event that any dispute arising between the Contractor and the Subcontractor
which is referable to arbitration is substantially the same as a dispute arising or which has
arisen between the Contractor and the Purchaser (and/or the Project Manager) and
which is also referable to arbitration under the Main Contract, then, subject to an
arbitrator not having been appointed under the Subcontract, the Contractor shall be
entitled to require the Subcontractor to be joined as a party to such reference and such
Subcontract dispute shall be referred to the arbitral tribunal appointed or to be appointed
pursuant to the provisions of the Main Contract.

Guidance on compiling the Subcontract Agreement, its Annex,
the Subcontract Specification and the Schedules
The purpose of this section is to provide an aide-memoire to help • In Paragraph 14: the amount (expressed as a percentage) of
users of this handbook to prepare a complete set of documentation Profit to be added to any Cost - a value which will normally
to accompany the Conditions of Subcontract. As mentioned in the be part of the Subcontractor’s tender;
Introduction, more extensive guidance is given in the Red, Green • In Paragraph 15: the names and/or positions of appropriate
and Burgundy Books. These should be referred to as appropriate. senior personnel, their addresses and fax numbers for the
Like the Red Book, but not the Green and Burgundy Books, the receipt of formal Notices - see the guidance below;
Yellow Book is drafted as a price-based contract. • In Paragraph 17: the seat of any arbitration that might arise
It is not intended to give a comprehensive or definitive from the Subcontract; and
statement of the commercial or legal position, nor does this • In Paragraph 18: the Identification Number for all documents
section form part of the General Conditions or of any contract. referring to the Subcontract.
The date for the commencement of the Subcontract Works is
needed in Paragraph 9 because it could be earlier or later than the
The Subcontract Agreement date of the Subcontract Agreement, and is relevant to the periods
for completion in Schedule 11 (Times of completion). It may also be
Examination of the Subcontract Agreement will underline the required for any Special Condition which is included in the
importance of using this document in preference to other forms Subcontract.
such as a purchase order if the Subcontract is to read as a The requirement to give the name or position, address and fax
consistent whole, if only because several of the key terms in the number of senior personnel of each of the Contractor and
General Conditions are defined in Clause 1 (Definitions, inter- Subcontractor is to facilitate the issuing of formal Notices in
pretation, waiver and Notices) by reference to the Subcontract accordance with Sub-clause 1.8 of the General Conditions. While
Agreement. Users should be particularly careful to note Paragraph day-to-day communications under the Contract are to be between
2 of the Subcontract Agreement, and to ensure that the Subcontract the Contract Manager and the Subcontract Manager (see Sub-
Specification and all the relevant Schedules conform to the wording clause 11.7 of the General Conditions), it is recognised that certain
of Paragraph 1 of the Subcontract Agreement and have been communications should be directly between the parties at a senior
signed. The Subcontract Agreement includes at Paragraph 2 an level - e.g. CEO, Director or Company Secretary. It may be more
entire agreement clause. For administrative reasons some appropriate to state the position of the person (e.g. CEO) rather
companies issue a Purchase Order for all subcontracts. Care must than his/her name. There are many references in the General
be taken to ensure that any terms or conditions printed on the back Conditions to one party notifying the other (e.g. Sub-clauses 4.3,
of any purchase order cannot be taken as applying to the 7.3, 8.4, 14.5 or 41.7 to list but a few), but these all relate to general
Subcontract. matters under the Subcontract. Notices under Sub-clause 1.8 relate
In addition to entering the date of the Subcontract Agreement to termination and similar high-level matters which are to be dealt
(usually entered by hand when the document is finally signed) and with in a formal way, probably after the taking of legal advice by the
the names and addresses of the parties, the following must be party issuing the Notice. Notices issued in accordance with Sub-
entered in the body of the Subcontract Agreement: clause 1.8 are referred to in Sub-clauses 1.1, 14.9 and 41.9, and
Clauses 42 (Suspension of the Subcontract Works), 43
• In Paragraph 3: the Subcontract Contract Price, which must
(Termination by the Contractor for convenience), 44 (Termination
be stated as the total amounts in each of the stated
for Subcontractor default), 46 (Disputes), 47 (Adjudication), 48
currencies (see also the guidance on compiling Schedule 19
(Reference to an Expert) and 49 (Arbitration).
(Subcontract Price and payment));
If the parties wish the law of the Subcontract to be other than
• In Paragraph 4: the total aggregate liability of the Subcon-
English law then paragraph 16 should be amended accordingly.
tractor to the Contractor (again this may be in more than one
It is advisable that persons entering into a subcontract ensure
currency);
that the person signing on behalf of the other party has the
• In Paragraph 5: at (a) and (b) the two sums (again these may
necessary authority to sign.
be in more than one currency) applicable to the Subclauses
A further matter which may be appropriate and which should be
which are referred to;
dealt with in the Subcontract Agreement is that of conditions
• In Paragraph 6: the amount of the Deductible and the
precedent. In some instances the parties will need to enter into the
applicable currency;
Subcontract by signing the Subcontract Agreement but then have a
• In Paragraph 8: the date of the Subcontractor’s tender;
period of time within which certain actions must be
• In Paragraph 9: the date for commencement of the
Subcontract Works;
• In Paragraph 10: the name of the Contract Manager;
• In Paragraph 11: the name of the Subcontract Manager;
• In Paragraph 12: the name of the bank (or banks, if there are
to be more than one currency of payment) whose base rate
will determine the Agreed Rate;
• In Paragraph 13: delete the text in the square brackets which
is NOT to apply, as well as all square brackets;
taken by one or other of the parties (e.g. making of the Main shall comply with the Subcontract and shall be in every respect
Contract), and only when those actions are complete will the fit for the purpose for which it is intended as defined in the
Subcontract come into full effect. Such matters are called conditions Subcontract Specification or in any other provision of the
precedent. The following clause covers the more frequently required Subcontract.’
conditions precedent for subcontracts to deliver elements of major
A Subcontract without an adequate Subcontract Specification is
projects. The clause may need adapting to suit the particular
almost certain to lead to delays and disputes and in all probability
requirements. The Parties may wish to consider who will pay for
higher costs.
wasted costs if the Subcontract never comes into full effect. Note
The Specification should identify the engineering standards and
the further details that would be required to be included in the
codes of practice that are to be used, with great care taken to
Subcontract according to the clause as drafted.
provide sufficient detail to avoid any ambiguity in the definition. In
particular, where third party inspectorates will eventually rule on the
sufficiency or suitability for purpose of the Subcontract Plant, this
EXAMPLE ADDITIONAL PARAGRAPH TO INSERT IN THE AGREEMENT
must be clearly stated. Where the acceptance of the Subcontract
19. The Subcontract shall come into force on whichever is the later Plant by a third party inspector may have to be based on
of the following: regulations which are open to interpretation, the Contractor has a
right to expect the Subcontractor to design the Subcontract Plant so
(a) The date specified in the Subcontract Agreement
as to comply with any reasonable interpretation.
as the date for commencement of the Subcontract
If the Main Contract specifies such matters as corrosion
Works;
allowances or the design life of specific items, the relevant details
(b) The date on which any necessary legal financial or
must be incorporated here.
administrative requirements specified in the
If the Subcontract Plant includes a process unit, its capability to
Special Conditions as conditions precedent to the
make the desired product at a required rate from specified
coming into force of the Subcontract have been
feedstocks will form a principal feature of this document. A similar
fulfilled.
requirement may apply to items of equipment, and if their
The party responsible for meeting any precondition of performance could be affected by conditions such as ambient
effectiveness shall notify the other party when the temperature or fluctuations in the supply of energy, other utilities or
precondition has been met. feedstock, the applicable conditions must be stated. If the Main
Provided that if all the requirements stated above have not Contract specifies the performance at the end of the working life of
been met and notified by [date] this Subcontract materials or catalysts and for performance tests this must be
Agreement shall be of no effect. indicated in the Subcontract Specification.
Any spare or replaceable parts to be supplied with the equip-
ment should also be detailed, making clear whether their cost forms
part of the Subcontract Price or whether they are to be paid for
The Annex to the Subcontract Agreement separately.
The final sentence of Paragraph 1 of the Subcontract Agreement,

following the list of documents which form the Subcontract, states:
Schedule 1: Description of the Subcontract
‘For the purpose of identification, the contents of the Subcon-
tract, including the number of pages in each part, are listed in Works
the Annex to this Subcontract Agreement attached hereto.’
Schedule 1 should specify the Site and the services to be provided
Clarity as to what documents form part of the Subcontract is by the Subcontractor including design work, the construction of the
essential, as is knowledge as to the extent of those documents - for Subcontract Plant and any temporary works, and any other work to
example, has a page been lost? be carried out by the Subcontractor. The Schedule should include
The Annex to the Subcontract Agreement is therefore intended all the information that the Subcontractor requires to carry out the
to be a simple list of the various documents which form part of the Subcontract Works.
Subcontract, with the total number of pages in each document The guiding principle in drawing up this Schedule, Schedule 3
stated. A unique reference number on each page - the Contractor’s (Responsibilities of Contractor) and the Specification is that they
contract number for instance - or name of the project and should between them make clear and unambiguous the dividing
Subcontract will also be helpful in giving clarity as to the identity of lines between the respective responsibilities and scope of work of
those documents. the Contractor and Subcontractor, thereby defining the limits of the
The Annex itself should be clearly identified as such, and be Subcontractor’s responsibilities under the Subcontract.
attached to the Subcontract Agreement. The Site description should include:
• a written description which covers location, postal

