CIF Contract (GAFTA 48)

CONTRACT No. [number]¹

Date: [date]²

The Seller: [company name]³, a legal entity incorporated under the laws of [state]⁴, official address: [address]⁵, represented by [signatory]⁶, on one side, and

The Buyer: [company name]⁷, a legal entity incorporated under the laws of [state]⁸, official address: [address]⁹, represented by [signatory]¹⁰, on the other side,

(Buyer and Seller together further referred to as the “Parties” and “Party” separately)

have concluded the present Contract No. [number]¹ of [date]² (hereinafter — the “Contract”) on the following:

1. Subject matter of the Contract

1.1. In accordance with the provisions of the present Contract, the Seller shall deliver and the Buyer shall accept and pay for the Goods — [commodity]¹¹, origin — [origin]¹², crop [year]¹³, [other essential elements of commodity, if any]¹⁴ (hereinafter — the “Goods”).

2. Quantity

2.1. [amount]¹⁵ metric tons +/- [tolerance]¹⁶ % at the Seller’s option.

2.2. The quantity shall be final at the time and place of loading as per the Certificate of Weight issued by a GAFTA-approved surveyor at the Seller’s choice and expense. Weight to be determined based on official shore scale figures in accordance with GAFTA Weighing Rules No. 123.

2.3. The Buyer has the right to nominate a GAFTA-approved surveyor at their own choice and expense to supervise weighing and/or loading operations at the port of loading. The Seller shall ensure full access of the Buyer’s surveyor to the weighing and/or loading operations.

3. Price and delivery basis

3.1. The price of the Goods is [currency]¹⁷ [sum]¹⁸ ([sum in words]¹⁹) per metric ton.

3.2. Delivery basis: CIF, one safe berth one safe port — [discharging ports]²⁰ (always afloat, always accessible), at the Buyer’s option.

3.3. The exact port of discharge to be nominated in writing by the Buyer to the Seller at the latest upon completion of loading of the vessel.

4. Quality of the Goods

4.1. Quality specification: [quality parameters]²¹

4.2. The Goods shall be of sound, loyal and merchantable quality, free from alive insects and foreign smell, with natural colour, not mouldy, not musty.

4.3. Quality, condition and description of the Goods shall be final at the time and place of loading as per the Certificate of Quality issued by a GAFTA-approved surveyor at the Seller’s choice and expense. The Buyer has the right at their own cost to be present and/or represented at the loading port and has the right to take samples co-jointly but not to interfere with the loading. The Seller is not obliged to stop the loading due to the absence of the Buyer’s surveyor. In any case the Seller’s survey certificates are final and binding.

Sampling, analysis and certificates of analysis as per GAFTA 124.

5. Shipment period

5.1. Shipment between [date]²² and [date]²³, both dates included, at the Seller’s option.

5.2. Vessel requirements: bulk carrier or general cargo type single decker vessel, geared; in any case in all respects suitable for cargo operations at the nominated port. No sanctioned vessel, in particular no vessel on the OFAC lists. [to specify if required]²⁴

5.3. Pre-advice: the Seller will give notice in due time but at least 3 (three) working days before the vessel’s ETA at the loading port to allow the Buyer to be represented at loading for inspection of the weight and quality of the Goods.

6. Documentary instructions

6.1. The Buyer must give full and final documentary instructions indicating the port of discharge and other relevant information for issuance of all contractual documents within 2 (two) calendar days after receipt of the vessel nomination, but no later than loading begins. The documentary instructions shall be in accordance with the terms of this Contract.

6.2. The Buyer shall confirm the drafts of the shipping documents within 1 (one) calendar day after their receipt, but no later than the completion of loading. If the Buyer fails to confirm the drafts, the Seller has the right to issue the shipping documents on the basis of this Contract and the documentary instructions.

6.3. Any cost and/or consequences due to delay in presentation or failure to present documentary instructions, or failure to confirm the drafts of all contractual documents, are for the Buyer’s account, time and responsibility.

