GAZETTE NOTICE NO. 6897

take notice that a petition for a grant of letters of administration intestate to the estate of the above- named deceased, who died at Makongeni Location, on 23rd August, 1997, has been filed in this registry by (1) Joseph Ngigi Gitau and (2) Rahab Wacera Thuo, both of P.O. Box 3868, Thika, in their respective capacities as son and daughter-in-law of the deceased. And further take notice that objection in the prescribed form to the making of the proposed grant are invited and must be lodged in this registry within thirty (30) days of publication of this notice. And further take notice that if no objection has been lodged in this registry in the prescribed form within thirty (30) days of the date of publication of this notice, the court may proceed to make the grant as prayed or to make such orders as it thinks fit. Dated the 30th March, 2012. B. M. NZAKYO, R/9577845 District Registrar, Githunguri. GAZETTE NOTICE. NO. 6898 THE BANKRUPTCY ACT (Cap. 53) RECEIVING ORDER AND FIRST CREDITORS‘ MEETING (Under Rule 145 of the Bankruptcy Rules) Debtor’s name.—Vinodray Rajshibhai Bharadva. Address.—P.O. Box 34041–80100, Mombasa. Description.—Businessman. Date of filing petition.—12th April, 2012. Court.—High Court of Kenya at Mombasa. Date of order.—13th April, 2012. Cause No.—2 of 2012. Whether debtor’s or creditor’s petition.—Debtor‘s petition. Act or acts of bankruptcy.—Inability to pay debts. Date of creditor’s meeting.—29th May, 2012. 18th May, 2012 THE KENYA GAZETTE Venue.—NSSF Building, 9th Floor, Room 25, Nkrumah Road, Mombasa. Time.—10.00. p.m. Last day of filing proof of debt forms.—28th May, 2012 at 4.00 p.m. Dated the 4th May, 2012. T. A. O. OGWENO, MR/9600112 Deputy Official Receiver, Mombasa. GAZETTE NOTICE. NO. 6899 PART I THE ENERGY ACT (No. 12 of 2006) PROPOSED REGULATIONS IN RESPECT OF THE PET ROLEUM DOWNSTREAM SUB -SECTOR INVITATION OF PUBLIC COMMENTS 1. PURSUANT to section 110 (3) of the Energy Act, 2006, the Energy Regulatory Commission hereby invites members of the public to submit written comments within forty (40) days from the date of publication of this notice to the Director General, the Energy Regulatory Commission, on the proposed Regulations in respect of the Petroleum downstream sub-sector which are set out in Part II hereunder. 2. Comments may be hand-delivered, posted, and facsimiled or e- mailed to the Energy Regulatory Commission. 3. Physical address: The Energy Regulatory Commission, First Floor, Eagle Africa Centre, Longonot Road, Upperhill, Nairobi 4. Postal address: P.O. Box 42681–00100 GPO, Nairobi 5. Facsimile Number: +254 20 2717603 6. E-mail address: info@erc.go.ke PART II THE ENERGY ACT (No. 12 of 2006) IN EXERCISE of the powers conferred by section 102 of the Energy Act, 2006 the Minister for Energy makes the following regulations: THE ENERGY (OPERATION OF PETROLEUM REFINING BUSINESS) REGULATIONS, 2012. 1. These Regulations may be cited as the Energy (Operation of Petroleum Refining Business), Regulations 2012. 2. These Regulations shall come into operation upon their publication in the Gazette. 3. These Regulations shall not apply to the Kenya Defence Forces. 4. In these Regulations, unless the context otherwise requires— ―Act‖ means the Energy Act, 2006; ―Commission‖ means the Energy Regulatory Commission. ‗‗Crude oil‘‘ means natural mineral oil, including condensate, but excluding petroleum products. ―Kenya Standard‖ means a specification or code of practice declared by the Council under section 9 of the Standards Act. ―Licence‖ means any document or instrument in writing granted under the Act by the Commission to any person authorizing the importation, exportation, refining, transportation, storage, distribution and sale of petroleum. ‗‗Licensee‘‘ means any person holding a Licence granted by the Commission. ―Market share‖ means the percentage of the total sales of each petroleum product in Kenya other than Bitumen attributable to a petroleum business licensee as determined by the Minister from time to time. ‗‗Petroleum‘‘ includes petroleum crude oil, natural gas and any liquid or gas made from petroleum crude oil, natural gas, coal, schist, shale, peat or any other bituminous substance or from any product of petroleum crude oil, natural gas and includes condensates. ―Petroleum products‖ means products derived from the refining of crude oil. ―Refine‖ means to process petroleum crude in a refinery in order to yield petroleum products. ―Refinery‖ means a distillation plant for refining petroleum crude to yield petroleum. ―Refinery user‖ means any person that has signed an off-take agreement with an operator of a petroleum refining business. ―Refinery operator‖ means a person licensed by the Commission to operate a petroleum refining business. ‗‗Tariff‘‘ means a written statement of rates, terms and conditions for refining services. 