The Subcontract Specification address, map references, what the Site comprises;
• plans of the Site including maps and layout, clearly indicating
See Sub-clauses 1.1, 1.2, 3.4, 7.1, 8.10 and 33.7 any hazardous, environmentally sensitive or ‘no go’ areas
The Subcontract Specification should describe the Subcontract and access points;
Plant in as much detail as possible, incorporating all technical • information concerning the topography and characteristics of
details as finally agreed. The more precise and detailed this the Site, including information on former uses, buildings and
Subcontract Specification, the greater the Subcontractor’s facilities.
understanding of his commitment. Where the Site is an existing plant, it is clearly important for
Note that Sub-clause 3.4 of the General Conditions states: Schedule 1 to provide detailed information concerning the
topography and characteristics of the Site, including all available
The Subcontract Plant as completed by the Subcontractor

information on former uses, buildings and facilities located on it. Final Documentation and Manuals
The details about site access necessary in Schedules 1 and 3 Final documentation and manuals are referred to in Sub-clause
will vary depending on whether the Site is undeveloped or part of an 21.9 and are likely to include drawings necessary for the Purcha-
existing facility. ser’s operation and maintenance of the Main Contract Plant,
All documentation necessary to complement the information mechanical manuals, spares lists, start-up and operating instruc-
contained in the Schedule should be listed and attached to the tions and similar documents.
Schedule. When the Subcontract includes a process, it is recommended
In cases where the work of others may affect the Subcontrac- that a process design manual should be included in the list of final
tor’s work, such activities should be fully described. documentation and manuals. The process design manual should
If the Contractor has arranged for others to carry out the civil include the background information on process design, and
work, it may well be the case that a Subcontractor who is supplying particularly state how compromise decisions have been made. A
equipment will have to supply a layout drawing and outline similar consideration applies to computer software. In the event that
foundation drawings with loads and bolting diagrams. changes are made to the plant design or to its as- built state, these
Any requirement upon the Subcontractor to provide commis- changes should be clearly recorded and then included in the final
sioning services, training, or attendance during performance testing issue of the process design manual.
must also be specified. A checklist is included in the Main Contract Guidance to
Schedule 1 is referred to in Clause 1 and Sub-clauses 7.1 and Schedules and can be used for reference.
28.5, and more generally the Subcontract Works are referred to in Schedule 2 is referred to in Sub-clauses 21.2, 21.6, 21.7 and
numerous places throughout the General Conditions. 21.9.
Documentation not to be shown to the Contractor or the Contract

Schedule 2: Documentation Manager
Note that Sub-clause 21.6 excludes certain categories of document
See Clauses 20 (Confidentiality) and 21 (Documentation) from the Contract Manager’s rights of inspection. If any documents
A disciplined approach should be established for the generation and are to be excluded they should be described in this Schedule or in a
issueof Documentation, particularly thelist of Documentation to be Special Condition.
produced or approved as the project proceeds. The amount of detail
set out in Schedule 2 will very largely depend upon whether the
Subcontractor has any responsibility for the design of the Schedule 3: Responsibilities of
Subcontract Works. These notes assume that he will.
Contractor
Documentation for approval
The Contract Manager will almost certainly wish to approve certain See Clause 4 (Contractor’s responsibilities) and Schedule 1
key drawings or other documents, some of which will need to be (Description of the Subcontract Works)
passed to the Project Manager for approval under the Main
Contract. The procedure for submitting and approving them is laid This Schedule should list the documentation and activities for which
down in Clause 21. The following may be considered for inclusion in the Contractor will be responsible. It is important for the Contractor
the list: to appreciate that he has an obligation to provide specific items,
particularly information, for the Subcontractor and that timely
(a) drawings or other documentation required by the Purchaser
performance of this obligation is essential.
or Contractor for local and other statutory authorities;
The Schedule should set out the extent to which the Contractor
(b) process flow diagrams (PFDs) including mass and energy
or the Purchaser will be responsible for the disposal of products and
flows and quality relating to battery limit conditions;
solid or liquid wastes arising from the operation of the Plant, and the
(c) piping and instrumentation diagrams (P&IDs);
circumstances under which this will apply (see Schedule 5
(d) key process equipment drawings and specifications;
(Environmental protection & waste disposal)).
(e) layouts (plot plans and elevations);
In accordance with Sub-clause 4.1 the Contractor will provide
(f) drawings locating battery limit crossings;
the bulk of the information in advance of the Subcontractor starting
(g) electrical single line diagrams;
work. Some of this may be contained in the Subcontract
(h) safety plan
Specification and its attachments. Any documentation to be
Important design calculations, specific design details of critical provided later should be described in as much detail as possible in
equipment items or other technical documents may require the this Schedule.
Contractor’s approval. If technology is licensed from a third party, this Schedule should
The essential Documentation should be discussed and define the role of the licensor’s personnel in checking or advising on
agreed during the tender negotiations so that no further design work, specifications, construction, start-up, performance
approval is necessary. The Documentation to be approved testing and trouble-shooting as applicable. In some instances, the
later should be kept to the minimum in order to avoid Contractor may elect to procure certain items of equipment and
hindering the progress of the project. provide them as Free-lssue Materials to the Subcontractor in
accordance with Sub-clause 4.2.
Documentation for information only
In Clause 23 (The Site) it is stated that the Contractor will give
If the Contract Manager wishes to see certain types of document access to and possession of the Site to the Subcontractor. This may
under the terms of Sub-clause 21.7 as a matter of course, these involve the provision of roadways, gates, fencing, signs, etc. The
may be listed in this Schedule under the above heading, thus extent to which these will be provided by the Contractor should be
avoiding the need for the Contract Manager to give notice on each specified in this Schedule.
occasion. The list should include the type of document, the subject Where the Site is part of an existing facility of the Purchaser,
to which it refers, the stage of its completion and the form in which it with access controlled by his security staff, the Contractor will need
should be submitted. to arrange for the availability of permits for individuals and vehicles

to enter or leave the premises, and state in the Schedule any order to comply with the CDM Regulations. It is to be expected that
restrictions on access to other parts of the facility. Note also the the Contractor will act as Principal Contractor under the CDM
requirements relating to Health and Safety referred to in the Regulations up to Take Over. This Schedule should state clearly
guidance on compiling Schedule 4 (Health & Safety). who is the Principal Contractor.
Copies of any rules applying to personnel on the Site must be There are a number of publications available on suitable
supplied by the Contractor to the Subcontractor. If compliance with procedures that can be adopted for the health and safety activities
any of these could increase the Subcontractor’s costs, they should relating to the construction and operation of process plants. It may
form part of the enquiry against which the Subcontractor is invited to be advisable for the Contractor and the Subcontractor to employ the
tender. Such rules could affect safety, working methods or industrial service of suitable professionals to carry out the necessary duties
relations. associated with health and safety planning.
The Contractor or Purchaser may choose to provide fire fighting, Sub-clause 26.2 requires the parties to adopt an approach to
security, medical, welfare and other facilities together with utilities health and safety planning that is risk based. In general the
(electrical power, water) for use by the Subcontractor. If so, these Contractor and Subcontractor will inevitably play a major role during
should be detailed in this Schedule, together with any arrangements the construction phase whereas the balance of responsibility for the
for charging. operating safety of the plant will rest with the Purchaser through the
The Schedule should define the services and ‘Contractor’s Contractor particularly after issue of the Final Certificate. It is
Equipment’ which the Main Contractor will provide on the Site and important that the parties’ roles are fully defined prior to project
which will be available to the Subcontractor to assist him in carrying commencement.
out the Subcontract. Often these will include various types of The Subcontractor should remember that he remains respon-
general assistance such as cranes, lifting gear, scaffolding, internal sible for safe working within the scope of his Subcontract Works. In
site transport and general construction and installation services. doing so, he will need to act in consultation with the Contractor and
Schedule 3 is referred to in Sub-clauses 4.1, 4.2, 24.1, 26.3 and where appropriate the Purchaser who may have set specific
27.4. requirements for the Site.
Schedule 4 is referred to in Sub-clauses 4.6, 7.2, 26.3 and 26.4.
Schedule 4: Health & Safety

Schedule 5: Environmental protection &
See Sub-clause 7.2 and Clause 26 (Health, safety, environment
waste disposal
and pollution)
The objective of this Schedule is to impose obligations on the See Clauses 26 (Health, safety, environment and pollution) and
Contractor and the Subcontractor to ensure that the Subcontract 34 (Site clearance)
Plant is safe to operate and maintain and that adequate docu-
The impact of environmental protection on the design and operation
mentation and other information is provided to ensure that the
of manufacturing plants has become highly significant. As a result,
Subcontract Plant can be operated and maintained safely and
all parties involved in the project should be aware of any relevant
without risks to health. In most cases it is not possible to transfer
national and international laws and treaties as well as any local or
either the legal obligations or the penalties for failure to meet them.
site-specific issues.
In the case of a process plant, however, there is room for genuinely
For those projects which could have an impact on the envir-
held differences of opinion as to what is or is not ‘reasonably
onment, it is the duty of both the Purchaser and the Contractor, with
practicable’ or ‘safe’ or ‘without risk to health’. It is essential that
the help as appropriate of the Subcontractor, to establish a properly
neither the Purchaser, the Contractor, the Contract Manager nor the
considered analysis of the impact on the environment of the plant,
Project Manager can impose upon the Subcontractor a requirement
its products, by-products and wastes. Whilst some issues are
to do something that the Subcontractor considers to be a risk to
relatively simple, requiring disclosure of the level of release to the
health or safety.
environment or statements regarding volumes, analysis and
In drawing up the Subcontract Specification and Schedule 1
frequency of release, others are significantly more complex. In the
(Description of the Subcontract Works), both parties should satisfy
latter case a detailed Environmental Impact Assessment is usually
themselves that the health and safety risks are fully assessed and
required by environmental protection agencies, and this should be
eliminated so far as reasonably practicable.
undertaken by a qualified specialist usually employed or retained by
The parties should remember that in the event of any incident the
the Purchaser.
Purchaser, the Contractor, the Subcontractor and the designer, if a
Ultimate responsibility for pollution lies with the operator of a site
separate organisation, may each be liable to prosecution.
or plant. This is particularly true regarding issues such as:
It should be noted that Clauses 3 (Subcontractor’s responsi-
bilities), 16 (Variations) and 17 (Variations proposed by Subcon- (a) disposal of waste;
tractor) are particularly relevant where any unforeseen hazard (b) contamination of air, sea, land and ground water;
comes to light in mid-project. Risks to health or safety are hazards (c) disposal of packaging materials or product containers;
and should be treated as such. Rather than run any risk of (d) the handling and disposal of nuclear and radioactive
borderline areas being neglected, overlapping of zones of chemicals.
responsibility of the Contractor and the Subcontractor for checking Item (d) needs special consideration due to the potentially long
designs and the quality and completeness of work should be period of contamination resulting from the radiation caused by
encouraged. nuclear materials. It should be noted that there is a statutory duty to
All relevant United Kingdom legislation should be taken into consult the Nuclear Inspectorate regarding the handling, storage
account by the parties, for example the Management (Health and and disposal of radioactive material. Specialist advice should
Safety) Regulations 1999, and the Construction (Design and always be sought in the event that either the Contractor,
Management) Regulations 2007 (CDM Regulations), the Control of Subcontractor or the Purchaser are not sufficiently experienced in
Major Accident Hazard Regulations 1999 (COMAH) as amended in the handling and processing of hazardous materials.
2005. Specific appointments must be made by the Purchaser in The use of recycled building materials in construction to mini-