7. Notice of appropriation

7.1. The notice of appropriation shall be served at the latest within 3 (three) business days from the date of the bill of lading by or on behalf of the Seller, direct to the Buyer or to the selling agent or broker.

7.2. The notice of appropriation shall state the vessel’s name, the port of loading, the presumed weight shipped, and the date or the presumed date of the bill of lading.

8. Transfer of title and risk

8.1. Title to the Goods shall pass to the Buyer only when 100% of the cargo value is received to the Seller’s account.

8.2. Risk of damage or loss of the Goods shall pass to the Buyer when the Goods cross the ship’s rail at the port of loading.

9. Terms and conditions of payment

9.1. The Buyer shall pay 100% of the value of the Goods without any deduction, offset or counterclaims to the Seller’s bank account within [term]²⁵ banking days against presentation to the Buyer of scan copies of the shipping documents listed below, but in any case before breaking bulk.

It is clear to the Buyer and the Seller that timely payment is a condition of the Contract.

9.2. The shipping documents shall include:

1. commercial invoice, stamped and signed;
2. full set of 3/3 originals of the bills of lading, marked “Freight Prepaid” or “Freight Payable as per CP”, plus 3 (three) non-negotiable copies;
3. certificate of origin issued by the local Chamber of Commerce or EUR-1 certificate issued by the competent official authorities in the country of origin of the Goods as per the Buyer’s instructions;
4. quality certificate issued by a GAFTA-approved surveyor at the Seller’s choice and expense;
5. weight certificate issued by a GAFTA-approved surveyor at the Seller’s choice and expense;
6. phytosanitary certificate issued by the competent authorities in the country of origin of the Goods;
7. marine insurance policy covering the whole voyage, provided by the Seller, for [per cent]²⁶ % of the CIF value of the Goods, covering All Risks, War Clauses (Cargo) and Strikes Clauses (Cargo), Cargo Clause A; other insurance conditions as per GAFTA 72. Insurance to be covered by companies of good standing at the Seller’s choice. If the Seller’s insurance cannot cover the required extent for the whole voyage, then the above listed risks will be on the Seller throughout the entire time until the discharge of the cargo at the POD;
8. [any other document required]²⁷

9.3. Third-party documents (except the commercial invoice) and e-certificates are acceptable.

9.4. All shipping documents shall be issued in English or in dual/multiple languages, one of which shall be English.

9.5. The payment is considered to be effected after receipt of 100% of the value of the Goods to the Seller’s bank account.

9.6. The Buyer has no right to commence discharging operations until the payment is received in full to the Seller’s bank account. After receiving 100% of the value of the loaded Goods, the Seller will tender the originals of the shipping documents to the Buyer in accordance with the Buyer’s instructions.

9.7. In the absence of the original documents at the port of discharge, upon receipt of the full cargo value the Seller shall allow discharging against a letter of indemnity (in P&I Club’s wording) provided by the Seller / charterer of the vessel and countersigned by the Buyer / receiver, if necessary. This shall not cause any prejudice to the Buyer’s right to receive the full set of original shipping documents, including the original bills of lading, under this Contract.

9.8. Legalisation of documents is not required; non-legalised copies of documents are sufficient for payment to be made. Legalisation of documents, if required by the Buyer, shall be for the Buyer’s time and account.

9.9. All bank charges in the Buyer’s bank are for the Buyer’s account. All bank charges in the Seller’s bank are for the Seller’s account.

10. Duties, taxes, licences

10.1. Any costs at the loading port and in the country of origin, and any export licence, duties and taxes on the Goods shall be for the Seller’s account.

10.2. Any costs at the port of discharge and in the country of destination, and any import licence, duties and taxes on the Goods shall be for the Buyer’s account.

11. Discharging

11.1. The Buyer guarantees a minimum discharging rate of [amount]²⁸ metric tons within 24 consecutive hours of a weather working day, SSHEX EIU.

11.2. NOR shall be tendered at the port of discharge between 08:00 and 17:00 hours local time on all days except Saturdays, Sundays and holidays, WIPON, WIFPON, WICCON, WIBON.