5. A person shall not engage in petroleum refining business except in accordance with the Act and the terms and conditions of a valid licence issued by the Commission or its agents. 6. (1) A refinery operator shall at all times ensure that the refinery operates in an efficient and cost effective manner. (2) An operator of a petroleum refinery shall operate and maintain the petroleum refinery in accordance with the requirements of the Energy Act, Physical Planning Act, Standards Act, Local Government Act, Environmental Management and Co-ordination Act, Occupational Safety and Health Act, Weights and Measures Act, Custom and Excise Act and any other written law; (3) An operator of petroleum refinery shall maintain the refinery in a fully operational condition. 7. (1) An operator of a petroleum refinery shall provide access to the refinery on non discriminatory terms to all petroleum business licensees. (2) Where capacity is limited an operator of a petroleum refinery shall allocate capacity among refinery users in proportion to their individual product market share. (3) An operator of a petroleum refinery shall not discriminate between refinery users regarding access, tariffs, prices and conditions of service. 8. An operator of a petroleum refinery shall have custody and be responsible for the crude and petroleum products from the time the crude oil is received by it to the time when the petroleum products are evacuated. 9. An operator of a petroleum refinery shall only charge the tariffs approved by the Commission. 10. (1) An operator of a petroleum refinery shall allow interconnections with the facilities of a petroleum business licensee provided that such interconnections are technically feasible. (2) Where the operator of a refinery refuses to allow an interconnection between the refinery and the facilities of a petroleum business licensee, it shall, within thirty (30) days notify the Commission and the licensee in writing of its decision not to allow the interconnection and the reasons for such refusal. 11. (1) A person who is aggrieved by a decision or action of the operator of a refinery may lodge a complaint with the Commission. (2) A complaint contemplated under this Regulation shall be submitted in the manner prescribed by the Act and shall be accompanied by: (a) Any information in support of the complaint; and (b) A description of efforts made to resolve the dispute before making the complaint to the Commission or its agents. (3) A person aggrieved by the decision of the Commission or its agents on a complaint may appeal to the Tribunal. 12. (1) An operator of a petroleum refinery shall enter into contracts with all refinery users regarding the refining services. (2) A contract between the operator of a petroleum refinery and a refinery user shall be subject to approval by the Commission. 13. A person who contravenes any of these regulations commits an offence and shall on conviction be liable to a fine not exceeding one million shillings or to a maximum term of imprisonment of one year, or to both such fine and imprisonment. KABURU MWIRICHIA, Director General, Energy Regulatory Commission. THE KENYA GAZETTE 18th May, 2012 1754 1754 THE ENERGY ACT (No. 12 of 2006) IN EXERCISE of the powers conferred by section 102(d) of the Energy Act, 2006 the Minister of Energy makes the following Regulations. THE ENERGY (IMPORTATION OF PETROLEUM) REGULATIONS, 2012 1. These Regulations may be cited as ―The Energy (Importation of Petroleum) Regulations, 2012‖. 2. In these Regulations, unless the context otherwise requires— ―Act‖ means the Energy Act, 2006; "Commission" means the Energy Regulatory Commission established under section 4 of the Act; ―Kenya Standard‖ means a specification or code of practice declared by the National Standards Council under section 9 of the Standards Act; ―Market share‖ means the percentage of the total sales of each petroleum product in Kenya other than Bitumen attributable to a petroleum business licensee as determined by the Minister from time to time. ‗‗Minister‘‘ means the minister for the time being responsible for energy. ―Petroleum‖ has its meaning as in the Act. ―Tribunal‖ means the Energy Tribunal established under section 108 of the Act; 3. (1) These Regulations shall apply to the importation of crude oil and petroleum products listed in Schedule A. (2) Nothing in these Regulations shall apply to the importation of petroleum by the Kenya Defence Forces. 