mise the use of non-renewable or scarce resources is increasingly Schedule 6: Quality assurance and validation
required.
Sub-clause 26.7 sets out indemnities between the parties as to
which party will bear the cost of any clean-up of pollution. Note that See Sub-clause 3.8
there is nothing about who might do the clean-up (which might be In broad terms, quality assurance requires a documented
done by a third party), simply an allocation of the cost. systematic approach to the attainment of quality.
A further issue to consider is that of landfill tax and possible Quality assurance is now almost universally required in process
exemptions. Clarity is necessary in considering who in the projects. ‘Quality Assurance’ can be defined as all activities and
contractual chain is best placed to make any application for functions concerned with the attainment of quality and ‘Quality’ as
exemption from landfill tax and how the resulting savings in tax the totality of features and characteristics of a product or service
payments will feed into the contract payment mechanism. It may for that bear on its ability to satisfy a given need.
example be appropriate that a relevant subcontractor obtains the There are several recognised quality assurance standards.
tax exemption, which generally is otherwise payable on delivery of IS09001:2000 ‘Quality Systems: Part I Specification for
the waste to the licensed landfill site, and allows an agreed design/development, production, installation and servicing’ is
percentage of the savings in his subcontract price. If obtaining such particularly applicable to the process industry.
an exemption is time-consuming it would be appropriate that he is In addition to the standards for quality, specific engineering or
rewarded for his additional work by not having to pass all the saving other standards are likely to be listed in the Subcontract Specifi-
back to the Contractor and hence to the Purchaser. cation. Care must be taken to define to what extent each party is
Clause 34 clearly places the responsibility for Site clearance responsible for producing record documents.
with the Subcontractor. However, it must be recognised that there The Contractor must advise tenderers at the pre-contract stage
are a variety of types of waste other than those specifically stated of any specific quality assurance issues that are to apply to the
which may require disposal. Typical forms of waste may be as project, and he should provide copies of quality assurance control
follows: procedures that the Subcontractor will be required to adopt.
(a) Standard non-hazardous waste resulting from the The Subcontract should reflect the requirements of the Main
construction of the Subcontract Plant: Contract.
The removal of this waste is generally the responsibility of The following schedules may refer to quality assurance
the Subcontractor. activities, and they may require elaboration as the project proceeds:
(b) Waste resulting from Site preparation or demolition Schedule 2 (Documentation);
which may be a mixture of hazardous and non- Schedule 13 (Pre-installation tests and procedures);
hazardous materials: Schedule 14 (Criteria for the completion of construction); Schedule
Asbestos, toxic or biological wastes are typical of the 15 (Take Over procedures);
hazardous materials which may be found on an existing Schedule 16 (Performance tests and procedures).
chemical manufacturing site. The Purchaser normally bears Schedule 6 is referred to in Sub-clauses 3.8, 22.2, 22.3, 32.3, 32.5,
the responsibility of ensuring that such hazardous materials 33.3 and 33.5.
are removed from Site safely and disposed of at a
designated or licensed site. The Purchaser may request the
Contractor who may in turn request the Subcontractor to
organise the necessary specialists to carry out this work
and it is expected that in so doing he will operate all
necessary safety procedures to comply with the Codes of
Practice and legislation which apply. Nevertheless the
ultimate responsibility normally still lies with the Purchaser
and he must oversee each stage of the demolition or Site
clearance where hazardous materials are being handled, to
satisfy himself that he is discharging his legal obligations in
this regard.
(c) The final main category of waste product requiring clear-
ing from Site is chemical substances which are hazar-
dous, toxic or possibly of unknown character resulting
from chemical processing in the plant:
In this instance it is normally the sole responsibility of the
Purchaser to arrange for the safe removal and disposal of
the wastes. An exception to these circumstances would be
if the Contractor or Subcontractor is the owner of the
process technology, in which case he may be best placed
to establish the correct protocols for the removal from Site
of any waste, by-product or generally hazardous materials
from his process, but the actual removal and disposal of
these will usually be the responsibility of the Purchaser.
Schedule 5 is referred to in Sub-clauses 4.6, 7.2 and 26.4.

Schedule 7: Subcontracting completion of construction and well before commissioning so that
they can work alongside the Subcontractor’s engineering,
See Clauses 9 (Subcontracting and third party rights) and 10 construction and commissioning personnel. If, for example, they can
(Nominated Sub-subcontractors) assist the construction personnel in making lists of outstanding
minor items requiring modification or finishing, this will familiarise
In process plant projects most, if not all, of the equipment and other
them with the equipment and control systems, particularly pipework
materials will be manufactured and supplied by a number of
and the position of valves, vents and drains.
subcontractors. Similarly, some or all of the construction work on
Training covers a broad field. The Subcontractor may be called
Site will normally be subcontracted.
upon to provide basic training on various aspects of plant operation,
The Purchaser or Contractor may wish to ensure that the design
health and safety, quality assurance, instrumentation, control
of a particular process unit or plant item is the responsibility of
systems and maintenance procedures. Where the plant includes
designers with appropriate specialist experience, and in that case
technology with which the Contractor’s or Purchaser’s personnel
the Contractor should make this clear at the tender enquiry stage.
are not familiar, induction courses and workshops should be
If the Contractor has stated in the tender enquiry that he
arranged explaining the process, philosophy of design and control
requires certain design work to be carried out by named specialists,
systems and start-up, shutdown and emergency procedures.
they should be nominated by the Contractor in this Schedule.
All these requirements should be listed in the Schedule,
If the Subcontractor has stated in his tender that he proposes to
together with the methods and procedures to be adopted in carrying
subcontract parts of the Subcontract Works to named specialists,
out the training, the personnel who are to be trained and the timing
and the Contractor accepts them, this should be added to this
and duration of the training.
Schedule before contract award.
Schedule 9 is referred to in Sub-clauses 3.9 and 4.5.
Clause 10 deals with nominated Sub-subcontractors and in
particular specifies the procedure to be adopted if the Subcontractor
has valid reasons for objecting to any Sub-subcontractor
nominations which the Contract Manager has made. Schedule 10: Parts with limited working life
Schedule 7 is referred to in Sub-clauses 9.2. and spare parts
See Clause 37 (Liability for Defects) and Guide Note E (Liability

for Defects)
Schedule 8: Subcontractor's named
personnel Leaving aside normal wear and tear, it may be economical to
specify certain replaceable parts, such as filter media, with a short
See Clause 12 (Subcontract Manager and Subcontractor’s working life because the cost of a more durable alternative would be
staff) many times higher. Such parts should be detailed in this Schedule.
A suitable introduction to a list of such parts could be:
Many Contractors, with some justification, regard the experience of The following parts have been specified by agreement to have a
a particular Subcontract Manager to be of prime importance, and so limited working life. Attention is drawn to Sub-clause
there is a provision in Sub-clause 12.1 that the Subcontract 37.11 of the General Conditions in respect of such parts.’
Manager will not be replaced without the consent of the Contract The list should identity the item of equipment in which the part is
Manager. fitted, a description of the part including any identification code, and
Where specialised experience is required to carry out a project, the working life of the part under normal operating conditions.
the Contractor may consider it prudent or in some cases essential For any part with a guaranteed working life of less than 365
to request the Subcontractor to nominate not only the Subcontract days the effect of Sub-clause 37.11 is to reduce the Defects Liability
Manager but also key engineering and/or construction supervisory Period for that part from the 365 days applicable to the remainder of
staff. Sub-clause 12.4 provides for the continuing participation in the the Subcontract Plant to the working life of the part as stated in this
project of named key personnel who may be of considerable Schedule.
importance to the success of the project. These nominations should The information contained in the Schedule may be required for
be agreed pre-Contract and a list of such named personnel will be inclusion in the Purchaser’s planned maintenance schedule.
included in this Schedule. Spare parts
Whilst Sub-clause 12.4 recognises that the Subcontractor may It is normal for the Contractor to specify that the Subcontractor shall
wish to replace key personnel identified in the Subcontract, such provide spares, typically to cover two years of operation, in addition
replacement must be with the written consent of the Contract to commissioning spares. This requires extensive and detailed
Manager. If it is considered necessary, this Schedule should specify agreement between Purchaser, Contractor, Subcontractor and any
the circumstances under which the Subcontractor may nominate a relevant Sub-subcontractors to establish a basis for deciding on the
replacement and any required overlap period for handing over to quantity of spares to be provided. Risk and reliability analysis is one
the replacement. The Contract Manager will be expected not to method.
withhold his consent unreasonably. Spares will vary in quantity, size and price. It is, for example,
Schedule 8 is referred to in Sub-clauses 12.3 and 12.4. usual for major rotating equipment to be sent to Site with spare
Schedule 9: Training by Subcontractor rotors. Such items need careful warehousing and maintenance,
such as regular barring-over or rotating.
See Sub-clause 3.9 Other types of spares are needed for all rotating equipment,
control valves, instrumentation, electrical items, etc. Often the
Sub-clause 3.9 requires the Subcontractor to provide training for the classification and coding of all the many spare parts has to fit into
Contractor’s and/or Purchaser’s staff, and the Contractor and or the the Purchaser’s established inventory system. It is easy to
Purchaser have the responsibility to make personnel of suitable underestimate the cost of this aspect of a project.
calibre available for training. The most satisfactory arrangement for Alternatively the Purchaser may wish to set up a ‘just-in-time’
practical training to be achieved is for them to appoint and make spare parts supply chain with a local stockist holding the spares
available the key operating and maintenance personnel before