Laytime starts to count the next working day at 08:00 after a valid NOR is tendered. Time from Friday (or a day preceding an official holiday) 17:00 hours till Monday (or the next working day after an official holiday) 08:00 hours does not count as laytime, even if used. Holidays as per the BIMCO calendar, latest edition.

Once on demurrage, always on demurrage.

11.3. Demurrage, detention and despatch rates are as per the charter party, booking note or fixture recap. Demurrage and despatch rates will be advised along with the vessel nomination.

Demurrage, detention and despatch to be settled within 15 working days after discharging on the basis of the SOF and NOR duly signed by the ship’s agency. The invoice for demurrage, detention or despatch shall be based on a laytime calculation mutually agreed between the Parties and paid within 10 working days.

11.4. All discharge costs are for the Buyer’s account. Any demurrage or detention arising at the port of discharge due to the Buyer’s delay in payment is for the Buyer’s account and responsibility.

11.5. The vessel’s agent at the port of discharge is to be nominated by the Buyer and paid by the shipowner. The Seller has the right to be present and/or represented at the discharging port.

11.6. All other terms and conditions not conflicting with the terms of the Contract — as per the relevant charter party or fixture recap.

12. Fumigation

12.1. The Seller to fumigate the cargo by the Seller’s appointed GAFTA-recognised fumigation company, at the Seller’s cost, using aluminium phosphide tablets in accordance with the GAFTA fumigation rules. In the event specific fumigation methods or types are requested by the Buyer, such as recirculation and/or sleeves, then the additional costs of such fumigation method or type are for the Buyer’s account at loading, including the costs and time for removal and utilisation of the fumisleeves and/or recirculation equipment at discharging.

13. Shortage

13.1. Any shortage over [norm]²⁹ % of the bill of lading weight will be covered by the Seller or the Seller’s insurance company. A shortage above that allowance, determined at the port of discharge under the supervision of a GAFTA-approved surveyor nominated at the Buyer’s cost, is for the Seller’s account, subject to:

• the weight being determined at the time and place of discharge from the vessel;
• weighing at discharge being carried out as per GAFTA Weighing Rules No. 123;
• the following supporting documents being duly issued, signed and sent by the Buyer to the Seller within 10 (ten) working days after the completion of discharge:

1. weight certificate issued by a GAFTA-approved surveyor nominated at the Buyer’s cost;
2. truck / weight list from a GAFTA-approved surveyor, if cargo weighing is arranged by weighing trucks in empty and loaded condition;
3. unsealing report or certificate from the discharge, duly signed by a GAFTA-approved surveyor;
4. Statement of Facts, duly signed by the agents and the Master of the vessel;
5. debit note or invoice with bank details and the calculation of the shortage amount;
6. scale calibration certificate from the POD;
7. empty holds certificate.

The Seller is entitled to nominate its own surveyor for the supervision of the discharged weight.

14. Confidentiality

14.1. The Parties shall treat the terms of this Contract as strictly confidential and shall not disclose them to third parties except:

• 14.1.a. where necessary for enforcement or compliance purposes;
• 14.1.b. to legal, accounting or financial advisors bound by confidentiality; or
• 14.1.c. as required by applicable law or regulation.

15. Applicable law and incorporated terms

15.1. All other terms, not in contradiction with this Contract, are contained in GAFTA Standard Contract No. 48 in the edition effective at the date of this Contract. The Parties confirm their knowledge and understanding of GAFTA Standard Contract No. 48.

15.2. This Contract shall be governed by the laws of England and Wales.

16. Sanctions

16.1. The Seller and the Buyer shall comply with all binding resolutions, trade, economic and/or financial sanctions and/or embargoes applicable to the performance of its obligations by that Party under this Contract (“Sanctions”).

16.2. Neither the Seller nor the Buyer shall do, or omit to do, any act which causes the other Party to be in breach of any Sanctions.

16.3. The Seller has the right to reject any destination, transit country, vessel, document, payment, person or entity, and the Buyer has the right to reject any country of origin, vessel, document, payment, person or entity that would, in each case, cause the Seller or the Buyer (respectively) to breach any Sanctions.