4. A person shall not conduct any business of importation of petroleum except in accordance with the Act and terms and conditions of a valid petroleum importation business licence issued by the Commission or its agents. 5. (1) No person shall import or cause to be imported into Kenya any quantity of petroleum products for consumption in Kenya other than through an open tendering system. (2) The petroleum products to be imported under the open tendering system are specified in Schedule A. (3) The Minister may from time to time amend the list of petroleum products specified in Schedule A. (1) No person shall import or cause to be imported crude oil for use in Kenya other than through an Open Tendering System. (2) The Kenya Petroleum Refineries Limited shall process such minimum quantities of petroleum crude oil per calendar year as the Minister may from time to time prescribe. (3) Any person engaged in the importation of refined petroleum products for use in Kenya, other than Bitumen, shall purchase from the Kenya Petroleum Refineries Limited such quantities of refined petroleum products derived from the processing of the quantity of petroleum crude oil indicated in paragraph 2, as the Minister may prescribe having regard to the market share, per petroleum product, of such importer. 7. The Minister may from time to time prescribe in writing quantities of petroleum products and/ or crude oil to be exempted from the application of regulations 5 (1) and 6 (1) above 8. The Minister shall prescribe the places through which petroleum may be imported into Kenya. 9. (1) All petroleum business licensees conducting the importation of petroleum products and crude oil under the open tendering system shall enter into an agreement on the Tender Terms and Conditions for Refined Product Industry Import Deliveries to Kenya Oil Industry in the format annexed hereto as Part 1 of Schedule B and on Tender Terms and Conditions for Crude Oil Import Deliveries to Kenya Oil Industry in the format annexed hereto as Part 2 of Schedule B. (2) An agreement proposed to be entered into pursuant to paragraph 9(1) herein shall be submitted to the Commission or its agents for review and approval. 10. (1) The Commission or its agents may suspend or revoke the licence of a petroleum business licensee who has defaulted in complying with the terms and conditions of the agreements signed pursuant to regulation 9 above. (2) Any person aggrieved by an order or decision of the Commission or its agents made under paragraph (1) herein may, within thirty (30) days of receipt of such an order or decision, appeal to the Tribunal. 11. In any case where the person who contravenes any of the provisions of these Regulations is licensed under these Regulations, the Commission or its agents may suspend or revoke his licence. 12. Any person who contravenes any of these regulations commits an offence and shall upon conviction be liable to a fine not exceeding one million shillings or to imprisonment for a maximum term of one year, or to both. 13. The Petroleum (Amendment) (No 2) Rules 2003 and the Petroleum (Amendment) (No 1) Rules 2006 are hereby revoked. KABURU MWIRICHIA, Director General, Energy Regulatory Commission. SCHEDULE A THE ENERGY ACT, 2006 PRODUCTS TO BE IMPORTED UNDER THE OPEN TENDERING SYSTEM 1. Super petrol, 2. Dual purpose kerosene 3. Automotive diesel. SCHEDULE B PART 1 THE ENERGY ACT, 2006 TENDER TERMS AND CONDITIONSFOR REFINED PRODUCT INDUSTRY IMPORT DELIVERIES TO KENYA OIL INDUSTRY This Agreement made on the1st June 2011 between Buyers and Sellers of Refined Petroleum Products within the Kenya Petroleum Oil Industry. WHEREAS: (a) Oil Marketing Companies are required by Legal Notice No. 197 dated 2nd December, 2003 to import refined petroleum products for use in Kenya through the Open Tender System centrally co-coordinated by Ministry of Energy. (b) KPC receives the imported refined petroleum product at its Kipevu Oil Storage Facility as required and obligated by Law under Legal Notice number 197 of 2nd December 2003 and therefore plays a fundamental role in the operations of this Agreement. (c) Parties or