near to the Site. In this case clear delivery instructions, together where the Subcontractor may become entitled to an extension of
possibly with detailed storage descriptions, need to be written. time, the events listed in this Schedule should be under the control
These will need to be issued by the Contractor and followed of the Subcontractor without his having to rely on the performance
precisely by the Subcontractor. of the Contractor or the Contract Manager. For this reason events
Schedule 10 is referred to in Sub-clause 37.11. such as the ‘plant coming on stream’ or the ‘issue of an Acceptance
Certificate’ are not appropriate for the Subcontractor to have to
achieve to avoid paying liquidated damages. Furthermore undue
Schedule 11: Times of completion haste during the testing, start-up and initial operation of the plant
may lead to hazards arising which could affect the safety of the
plant and the personnel.
See Clause 13 (Times of completion and Approved
Programme) Sub-clauses 13.1 and 15.1 are worded in a way that places
emphasis on the completion of construction as the event most
The Subcontractor’s work may have a single objective of signif- appropriate for the application of liquidated damages for delay, but
icance to the Purchaser or the Contractor in terms of timeliness of the Contractor may prefer to apply such damages to a delay in
completion, such as the construction and start-up of a process unit; taking over. If that is the case, the Contractor should extend the list
alternatively it may have several such objectives of varying priority. of criteria in Schedule 14 (Criteria for the completion of
These will in either case form the main features of this Schedule construction) to include all the procedures he wants the Subcon-
and hence the Approved Programme, and should be considered at tractor to carry out ready for taking over by the Contractor, and then
an early stage of the project. It is of fundamental importance that write ‘None’ in Schedule 15 (Take Over procedures). Then the
care is taken to ensure that this Schedule is completed in a way Contract Manager could issue a Take Over Certificate under the
which is consistent with the provisions of the Main Contract, terms of Sub-clause 33.7. Such an arrangement would avoid any
including the corresponding Schedule 11. confusion about how far take over procedures had been completed
Except in the most simple of projects, the Subcontract Plant is by a certain date, which could arise as a result of the application of
likely to consist of several sections, some of which are operationally the terms of Sub-clauses 33.8 to 33.12 inclusive.
dependent on others. There will thus be a logical sequence in which Whatever the event, it requires precise definition to minimise the
completion of each will be required in order to achieve the most possibility of dispute as to the time when it is actually achieved.
satisfactory commissioning of the whole project. Furthermore the Schedule 11 is referred to in Sub-clauses 1.1,4.1, 4.2, 13.1,
actual task of thoroughly inspecting and testing a completed plant 13.2,15.1,21.2, 21.9, 32.8, 41.9 and 42.3.
before it can be used safely can be costly in time and resources. To
leave the whole of a project to be inspected and tested at the same
time could lead to the procedure being rushed because of pressure
from production management and hence lead to potential hazards,
Schedule 12: Liquidated damages for delay
or else lead to unexpected delay if the inspection work is done
See Clauses 4 (Contractor’s responsibilities) and 15 (Damages
properly. For this reason adequate time should be allowed for
for delay)
inspection and testing.
For each event for which the Contractor requires to define the The Schedule must clearly define the amount of liquidated damages
time-scale, this Schedule should specify: and the events to which they apply.
The events should correspond with those listed in Schedule 11
(a) the time for commencing the event (either as a date, or by a (Times of completion).
period from the date for the commencement of the Liquidated damages are normally expressed as a sum of money
Subcontract Works as defined in the Subcontract Agree- or percentage of the Subcontract Price against a specified unit of
ment or some other defined event); and time e.g. per week of delay. If the delay involves a partial unit of
(b) the time for completing the event (by date or period). time, such as one week and three days, thought should be given as
Appropriate cross-references should be made to the relevant to how the part unit may be treated.
Schedules, in particular Schedules 14 (Criteria for the completion of Liquidated damages should not exceed the genuine preestimate
construction), 15 (Take Over procedures) and 16 (Performance of loss that the Contractor may suffer if the Subcontractor is late. A
tests and procedures). This Schedule should include all critical sum which is excessive is liable to be struck down in its entirety as
dates or time intervals, not only for completion by the a ‘penalty’ regardless of how it is described.
Subcontractor, but also for any supply by the Contractor required to If the Contractor is willing to limit the Subcontractor’s liability for
facilitate the Subcontractor’s work, culminating in the time for delay (which could be reflected in a lower Subcontract Price), an
completion of construction of the Subcontract Plant. The Schedule upper limit for the total liquidated damages payable for delay should
should also state a date by which or period within which the be stated, either as a percentage of the Subcontract Price or as a
Subcontractor should submit a programme for approval in sum of money (which would equate to a multiple of the daily/weekly
accordance with Sub-clause 13.2. rate of damages). Contractors should note that, in accordance with
Where several sections of the Subcontract Plant or the Sub-clause 15.1 the Subcontractor has no liability to pay further
Subcontract Works are identified in the Subcontract Specification or damages once an upper limit is reached.
in Schedule 1 (Description of the Subcontract Works) separate In considering the amount of liquidated damages to be inserted
dates or periods should be stated for each. in the Subcontract, the Contractor will need to bear in mind his
In any event clarity is essential as to what is intended as an potential liability to the Purchaser under the Main Contract for
event for which a date or period is stated. liquidated damages and to other Subcontractors for their losses
The Schedule should only contain events connected with caused by delay. In addition, the Main Contractor may incur
liabilities for delay and other key events which are of importance to additional costs of his own as a result of such delay.
the Contractor, or which are required for the purposes of Sub- If there are to be no liquidated damages, the parties should be
clause 13.2 (see below). Care should be taken not to unnecessarily clear whether the intention is that there will be no damages for
restrict the Subcontractor’s freedom to programme the work as he delay at all, or simply that there are no stated liquidated damages
sees best, and thereby add to the cost. but that general damages for proven losses will apply instead.
To avoid as far as possible the operation of Sub-clause 14.1,

Under some contract strategies, in particular where there is an effort For more extensive guidance on this subject, see Guidance on
to align the interests of the Purchaser, the Contractor and possibly Schedule 14 in the Red Book.
other contractors and subcontractors towards an overall project An example of a Construction Completion Certificate is given in
objective (sometimes called ‘partnering’), no damages for delay are Appendix B.
payable, whether liquidated or general. Instead the programme may Schedule 14 is referred to in Sub-clauses 32.2. and 32.7.
be incentivised through bonuses.
If it is intended that liquidated damages for delay shall not apply
but that general damages do apply, a Special Condition should Schedule 15: Take Over procedures
state that the text of Clause 15 is deleted and replaced by a simple
statement that general damages for delay shall apply. Schedule 12 See Clause 33 (Taking Over)
should be marked as ‘not used - general damages apply’.
This topic is considered more fully in Guide Note K (Incentives This Schedule should list any outstanding inspection and
for early completion) of the Red Book. commissioning procedures as well as the take over tests them-
Schedule 12 is referred to in Sub-clause 15.1. selves. Documentation by the Subcontractor and any approvals
from third party organisations needed by the Contractor to satisfy
the Purchaser that the Subcontract Plant may safely be started up,
operated and maintained must be stated.
Schedule 13: Pre-installation tests and The parties to the Subcontract may decide at the time of
procedures contract signing that this Schedule cannot be satisfactorily
completed until the Subcontractor or Contractor as the case may be
See Clause 22 (Inspection and pre-installation tests) has had time to carry out further design and engineering work, in
which case a Special Condition should be included stating the time
Clause 22 provides for the Contract Manager to carry out off-site by which a draft of the complete Schedule should be submitted to
inspection and witnessing of tests to satisfy himself (or his nominee the Contractor by the Subcontractor together with the procedure for
- see Sub-clause 22.8) that work performed by the Subcontractor, agreeing the final content of the Schedule.
or the Subcontract Materials, are in accordance with the An item often overlooked is the provision of materials certifi-
Subcontract Specification. cates, test records, operating procedures and other related
The Subcontract Materials could include critical equipment items documentation. Such documents are usually contained within the
such as reactors, pressure vessels, machines or package units the Operations and Maintenance Manual to be supplied by the
performance of which the Purchaser and/or Contractor requires to Subcontractor in accordance with Sub-clause 21.9. Incomplete or
be demonstrated in the manufacturer’s premises by a running test. inaccurate documentation can lead to disputes. The Subcontractor
They could also include software and control systems if these are should make every effort to compile the necessary dossiers and
supplied by the Subcontractor. These requirements should be set manuals prior to the taking over of the Subcontract Plant.
out in detail in Schedule 13. It will be a matter of judgment for the Contractor to decide how
Pre-installation and factory tests could include not only tests of much of the work involved in finalising the preparations for startup
the performance of components, but any appropriate forms of test, should form part of the take over procedures while the
such as pressure testing or load testing. The inspections could Subcontractor is still in charge of the Subcontract Plant, and how
cover welding records, certificates of origin of alloys, etc. This much should be done after taking over.
Schedule should include: It is normally the case that all operating chemicals, raw
(a) a description of the work, software or Subcontract Materials materials, feedstocks and utilities will be provided by the Purchaser,
to be tested; and in turn the Contractor. This should be stated in Schedule 15.
(b) a description of the test and, where appropriate, details of An example of a Take Over Certificate is given in Appendix B.
the test rig, measurement accuracy and outputs expected; Schedule 15 is referred to in Sub-clauses 33.2 and 33.7.
(c) the criteria to be achieved during each test together with
acceptable tolerances.
The Project Manager (or his nominee) also has the right to carry Schedule 16: Performance tests and
out his own inspection or witness the tests referred to above.
procedures
See Clause 35 (Performance tests) and 36 (Acceptance) and
Schedule 17 (Performance guarantees and damages for failure)
Schedule 14: Criteria for the completion of
Clause 35 is to apply if the Subcontractor has made specific
construction
guarantees in respect of the performance of the Subcontract Plant
verifiable by performance tests (see Sub-clause 35.1), with the
See Clause 32 (Completion of construction) guarantees being stated in Schedule 17. Whether or not the
This Schedule will define the criteria to be satisfied by the Subcontractor will be required to make any such guarantee is likely
Subcontractor when he offers elements of the Subcontract Plant for to depend in the first instance on whether the Contractor is required
inspection and provides the Contract Manager with a draft form of to make any corresponding guarantee under the Main Contract.
Construction Completion Certificate. Performance guarantees are largely concerned with operating
The Schedule should commence by reiterating that the costs. Typical examples are production rates and product quality,
Subcontract Plant must be constructed in accordance with the consumption rates of utilities, raw materials, chemicals and
Subcontract Specification. The activities and tests which the catalysts, and in some cases discharges of effluents and hazardous
Contractor requires to be carried out by the Subcontractor within the emissions. Ultimately, these are matters of concern to the
time limit stated in Schedule 11 (Times of completion) must then be Purchaser as the operator of the plant, rather than the Contractor.
listed. It is essential that this Schedule takes into account relevant Unless the Contractor has any obligation to provide operational
parts of the corresponding schedule in the Main Contract. services, there are unlikely to be circumstances where the