16.4. The Seller agrees that the Goods will not directly or indirectly originate from, be provided by, or be transported in a vessel, or with any carrier, owned, operated, controlled, flagged or chartered by any country, person or entity which would cause the Buyer to breach Sanctions.

16.5. The Buyer agrees that the Goods will not be resold to, or transit through a destination, person or entity, or be transported on a vessel or with a carrier owned, operated, controlled, flagged or chartered by any country, person or entity which would cause the Seller to breach Sanctions.

16.6. The Seller and the Buyer agree to co-operate with any requests for information made by the other Party, to the extent reasonably necessary for that Party to verify compliance with this Clause.

16.7. Where either Party (“Defaulting Party”) does, or omits to do, any act which causes the other Party (“Non-Defaulting Party”) to be in breach of any Sanctions, the Non-Defaulting Party may, by written notice, immediately terminate this Contract without any further liability to the Defaulting Party, however without affecting any other shipment or contract. Such termination shall be without prejudice to any rights and obligations existing prior to termination.

16.8. The Defaulting Party shall indemnify and hold the Non-Defaulting Party fully harmless in the event of loss or damage suffered by the Non-Defaulting Party, its principals or affiliates as a result of any breach, whether intentional or not, of the above-mentioned Sanctions by the Defaulting Party.

17. Arbitration

17.1. Any and all disputes arising out of or in connection with the present Contract or any claim regarding the interpretation and/or execution of the present Contract shall be determined by arbitration in accordance with GAFTA Arbitration Rules No. 125, in the edition current at the date of the Contract; such Rules are incorporated into and form part of this Contract and both Parties hereto shall be deemed to be fully cognisant of and to have expressly agreed to the application of such Rules.

17.2. Nothing contained in this Arbitration Clause shall prevent the Parties from seeking to obtain security in respect of their claim or counterclaim via legal proceedings in any jurisdiction, provided such legal proceedings shall be limited to applying for and/or obtaining security for a claim or counterclaim, it being understood and agreed that the substantive merits of any dispute or claim shall be determined solely by arbitration in accordance with GAFTA Arbitration Rules No. 125 or No. 126, depending on the amount of the arbitration claim, both in the edition current at the date of this Contract; such Rules are incorporated into and form part of this Contract and both Parties hereto shall be deemed to be fully cognisant of and to have expressly agreed to the application of such Rules. Where all the arbitration claims under the sales contract are in excess of the amount of EUR 60,000, Rules No. 125 shall apply; if all such claims are below EUR 60,000, the arbitration shall be conducted in accordance with GAFTA Rules No. 126.

The Parties have agreed that they may engage legal representatives (i.e. a solicitor and a barrister, or other legally qualified advocate or advisor, wholly or principally engaged in private practice) to represent them in the arbitration and/or in any appeal proceedings and to appear on their behalf at any oral hearings. The Parties agreed that the costs of engaging representatives shall be reimbursed by the guilty Party.

17.3. Language of the proceedings — English. Arbitration shall take place in London, England.

18. Final terms

18.1. This Contract is made in two copies, having equal legal force, one original for each Party. This Contract is executed in two languages, English and Ukrainian. In the event of any discrepancy, inconsistency or divergence in interpretation between the two versions, the English language version shall prevail.

18.2. Scanned and emailed copies of this Contract signed by both Parties shall be valid. The Parties hereby represent and warrant to each other that the individuals whose signatures appear in this Contract have full legal and valid power and authority vested upon them by each respective Party to execute this Contract for and on behalf of such Party, and each Party further confirms and agrees that this Contract is entered into in reliance on such representation. The validity of this Contract will not be affected by the non-return of the counter confirmation duly signed.

19. Legal addresses and requisites of the Parties

19.1. The Seller: [company name]³

Address: [address]⁵

Seller’s Bank: [details]³⁰

Director: [name]³¹

19.2. The Buyer: [company name]⁷

Address: [address]⁹

Buyer’s Bank: [details]³²

Director: [name]³³

On behalf of the Seller / Від Продавця: _________________________

On behalf of the Buyer / Від Покупця: _________________________

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