Participants to this Agreement, whether SELLERS or BUYERS, are oil marketing companies which (i) are registered and licensed by the Energy Regulatory Commission through the Ministry of Energy, and (ii) have been active in trading and marketing of petroleum fuels within Kenya for a minimum duration of three (3) months preceding this Agreement, and (iii) tender or participate in the Open Tender System, (iv) have signed the KPRL Processing Agreement and are meeting their base load processing obligations at KPRL and v) have not defaulted on any Crude Oil payment within the last three months. (d) SELLER shall mean the Party who has participated as Buyer for a minimum duration of three (3) months following the date of signing this agreement and awarded the tender for the supply of a specified cargo by the Ministry of Energy under the terms of this Agreement. 18th May, 2012 THE KENYA GAZETTE (e) BUYER shall mean a Party that has nominated to participate in a specific refined product industry import. (f) This Agreement hereby supersedes the Agreement dated 22nd February 2005. (g) Each Oil Marketing Company has entered into a Transport & Storage Agreement (T&S Agreement) with Kenya Pipeline Company Limited (KPC) which T&S Agreement is an integral attachment to this Agreement. NOW THEREFORE IT IS AGREED AS FOLLOWS: 1. EFFECTIVE DATE 1.1. This Agreement shall take effect on 1st June 2011 and shall continue until reviewed or terminated as provided hereinafter. 1.2. No party shall tender or participate or participate in Industry import pursuant hereto, prior to signing this Agreement. 2. ABBREVIATIONS AND DEFINITIONS 2.1. The following Abbreviations shall have the meanings provided: B/L Bill of Lading C & F Cost and Freight FOB Free on Board INCOTERMS International Commercial Terms (Set of International Chamber of Commerce – U.K) KOSF Kipevu Oil Storage Facility KOT Kipevu Oil Terminal SOT Shimanzi Oil Terminal KPA Kenya Ports Authority KPC Kenya Pipeline Company Limited KRA Kenya Revenue Authority SUPPLYCOR Industry Supply Co-ordinator KPRL Kenya Petroleum Refineries Limited L/C Letter of Credit LIBOR London Inter-Bank Borrowing Official Rates MARPOL Marine Pollution MOE Ministry of Energy MT Metric Tonnes SHINC Saturdays, Sundays, Holidays included OSMAG Oil Spill Mutual Aid Group SCM Supply Co-ordination Meeting SOLAS Safety of Life at Sea STCW Standards of Training, Certification and Watch-keeping for Seafarers USD United States Dollar US BBL United States Barrel DISPORT Discharge Port PCT Percent TT Telegraphic Transfer RTGS Real Time Gross Settlement ERC Energy Regulatory Commission 2.1.1. The following terms shall have the meanings provided: 2.2.1 ―Cargo‖ shall mean a specific shipment of refined product of Industry Import. 2.2.2 ―Charter Party Terms‖ shall mean the terms of the agreement as shall be agreed between the SELLER and the ship owner for a specific Cargo. 2.2.3 ―Cleared Funds‖ shall mean payments confirmed by SELLER‘s Bank as received either through Electronic Funds Transfers (EFT) or Letter of Credit. 2.2.4 ―Effective Date‖ shall mean the 1ST day of June, 2011. 2.2.5 ―Full Cargo‖ shall mean the nominated quantity +/- 5 pct. 2.2.6 ―Pipecor‖ shall mean the Oil Industry Secretariat Pipeline Coordination. 2.2.7 ―Safe berth‖ shall mean a berth which vessels so conforming, and having any beam, can at all times safely reach and leave and at which such vessels can lie at all times safely afloat. 2.2.8 ―Tender‖ shall mean an offer by SELLER to supply refined product to BUYERs. 2.2.9 ―Tender Closing Day‖ shall mean the last day indicated by Supplycor on behalf of Ministry of Energy for submission of bids. 2.2.10 ―Tender Opening Day‖ shall mean the day Ministry of Energy opens the bids for Industry Import under this agreement. 2.2.11 ―Delivery Date Range‖ shall mean the dates of delivery as specified in the Tender Invitation or as amended at the vessel scheduling meeting.. 2.2.12 ―Forex Date‖ shall mean the reference date for the exchange rate to be used in billing. 2.2.13 ―Demurrage Committee‖ shall mean the demurrage validation and verification committee 2.2.14 Vessel Scheduling Meeting shall mean the monthly meeting chaired by MOE and attended by nominated Marketers, KPC, and Pipecor whose main agenda is to schedule vessels for all the firm imports. 