Contractor has an interest in operating costs which is not reflecting Schedule 18: Valuation of Variations and
a requirement of the Purchaser.
If therefore the Contractor is required to give any performance claims
guarantee under the Main Contract he will need to consider whether
the performance of the Subcontract Plant has any relevance to such See Clauses 18 (Valuation of Variations) and 19 (Claims)
a guarantee, and if so include in the Subcontract a requirement for
It should be noted that there are several pricing mechanisms that
appropriate performance tests and procedures. A Main Contract
can be used in the valuation of variations including lump sums, fixed
requirement may have relevance to several subcontracts, and the
costs, measured rates or combinations of all of these. It is important
way in which each subcontract is affected will be for the Contractor
that the Subcontract is clear as to which method or combination of
to consider. The appropriate performance tests and procedures for
methods is to be used in order to avoid misunderstanding and
the Subcontract should be set out in this Schedule 16.
potential conflict later.
It is very likely that the performance guarantee that a Subcon-
A detailed consideration of this topic is set out in the guidance in
tractor is willing to offer will influence the performance guarantee
the Red Book on compiling Schedule 18.
that the Contractor will offer the Purchaser. Such issues will work
both up and down the supply chain, and the Contractor would be
well advised to establish the level of performance guarantee he can
obtain from his Subcontractors before committing himself under the
Main Contract.
In structuring any performance guarantee the Contractor will
take a lead from the Main Contract in terms of the particular
requirements of the tests and procedures he will require of the
Subcontractor, including matters of timing (see Sub-clauses 35.4
and 35.6).
For a more general consideration of this topic the reader is
referred to the Red Book: the guidance on compiling Schedule 16,
Guide Note J (Completion, Taking Over, testing and start up) and
the flowcharts in Appendix A (Performance Test Flowcharts).
An example of an Acceptance Certificate is given in Appendix B.
Schedule 16 is referred to in Sub-clauses 35.3, 35.8 and 35.10.
Schedule 17: Performance guarantees and

damages for failure
See Clause 35 (Performance tests) and Schedule 16 (Perfor-

mance tests and procedures)
The guidance on compiling Schedule 16 considers the likelihood of

performance guarantees, and the need for the Contractor to
consider his position under the Main Contract. If he is to require any
performance guarantee from the Subcontractor, that guarantee and
the damages for failure of the guarantee will need to reflect the
Contractor’s obligations to the Purchaser and the Subcontractor’s
contribution to those obligations.
Any liquidated damages for failure must be no greater than a
genuine pre-estimate of the loss which the Contractor will suffer. In
part that will reflect the level of liquidated damages that are stated in
the Main Contract.
Consideration will also need to be given to any limit on the
degree of failure of the performance guarantees which attracts
liquidated damages, i.e. the threshold or circumstances at which the
damages may revert to general damages — see Sub-clause 35.12.
The value of such a limit must also be stated in Schedule 17, and
will need to be fixed having regard to the equivalent limit under the
Main Contract.
For further consideration of this topic the reader is referred to
the guidance in the Red Book on compiling Schedule 17.
Schedule 17 is referred to in Sub-clauses 35.1,35.12, 35.13,
35.14 and 35.17.

Schedule 19: Subcontract Price and payment Schedule 20: Subcontract coordination
See Sub-clause 5.4

See Clause 41 (Payment)
A Subcontract co-ordination procedure is essential if the parties are
Subcontract Price to carry out their duties effectively, efficiently and in accordance with
While the General Conditions are drafted for use in the UK it is not the project programme. The drafting of Schedule 20 is therefore of
uncommon for payment to be in more than one currency, the great importance. The Schedule should include the following:
Subcontract Price may be stated in more than one currency. Where
(a) primary points of contact in each organisation including
significant elements of the Subcontract Plant are to be imported it
addresses, telephone, facsimile and email addresses;
may be agreed that payment of part of the Subcontract Price is in
(b) specific methods of identifying documents including
euros or US dollars or other currency as applicable. The
sequential numbering systems;
Subcontract Price will be the sum of the total amounts in each
(c) a common project index for numbering and filing documents
currency for each of the two or more elements of the Subcontract
in electronic and hard copy format;
Works. For example, The Subcontract Price is £ 5,525,000 + US
(d) methods of document and data transfer;
$3,248,000.’
(e) the arrangement for the issuing of invoices to meet the
The total values which form the Subcontract Price in the various
respective parties commercial operating standards and
currencies are to be stated in Paragraph 3 of the Agreement.
methods;
Schedule 19, under the sub-heading of Subcontract Price, will
(f) the method of transferring payments between the parties
need to give the detail. At the very least it will be necessary to be
including electronic banking details;
clear as to which work and Materials are included within each part
(g) the format of project status reports including the Subcon-
of the Subcontract Price, including clarity between the provision to a
tract Manager’s report.
port of imported Materials and the local transport costs in taking
those Materials to the Site. Consideration should be given to the Subcontractor being
It may be appropriate to include a price escalation mechanism in required to report progress against the Approved Programme using
respect of elements of the Subcontract Price, such as where the a recognised critical path analysis package, together with an
price of an element is largely dependent on the price of a specific executive summary.
commodity. If possible such a mechanism should be linked to It is emphasised that informal communications, whilst helpful to
published inflation indices, such that if the indices vary then the the day to day running of the project, must at all times be confirmed
Price, or the particular interim payment to be made, varies in writing so that accurate instructions or requests for information
according to the change in the index without further negotiation. If can be distributed to all relevant members of the Contractor’s team.
an appropriate index exists then clauses which make the application See Sub-clauses 1.6 and 5.1.
of the formulae dependent upon the Subcontractor actually If the required arrangements stated in Schedule 20 are incon-
experiencing additional costs, to be evaluated by using the indices, sistent with Sub-clause 1.6 a Special Condition to amend Sub-
simply make for unnecessary work and potential grounds for clause 1.6 will be necessary.
disputes. Schedule 20 is referred to in Sub-clause 5.4.
Clarity will also be necessary in terms of which party bears any
exchange rate risk included within one or other of the currency
elements of the price (for example, if the local currency element
includes imported goods which are to be paid for in local currency Schedule 21: Reports and records
because such goods are freely available in the country). If the
Contractor is to carry any such element of foreign exchange or See Sub-clauses 3.7, 16.8 and 40
other risk, that should be defined by reference to the particular
exchange rates of a named Bank. Reports
Sub-clause 3.7 requires the Subcontractor to provide a monthly
Terms of payment report to the Contract Manager on the progress of the Subcontract
Clause 41 provides for the payment of the Subcontract Price in Works, supporting his reports with appropriate documents including
instalments according to Schedule 19 and deals with the procedure any update of the Approved Programme. Schedule 21 is the
to be adopted for the payment of each instalment. The General appropriate place to detail any more specific requirements of that
Conditions do not specify the pattern of the instalments or how the general obligation, itemising any particular requirements or topics
amounts to be paid are determined. These should therefore be set which the monthly report should contain or the format in which it
out in this Schedule. should be provided.
Sub-clause 41.2 provides that payments to be made according In setting out the requirements of the Subcontractor in this
to the completion of defined tasks, sometimes known as ‘stage’ or Schedule, the Contractor will need to be mindful of his obligations
‘milestone’ payments, are to be made only upon completion of under the Main Contract.
those tasks. These must be clearly defined so as to minimise Records
arguments about whether or not completion has been achieved. It is Sub-clause 3.7 requires the Subcontractor to provide and maintain
important to avoid events such as the issue of Acceptance records as detailed in Schedule 21. Such records should include
Certificates as the point for a stage payment, because they depend details of progress and of the labour, Subcontractor’s Equipment,
upon the activities of others - for example the conduct of the Subcontract Materials and Sub-subcontractors on Site. These
performance tests by the Purchaser or the Contractor. requirements should be briefly set out in this Schedule.
Attention is drawn to the further guidance in the Red Book, and Clause 40 (Records and audits) sets out the Subcontract
in particular to Sub-clause 41.6, which is drafted in compliance with requirements for the length of time that records are to be kept.
current legislation. It should be noted that records may well be of technical matters
Schedule 19 is referred to in Sub-clauses 41.1 and 41.2. and not simply costs, and again Schedule 21 should set out the
Contractor’s requirements of such records.
When the Subcontractor considers that he is entitled to claim

extra time and/or money he will need to keep more detailed records
of the circumstances, actions taken, Subcontractor’s Equipment and
Subcontract Materials used, and similar details. The Contractor and
the Contract Manager will need to consider the extent to which it is
necessary to define the requirements for such additional records. It
should be noted that records are increasingly being held in
electronic rather than paper format.
The Schedule should contain, as far as possible, samples of the
forms to be used, or in the case of computerised records, printouts
of typical records.
In any case, whatever form the records are to take, there will be
certain basic requirements. Each document should show:
(a) Subcontract title and identification number;
(b) topic covered, identified in relation to the contract docu-
mentation;
(c) date on which the work was carried out or on which the
expenditure was incurred;
(d) name of person working, hours worked and resources used
by him, as appropriate;
(e) quantities of materials or other resources used, if applic-
able; and
(f) in the case of subcontracted work or purchases from
suppliers, the invoiced cost.
As with the provision of reports, the Contractor’s requirements
for the keeping of records by the Subcontractor will in part need to
reflect the Contractor’s obligations under the Main Contract.
Schedule 22: Main Contract particulars
See Clause 1 (Definitions, interpretation, waiver and Notices)

and Sub-clause 3.10
Sub-clause 3.10 sets out the Subcontractor’s obligations with

respect to the Main Contract. Unlike some other standard forms of
subcontract the Yellow Book has been drafted on the basis that the
Contractor should prepare a subcontract, which subsequently the
Contract Manager manages, in which the duties and responsibilities
of the Subcontractor are properly described without irrelevant
material being included simply because that is more convenient to
the Contractor.
The Contractor should distill into this Schedule only those
matters from the Main Contract which are relevant to the
Subcontract. Just what matters are relevant will depend upon a
number of factors including, for example, where the design
responsibility for the Subcontract Plant lies-with the Contractor, the
Subcontractor or both of them. While the Subcontract Specification
may well include a direct copy of relevant elements of the Main
Contract Specification it is not intended that Schedule 22 should
simply be a copy of the Main Contract excluding pricing details. It is
not appropriate that the Subcontractor has the task of reading
through the whole of the Main Contract to attempt to identify (and
guess) those matters which are relevant to his work and
responsibilities.
Schedule 22 is referred to in Sub-clause 3.10.

Guidance on contractual issues
For more extensive guidance and discussion, the user should refer XX. Contractor's right to review design work
to the Guide Notes attached to the applicable Main Contract Form
(i.e. Red, Green or Burgundy Book) published by IChemE when
considering implications for the Subcontract. Points of particular XX.1 The Contractor will require to review the design work carried
relevance to the Subcontract are given below. out by the Subcontractor relating to those parts of the
For ease of reference, a listing of the Guide Notes included in Subcontract Plant or aspects of the design of the
each of the Main Contract forms is included at Appendix A. Subcontract Plant so designated in the Subcontract
Specification. The Subcontractor shall keep the
Contractor informed of the progress of such design work
by the preparation of reports at appropriate stages and in
Guide Note A: Reviews and information any event at intervals of not more than thirty days
starting from the commencement of such work. The
The Contractor may require the Subcontractor to check information Subcontractor shall afford reasonable access during
provided by the Contractor before he uses it, or may wish to rely on normal working hours for the Contract Manager or his
some special expertise of the Subcontractor in designing and designated representatives to the personnel carrying out
constructing a particular type of plant, in which case a Special such work, and shall provide the Contract Manager with
Condition may be required such as the following: a copy of any document relating to such work, at the
request of the Contract Manager or his designated
representative.
EXAMPLE CLAUSE
XX. Subcontractor's warranty Guide Note B: Secrecy, patents, etc
The secrecy obligations stipulated in Clause 20 (Confidentiality)

XX.1 The Subcontractor warrants that he is qualified and
become effective only after the Contractor and the Subcontractor
experienced in the design and construction of plants
have entered into a valid Subcontract. If any confidential information
involving technology of the type to be used in the
is communicated by either party at the tendering stage, it should be
Subcontract Plant. The Subcontractor shall apply his
protected by suitable secrecy undertakings at that stage.
expertise in this respect to the examination of the design
There exists the possibility of a patent being granted to a third
information supplied to him by the Contractor and shall
party between the date of tender and the date of the Subcontract
promptly bring to the attention of the Contract Manager
Plant coming into operation. If a process is to be supplied by the
any error, omission or inconsistency in such information
Subcontractor as part of his expertise it would be reasonable to
of which he becomes aware. The Subcontractor shall
expect him to review all new patents in the field and inform the
assist the Contractor to remedy such error, omission or
Contractor of any that might be relevant to the design, construction
inconsistency and to improve the [process] design infor-
and operation of the Subcontract Plant and of any patent relating to
mation to a suitable extent, provided that in so doing he
product use. The parties should then discuss what would be the
shall not be required to breach any undertaking given to
most cost-effective way of overcoming any problems encountered.
a third party in respect of proprietary information.
EXAMPLE CLAUSE
The Contractor may require the Subcontractor to carry out Book is simply that a Variation which is within the 25% or 5% rule
design work of an innovative nature for a part of a plant about which as set out in Sub-clause 16.6(a) or (b) of the Main Contract Forms
the Contractor has some views but which he cannot define in writing might represent anything up to 100% (or even more) of a particular
at the time the Subcontract is finalised. As a result, the Contractor Subcontractor’s work. Thus to duplicate the restriction at the
could propose a Special Condition giving him the right to review the subcontract level may leave the Contractor unable to fulfil his
Subcontractor’s design work at an earlier stage than the submission obligations.
of Documentation for approval provided in Schedule 2 Nevertheless Sub-clause 16.6 provides the Subcontractor with
(Documentation). For example: protection at (e), which will cover for example if the difficulty is the
Guide Note C: Variations availability of resources such as manufacturing capacity.
Similarly the Subcontractor should be aware that there could be
Unlike the Main Contract Forms the Yellow Book does not contain a major reduction in his work and he should ensure his contract
within Sub-clause 16.6 a restriction on the aggregate value of protects him from any real loss in this event.
Variations, a restriction which is to protect the Contractor from the Careful and prompt use of the Variation procedure to record
possibility of the overall size or value of the Main Contract either detailed changes of the Subcontract Specification and Description
being much larger or much smaller than that originally envisaged. of the Subcontract Works is essential for the good management of
The reason for not including such a restriction in the Yellow the project and for the avoidance of disputes. Full discussion and
cooperation between the parties during the Variation procedure also
avoids disputes.
Guide Note D: Insurance
The Contractor must take care to ensure that any Special Condi-
tions in the Main Contract which have the effect of varying the
insurance provisions of the Main Contract General Conditions are
reflected in the Conditions of Subcontract through a Special
Condition.
For a more general consideration of this topic the reader is
referred to Guide Note I (Insurance) in the Red, Green or Burgundy
Book as applicable.
Guide Note E: Liability for Defects
Attention is drawn to the definition of the Defects Liability Period in

Sub-clause 1.1 and the facility in the Subcontract Agreement to
have the period of 365 days commencing either with the issue of
the applicable take over certificate under the Main
Contract or of the applicable Take Over Certificate under the
Subcontract. This is linked to Sub-clause 9.3 in the Red Book (and
9.8 in the Green and Burgundy Books). It should be recognised that
the period between the issue of the two take over certificates may
be many weeks or months, and will therefore affect the issue of the
Final Certificate and the application of Subclause 38.3 under the
Subcontract.
Guide Note F: Disputes
If users prefer that adjudication should apply irrespective of the

exemptions provided by the Housing Grants, Construction and
Regeneration Act 1996, this can be achieved by a Special Condition
which states that Sub-clause 47.1 is deleted.
It is strongly advised that users who believe that adjudication
has no place in their contract do not attempt to delete the whole of
Clause 47 by means of a Special Condition, for the simple reason
that if a subsequent challenge establishes that the Act does apply
then legislation will imply terms into the contract including the
conduct of the adjudication under the Scheme for Construction
Contracts and the selection of an adjudicator by any adjudicator
nominating body irrespective of their knowledge of the form of
contract, or, more importantly, process plant contracts.
In common with a number of other standard forms of subcon-
tract the General Conditions of Subcontract include, at Subclause
50.2, for a dispute under the Subcontract which is substantially the
same as a dispute under the Main Contract to be referred to the
Main Contract arbitral tribunal, provided that the arbitrator has not
already been appointed under the Subcontract. The Purchaser’s
agreement would also be required.
This has the advantage of consistent decisions across the two
contracts and savings in costs.
For a full discussion of the complex and important subject of
Dispute Resolution options and procedures see Guide Note P
(Dispute Resolution) in the Red, Green and Burgundy Books.
Appendix A: List of Guide Notes contained in the Main
Contracts
Guide Note A: Innovative work or checks by Purchaser, process licensor or Contractor
Guide Note B: Intellectual property, know-how, confidentiality, information and software
Guide Note C: Unforeseen physical conditions
Guide Note D: Taxes
Guide Note E: Site services and working conditions
Guide Note F: Variations and claims
Guide Note G: Delivery to Site
Guide Note H: Ownership
Guide Note I: Insurance
Guide Note J: Completion, Taking Over, testing and start up
Guide Note K: Incentives for early completion
Guide Note L: Liability for Defects
Guide Note M: Suspension
Guide Note N: Termination
Guide Note 0: Limitation of Contractor’s liability
Guide Note P: Dispute resolution
Guide Note Q: Bonds and guarantees
Guide Note R: Rights of third parties
Guide Note S: Joint ventures

Appendix B: Sample Certificates
The following sample certificates are given as an indication only of the likely content of each certificate. Users should take care to ensure
that the words used in a certificate accurately reflect the terms of the Contract as they apply to the particular situation in which a certificate is
issued.
Sample Construction Completion Certificate
Subcontract Title and Identification Number:
Contractor:
Subcontractor:
List of parts of the Subcontract Plant substantially completed, covered by this
Certificate: Criteria listed in Schedule 14 which apply to these parts of the
Subcontract Plant: Programme for inspection and tests:
In my opinion the parts of the Subcontract Plant listed above are substantially complete and meet the above-mentioned criteria listed in
Schedule 14. In accordance with Sub-clause 32.2 of the General Conditions I therefore propose the above programme for inspection and
tests, commencing on [date].
Signed:...........................................................
Name: ............................................................
Date: .........................................................
On behalf of the Subcontractor
Contract Manager’s certification:
* In accordance with Sub-clause 32.7 of the General Conditions the parts of the Subcontract Plant listed above do not meet the criteria in
Schedule 14 as listed above in the following significant respects:
* In accordance with Sub-clause 32.6 of the General Conditions I hereby certify that the parts of the Subcontract Plant listed above were
substantially complete in accordance with Sub-clause 32.6 of the General Conditions as of [date] and in such a condition that the relevant
take over procedures may be carried out.
* In accordance with Sub-clause 32.6 of the General Conditions I require the following minor items to be completed before the issue of a
Take Over Certificate covering the parts of the Subcontract Plant listed above:
Signed:...........................................................
Name: ............................................................
Date: .........................................................
Contract Manager
* Delete as applicable
Sample Take Over Certificate
Contractor:
Subcontractor:
Date of Certificate:
(Alternative A—where the Subcontract Plant or any Section is being Taken Over under Sub-clause 33.7 or 33.10)
(1) In accordance with Sub-clause [33.7/33.10] of the General Conditions I hereby certify that the [Subcontract Plant]/[Section(s) of
the Subcontract Plant listed below], apart from any parts of the [Subcontract Plant]/[Section(s) listed below], [has]/[have]
satisfied the requirements of the Subcontract Specification and Schedule 15 of the Subcontract and the Subcontractor has complied
with Sub-clause 21.9 of the General Conditions and therefore such [Subcontract Plant]/[Section(s) of the Subcontract Plant
listed below] [is]/[are] Taken Over by the Contractor as from the Take Over time and date stated below.
Section of the Subcontract Plant Taken Over:
(2) The following parts of the [Subcontract Plant]/[Section(s) of the Subcontract Plant] are excluded from Taking Over:
(3) The following minor items of work are still to be completed in accordance with Sub-clause 33.8 of the General Conditions,
(a) .......................
(4) The following Take Over procedures have been omitted by operation of Sub-clause 33.10 of the General Conditions and still remain
to be carried out by the Subcontractor in accordance with Clause 33 (Taking Over) of the General Conditions.
(a) .......................
(b) .................................
(5) The Taking Overtime and date is:

(Alternative B—where the Subcontract Plant or any Section is being Taken Over under Sub-clause 33.9)
(1) In accordance with Sub-clause 33.9 of the General Conditions I hereby certify with the Subcontractor’s consent that the
[Subcontract Plant]/[Section(s) of the Subcontract Plant listed below], apart from any parts of the [Subcontract Plant]/[Sec-
tion(s) listed below][is]/[are] Taken Over by the Contractor as from the Taking Over time and date stated below.
Section of the Subcontract Plant Taken Over:
(2) The following parts of the [Subcontract Plant]/[Section] are excluded from Taking Over for the reason(s) stated:
(a) because the take over procedures have not been carried out...............
(b) because the take over tests have not been passed .............
(3) The following minor items of work are still to be completed in accordance with the terms of Sub-clause 33.8 of the General
Conditions:
(a) .......................
(b) .................................
(4) The following take over procedures have been omitted by operation of Sub-clause 33.9 of the General Conditions and still remain to
be carried out by the Subcontractor in accordance with the terms of Clause 33 (Taking Over) of the General Conditions:
(a) .......................
(b) .................................
(5) The Taking Overtime and date is: ...........................
Signed:
Name:
Contract Manager
Contractor:
Subcontractor:
(1) In accordance with Clause 36 of the General Conditions I hereby certify that the [Subcontract Plant]/ [Section (s) of the Subcontract
Plant listed below] have:
*(a) passed all the performance tests satisfactorily;
*(b) passed all the performance tests, except for those performance tests for which the appropriate [liquidated damages
have/compensation has] been paid or allowed for by the Subcontractor
Sample Acceptance Certificate
and I therefore issue this Certificate in accordance with Sub-clause 36.3 of the General Conditions;
*(c) been Accepted by the Contractor by notice of election issued to the Subcontractor in accordance with Sub-clause 36.5 of the
General Conditions.
*(2) Known Defects to be made good by the Subcontractor and minor items still remaining to be completed in accordance with Sub-clause
36.3 of the General Conditions are listed in the attached ‘punch list’.
Signed:
Name:
Contract Manager
* Note: Delete as applicable.
Contractor:
Subcontractor:
(1) In accordance with Sub-clause 38.1 of the General Conditions I hereby certify that in respect of the [Subcontract Plant]/[Section
(s) of the Subcontract Plant listed below]:
(a) the Defects Liability Period has expired; and
(b) the Subcontractor has made good all Defects that have appeared during the Defects Liability Period.
(c) the Acceptance Certificate has been issued in respect of the [Subcontract Plant]/[Section(s) of the Subcontract Plant
listed above],
(2) This Final Certificate is effective from [time and date],
*(3) The following items are excluded from this Final Certificate in accordance with Sub-clause 38.2 of the General Conditions:

Sample Acceptance Certificate
(a) .......................
(b) .................................
*(4) This is the last Final Certificate to be issued under the Subcontract.
Signed:..........................................................
Name: ...........................................................
Contract Manager
* If this is the last Final Certificate, (3) should be deleted. If this is not the last Final Certificate, (4) should be deleted.

Index
Abbreviations used under the heading ‘other’ are as follows: Agt. = Agreement; App. = Appendix; GN = Guide Note; IN = Introductory Note;
Sch. = Schedule; Specn. = Specification.
Clause Page Other Page
A
Acceptance, definition 1.1 7
Acceptance Certificate: 1.1,36 7,46
cancellation of 33.12 41
access to Site:
by Contractor and Contract Manager 23.5 31
by Subcontractor 23.1, 33.13 31,42
accuracy of data, Contractor’s responsibility for 6.2 14
additions. See Variations
adjudication 47 58 GN F 73
Affiliate 1.1,30.10 7,36
Agreed Rate 1.1 7 Sch. 19 70
Agreement:
guidance on completing GN 61
Alcohol 26.6 33
Approved Programme: 13 21 Sch. 11 67
definition 1.1 7
provision of 13 21
arbitration 49 59 GN F 73
assignment and sub-subcontracting 9 17 Sch. 7 66
audit 40 49
B
bankruptcy, Subcontractor’s default 44.1 53
bank’s base lending rate 7
1.1
c
cancellation certificate 33.12 41
cancellation of Acceptance Certificate 33.12 41
care of the Works 30 35
Certificate:
Acceptance 1.1, 36 7,46
Construction Completion 32 39 Sch. 14 68
Default 44.6 54
Final 1.1, 38 7,48
for payment of Subcontract Price, instalment 41.4 49
Take Over. See Take Over Certificate
Termination 43.5-43.8 52-53
Documentation required by law or the 27.5 34
Contract
change of law 7.3 15
to Contractor 3.5 12
communication to be in writing 1.6 10
completion of construction 32 39 Sch. 14 68
completion times 13 21 Sch. 11 67
conditions of employment 28.1 34
Confidential Information: 20.1 27 GN B 72
confidentiality: 20 27 GN B 72
obligations of Sub-subcontractor 9.6 17
consent under contract, refusal or delay of 1.4 10
construction, completion of: 32 39
by sections 32.1 39 Specn. 62
criteria for 32.2 39 Sch. 11, Sch. 14 67 68

Construction Completion Certificate: draft
endorsement 32.2 32.7 39
issue 32.6 39
construction method statements 26.2 39
contemporary records Contractor: 4.3,16.8 33
13, 25
definition 1.1 7 Agt. 4

indemnity of Subcontractor re 8.5 16
Documentation
protected rights, payment of fees 8 15
responsibilities 4 12
responsibility for payment 41.5 49
taking over of Subcontract Plant 33 40
termination of Subcontract by 43,44 52,53
Contractor’s election to accept Plant 36.5 46
cooperation 2 11
copyright, patent and other protected rights 8 15 GN B 72
Cost, definition 1.1 7
cost of repeat tests 22.7 30
costs, Contractor to keep records of 4.3 13
D
damage to property of and injury to third parties 30.15 37 GN D 73
damages, liquidated:
for delay 15,45.1 23, 56 Sch. 12 67
for failure of performance tests 35.12-35.15,45.1 45, 56 Sch. 17 69
damages, general for failure of performance 35.14, 35.15 45
tests
day 1.5 10
Decisions: 1.1,5 713
challenges to 5.2 13
deductible, insurance 31.1 37
default by Subcontractor 44 53
default certificate 44.6 54
Defect:
definition 1.1 7
liability for 37 46 GN E 73
limitation of Subcontractor’s liability 37.12 48
definition of terms 1.1 7
delay, damages for 15 23 Sch. 12 67
delays and extensions of time 14 22 Sch. 11 67
delivery to Site 24 32
description of Subcontract Works Sch. 1 62
design standards and codes Sch. 1, Sch. 6 62,
dispute: 44 53
adjudication 47 58 GN F 73
arbitration 49 59 GN F 73
mediation 46.7 57 GN F 73
reference to an Expert 48 58 GN F 73
dispute resolution GN F 73
Documentation: 21 28 Sch. 2 63
Subcontractor’s responsibilities on approval 21.3 28
copyright of 8.7 16
definition 1.1 7
delivery of on termination 41.4 49
errors in 21.12-21.14 29 Sch. 2 63
excluded from inspection 21.6 29 Sch. 2 63
Final, and manuals 21.9 29
for approval 21.2 28 Sch. 2 63
for information only 21.7 29 Sch. 2 63
not available to Project Manager 21.6 29
Contractor’s responsibilities 4.1 12
80 Copyright (© 2013 Institution of Chemical Engineers

Documentation: (Continued) rejection 4.7 13 15 GN B
8.1
updating drugs
1.1, 31.3-31.4, 38 7 38,48
6.2
1.1,41.5-41.8 14
7 49-50
E 21.12-21.14
27.2 29 34 Sch. 2
earthquake, force majeure environment
26.3, 272 33, 34
Environmental Impact Assessment environmental 14
1.1 7 22 GN F
legislation Equipment, Subcontractor’s. See
48
1.4.2-4.5 58
712-13 GN F
Subcontractor’s Equipment
24.1
14.1 22 32
errors, arising from work by Contractor or others
45.2 56
errors, in data supplied by Contractor
errors, in Documentation
Expert,
definition
reference to 2 11
9.3 17
extensions of time
‘exclusive remedies’ clause 35, 36 43,46 Sch. 16, Sch.
F
fees, royalties Final Certificate Final Date for Payment
firefighting equipment first aid 26.2 33 Sch.5
Force Majeure 26 33
Free-issue materials 26.1 33 Sch. 4
Free-issue materials, delivery to Site 26.5 33
G 28.5 35
good relations
guarantee, from Sub-subcontractors guarantee,
performance
H 47 58
hazardous materials health and safety and 49 59
environment health and safety legislation health and 48 58
safety supervisor, 12.5, 28.4 20, 35
Subcontractor’s hours
of work at Site 30.4, 30.6, 30.9, 30.10, 36,37 GN D
30.12, 30.13, 30.15
/ 30.5,30.7,30.11, 30.14 36,37
IChemE: 30.11, 30.12, 30.14 36,37
appointment of an adjudicator 30.10, 30.11, 30.15 36,37 GN D
appointment of an arbitrator appointment 22 30 Sch. 13
of an Expert incompetence of 41 49 Sch. 19
Subcontractor’s staff indemnification: of 31 37 GN D
Contractor 31.1, 31.2 37,38 GN D
31.1 37 GN D
of Subcontractor of Sub-
31.4 38 GN D
subcontractors injury, liabilities for
inspection and pre-installation tests
instalments of payment insurance: joint
names
of Materials, Temporary Works and Plant of
third parties
Clause Page Other
21.4 28
21.11 29
26.6 33
14.6 23
33 Sch.5
26 Sch.5
26.1 33 Sch.5
Copyright© 2013 Institution of Chemical Engineers

Clause Clause
Page Other Page Page
Other Page
insurance: (Continued) Special condition may be required:
of employees If Documents are not to be shown
31.5to the 38 GN D 73 Sch. 2 63
Contract Manager
professional indemnity, not required 31.6 38
interpretation of Subcontract If liquidated damages for delay1.2-1.9
shall not apply Sch. 12 67
10-11
but general damages do apply, or there are no
K
Performance Test Period
damages for delay
1.1 time 7
If the Subcontractor requires more Sch. 15 68
key personnel, Subcontractor’s 12.4 20 Sch.8 66
performance
knowledge oftests. See tests, performance
Site conditions to carry out further design and6.3
engineering work 14
Photographs 20.4 28
If the arrangements in Schedule 20 are inconsistent
permission to use Site for constructing and 7.1 14
with Sub-clause 1.6 a Special Condition to amend Sch. 20 70
L
operating Plant Sub-clause 1.6 will be
pollution
labour, Site working conditions 26.7
28 33
34
law, change of tests, and inspection
pre-installation 7.3 15
30
necessary. 22
levels, setting
premiums out
for insurance 3.3
31.7 38
12 GN D 73
Subcontractor’s warranty GN A 72
Price,
liability:Subcontract, See Subcontract Price
Contractor’s right to review design work GN A 72
for Defects
profit 37
1.1,18.3of the 46
7, 26 GN E 73
adjudication should apply irrespective GN F 73
Project Manager:
limitation of Subcontractor’s 45
11 Special conditions 19
56 GN E 73
exemptions provided by the Act
definition
licensed technology 1.1 7 GN A,GN B 72
liquidated rights,
protected damages for delay
patents, etc. 15,45.1 1.123,
15 56 Sch.
GN B12 7 72 Agt Para 1(b)
67 4
precedent 8 Specn.
Purchaser, definition 1.27 10 62
loss or damage: 1.1 7
to Materials, Temporary Works,Specification, definition
and Plant 30.4 1.136
staff, Subcontractor’s. See Subcontractor’s staff
Q third party injury or damage to property 30.15
start-up, preparation for start-up, Contractor to
37
Sch. 1 62
See also Insurance GN D 73
quality assurance Subcontract: 3.8 33.7
12 Sch.6 40 65
quality assurance, training on Sch.9 66
M assurance system
quality Sch.6 65 IN 3
2
Main Contract: back to back breach of, by Contractor 14.4 23
R definition 1.1 42 7 51
particulars Sch. 20 70
records: breach of, by Subcontractor Conditions Agt. Para 1 4
related issues coordination 50 5 60 13
to be kept by Contractor 4.3 13
Main Contract Plant:
Representative, Contract Manager’s
definition 11.4-11.6 1.119-20 7
Definition
rights, patents, etc. interpretation of 1.1 1.2-1.9
7
15 GN B 10-11 72
8
Main Contract
rights Works:
of third parties termination by Contractor for convenience
9.8 43 17 52
Definition
risk: termination for Purchaser’s default
1.1 44 7 53
Subcontract Works for part
assessment of
Subcontract 3.10
Manager, Subcontractor’s
26.2 Subcontract 12
12 33 20
maintenance
care of Works of Site, buildings, equipment, etc.
Materials: 27.3
30 34
35 GN D 73
making good Defects, cost of
insurance 37.3
31 46 GN
GN E 73
Definition 1.137 D 7 73
manuals 21.9 29 Sch. 2 63
third party delivery to Site 30.15 24 37 GN D 32 73
Mediationetc.
royalties, Free-issue, provision of 46.7 4.257
15 GN
GN F
B 73
72
8 12
meetings: inspection and tests 29 35 30
Rules for conduct of dispute resolution 47.2,48.1,49.2 22 58, 59 GN F 73 Sch. 6, Sch. 13 65,68
records of
procedures insurance of 29.2-29.3 35
31.1-31.2 37-38 GN D 73
misconduct ownership of 12.5, 28.4 25 20, 35 32
mistakes, in Documentation 21.12-21.13 2927.1 Sch. 2 63
s
mistakes, in information supplied
provision of
by Contractor
removal from Site
4.2,
34 14
12,34
42 Sch. 5 64
6.2
safety: 34.5 42
during performance tests surplus 35.9 44
N elimination of hazards Subcontract Plant 17.4 26 32
nominated Sub-subcontractors 13.1, Sch. 7 21,39 Sch. 14
of Site 10
26 18
33 Sch.4 66
64 68
of Subcontract Plant Completion of compliance: 33.7 40
with Subcontract 3.4
0 regulations with statutes 26 33
7.114
Sch.4 12
14
64
obligations,
training statutory 7
26.4 33
Definition 1.130 7
off-Site tests
Section 22
1.1 7
insurance of 31.1 37 GN D 73
operation
setting outof Subcontract Plant after Take Over 33.7
3.3 40 Sch. 15 68
operation, training on 3.912 12 Sch. 9 66
Site:
ownership of Subcontract and Free-lssue 23
25 31
32
Materials operation of Subcontract Price: 33.7 40 Sch. 15
access 23.1, 23.5 31 68
clearance 34 42
extra cost as a result of suspension by Contract 42.4 51
P conditions, knowledge of Manager 6.3 14
definition 1.1 7
Parts with limited working life law, change of 37.11 7.348 Sch. 10, GN15
E 66,73
patent infringement
delivery to 8.3
24 15 GN B 72
payment of Subcontract Works:6.3 39 32 48 Sch. 19 70
knowledge
patent rights of conditions 14
15 GN B 72
8
maintenance and cleaning of
payment: 27.3 34
Care of the 30 35 GN D 73
possession of
insurance premiums by Subcontractor 23
31.7 31
38 GN D 73
roads definition 27.2 1.1,7
34 714
on termination 43.8,44.11 3.253, 55
routes to 23.2 31 11
Subcontract Price 41
standard, of carrying out Subcontractor: 49 Sch. 19 70
rules
terms ofand regulations 26.4
41 33 Sch. 19
4, 5 64
44 49 Sch. 70
default 53
services and
performance buildings
limits 27
35.12 34
45 Sch. 17 69 Agt.
definition 7 4
working conditions 28 1.134
Site Manager 12.2 20 Sch.8 66
Software:
ApplicationsCopyright© 2013 Institution of Chemical Engineers1.1,8.9-8.10 716
Subcontractor’s 1.1, 8.9-8.10 7,16
Third Party 1.1,8.9-8.10 716
Subcontractor: (Continued) 20.2 27 GN B
liability for Defects limitation of Sch.8
12 20
liability possession of Site
Subcontractor’s Equipment: 17 25 GN C
definition
Subcontractor’s obligations: after 41.3 49
Final Certificate after Termination 1.1 7
Order assignment Confidentiality 30.11, 30.12, 30.14 36,37 GN D
force majeure insurance keeping 31.1 37 GN D
of records nominated Sub- 10 18 Sch.7
subcontractors patents 9.4 17
progress reports setting out Site services 28 34
Site working conditions Sub-subcontracting 12 20
Subcontractor’s personnel, details of
Subcontractor’s staff: confidentiality 41.9 50
Subcontractor’s Subcontract Manager and 42.1 51
staff
Subcontractor’s Variations Sub-subcontractor: 42 51
cessation of work by definition indemnification Clause Page
Other
of insurance nominated payment to
working conditions at Site supervisory staff
suspension:
due to Contractor’s non-payment of 1.1,33.7 7,40
33.12 41
Subcontractor’s performance by Contract
36.1 46
Manager of the Subcontract Works
33.13 42
7 13.1, 33 21,40 Sch. 15
33 40
Take-Over Certificate: cancellation of
33 40
Acceptance deemed to be an Acceptance
GN B
Certificate Subcontractor’s right of access after
take-over procedures take-over tests taking-
over 30.3-30.8 35-36
technology development Temporary Works: 1.1 7
care of, and indemnity for loss, damage 27.6,34.1 34,42
definition 31.1 37
dismantling, removal insurance 43.4 52
rights on termination use on termination for 44.3 54
Sch 7
default subcontracting to named specialists
termination:
by Contractor for convenience by 43 52
Subcontractor 41.10 50
by Subcontractor after Suspension Order 42.5 52
37 46 GN E
45 56 GN E
23.1 31
24, 27 32,34
1.1 7
3 11
38.3 48
43 52
9 17
20 27 GN B
14 22
31.2-31.4 38 GN D
3.719.1 12, 27
10 18
8 15 GN B
3.7 12
3.3 12
27 34
28 34
9 17 Sch.7
13.4 21
12 20 Sch.8

termination: (Continued)
for Subcontractor’s default 44 53
result of Force Majeure 14.9 23
Termination Certificate 43.5 52
Termination Notice 43.1 52
terms, definition of 1.1 7
tests:
performance: 35 43 Sch. 16 69
of specified sections 35.2, 36.2 43,46 Specn. 62
waiver of Subcontractor’s obligations 36.5 46
pre-installation 22 30
take-over 33 40 Sch. 15 68
take-over, after rectification of Defect 37.4 47 GN E 73
third party risks 30.15 37 GN D 73
Third Party Software 1.1,8.9-8.10 7,16
time, delays and extension of 14 22
times of completion 13 21 Sch. 11 67
training:
by Subcontractor 3.9 12 Sch. 9 66
Contractor to provide personnel for 4.6 13 Sch. 9 66
transport:
access to Site 23.2 31 Sch. 1 62
denial of use, Force Majeure 14.6 23
V
validation 3.8 12 Sch. 6 65
valuation of variations 18 26
Variations: 16 24 GN C 72
definition 1.1 7
extension of time for 14.4 23
regarding nominated Sub-subcontractor 10.4 18
Subcontractor’s 3.5,17 12, 25 Sch. 18, GN C 69,72
valuation of 18 26 Sch. 18 69
visitors to Site 23.6 32
w
wages 28.1, 28.3 34
waste materials 27.3 34 Sch. 5 64

Forms of Contract
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The Brown Book
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The Orange Book
Adjudication Rules
The Grey Book
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The Pink Book
Rules for Expert Determination

The White Book
Rules for Dispute Review Boards

The Beige Book
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Form of Contract

The Yellow Book

Fourth edition 2013

All rights reserved. No part of this publication may be reproduced,

A licensed electronic version is available to those wishing to

Typeset by Techset Composition Ltd, Salisbury, UK

Printed by Bell & Bain, Glasgow, UK

General Conditions of Subcontract

46. Disputes Specification and the Schedules

Gordon Bateman (Chairman) Paul Buckingham David McLurgh

Copyright© 2013 Institution of Chemical Engineers 1

2 Copyright © 2013 Institution of Chemical Engineers

In GT Contract not in yellow book

Copyright© 2013 Institution of Chemical Engineers 3

THIS SUBCONTRACT AGREEMENT provides as follows:

(a) This Subcontract Agreement.

(b) The Subcontract Conditions, comprising:

(c) The Subcontract Specification. And invitation to tender dated ????

(d) The Schedules:

5. The Subcontractor’s liability in respect of:

Address: [full postal address]

The Subcontractor: For the attention of: [name and/or position]

SIGNED by the duly appointed representatives of the parties:

1. Definitions, interpretation, waiver and Notices

Availability test has the meaning in schedule 15 (Take over procedure)

Boiler Supplier means Outotec USA Inc

Commissioning requirements means the purchaser requirements for the commissioning of

‘Confidential Information’ has the meaning stated in Sub-clause 20.1.

‘Construction Completion Certificate’ has the meaning stated in Sub-clause 32.2.

‘Contract Manager’s Representative’ has the meaning stated in Sub-clause 11.4.

‘Contractor’s Risk’ means

‘Default Certificate’ has the meaning stated in Sub-clause 44.6.

a) normal wear and tear

Delay liquidated damages had the meaning stated in sub-clause 15.1

‘Documentation’ means any relevant documents in paper or electronic form, including

DNO means the distribution network operator northern powergrid

Environmental permit means the environmental permit to be issued by the

9 Copyright © 2013 Institution of Chemical Engineers

‘Expert’ means a person referred to and so called in Clause 48 (Reference to an Expert).

Feedstock supplier means JM envirofuels (Hull) Ltd

‘Final Certificate’ has the meaning stated in Sub-clause 38.1.

c) in a draft statutory instrument or

d) as a proposal in the official journal of the European union

on or before the notice to proceed under the main contract

‘General Conditions’ means these General Conditions of Subcontract.

Latent defects means a defect which is a defect (subcontractor fault) in or relating to

10 Copyright :© 2013 Institution of Chemical Engineers

‘Notice of Adjudication’ means a Notice as described in Sub-clause 47.2.

‘Notice of Arbitration’ means a Notice as described in Sub-clause 49.1.

‘Notice of Dispute’ means a Notice as described in Sub-clause 46.4.

Copyright© 2013 Institution of Chemical Engineers 11

‘Profit’ shall be as defined in the Subcontract Agreement.

Project documents means the documents referred to in the related obligations

which the purchaser has entered into or will enter into

‘Purchaser’ means the person named as such in the Subcontract Agreement.

comply with as set out under schedule 23

acknowledge as set out in schedule 23

‘Section’ means a part of the Subcontract Plant identified in the Subcontract as a