3. INVITATION TO TENDER 3.1. Invitation to tender on final participations shall be issued by pipecor on behalf of MOE at least three (3) full business days before Tender Opening Date. 3.2. Pipecor, on behalf of MOE shall notify parties to this agreement of the total cargo to be tendered accompanied with the breakdown of the individual buyer‘s participation.(Annex 2) The offers should be submitted in a sealed plain envelope to: THE PERMANENT SECRETARY, MINISTRY OF ENERGY, 23RD FLOOR, NYAYO HOUSE NAIROBI 4. TENDER CLOSING AND OPENING TIME 4.1. Tenders shall be delivered to MOE Offices by 1415 hours Nairobi Time on the Tender Closing Day and shall be opened at 1430 hours Nairobi time on the same day. 4.2. Witnessing of Tender Opening shall be limited to representatives of the signatories to this Agreement with representatives from MOE, Supplycor and Pipecor. Only one bid per company will be permitted for submission. 5. VALIDITY OF OFFERS 5.1.1.The winning bid against tenders to deliver shall remain valid until 1200 hrs Nairobi Time on day following the Tender opening date within which time Buyer may withdraw their participation. For the purpose of this Clause, validity shall mean that no SELLER will be entitled to withdraw any offer within this period or at any other time except as provided in clause 5.3 hereunder. 5.2. MOE shall award the tender to the most competitive bidder before the expiry of the offer validity period to formalize the contract. 5.3. In the event that volume tendered for is reduced by more than fifteen (15) percent of the tender cargo size, SELLER will be at liberty to withdraw its offer no later than 1500 hours Nairobi time of the day following the Tender Opening Date. 5.4. Tenders shall neither close nor be opened on Fridays and workdays falling immediately before public holidays, unless the tender is for an emergency import declared by MOE. 6. DISQUALIFICATION OF OFFER Any offer submitted by a SELLER that is not in conformity with the terms and conditions of this Agreement shall be automatically disqualified. THE KENYA GAZETTE 18th May, 2012 1756 1756 7. DELIVERY POINT 7.1 The designated point of delivery shall be in-tank KOSF or SOT. Should operational constraints dictate otherwise, additional handling charges, if any, will be negotiated between Buyer(s) and Seller. 7.2 All vessels delivering product must be Double Hull, meet the Maximum Age Limit of 20 years and meet any other requirements issued by the Kenya Maritime Authority, which are from time to time communicated to Port Users. 8. QUALITY 8.1 Quality of the products delivered here-under shall be as per the prevailing Kenya Bureau of Standards (KEBS). 8.2 Subject to clause 8.1 above, in the event that the quality of the product delivered does not meet the operational specifications of the receiving terminal, KPC, the facility operator shall at its own discretion authorize the receipt of such product into its shore tanks, in consultation with MOE. 8.3 The density for Unleaded Motor Spirit (PMS) shall be maximum 0.7427 kg/litre at 20 degrees Centigrade. Jet A-1 specification shall conform to the Aviation Fuel Quality Requirements for Jointly Operated System (AFQRJOS) checklist, latest issue. 9. SHIPMENT Shipment shall be in one or two parcels, at the seller‘s option, subject to clause 21 and 22. 10. PRICE The price of the product in Mombasa shore tanks shall be the aggregate of the following: 10.1. FOB COMPONENT The FOB component shall be per tender called and confirmed by MOE award. It shall be the arithmetic average of the mean of Platts high and low quotations for the month of pricing specified as follows:-  For cargoes whose first day of delivery date range is between the 1st day to the 14th day of the month, the applicable month of pricing shall be the immediate month prior to the month of delivery, i.e. Month M-1.  For cargoes whose first day of delivery date range is between the 15th to the last day of the month, the applicable month of pricing shall be the current month of delivery, i.e. Month M.  Any revision of delivery date range shall not affect the month of pricing us defined above unless such revision is a documented outcome of the Vessel Scheduling Meeting. 10.1.1. For PMS (Premium Motor Spirit), Platts Mediterranean product cargo assessment under the heading ‗FOB Med (Italy) Prem Unl 10ppm‘ to apply. 10.1.2. For Jet A-1, Platts Asia Pacific/Arab Gulf Marketscan under the heading ‗FOB Arab Gulf‘ for ‗Kero‘. Actual United States Barrel to Metric Tonne conversion per bill of lading shall apply. 10.1.3. For Gasoil 500 ppm, Platts Asia Pacific/Arab Gulf Marketscan under the heading ‗FOB Arab Gulf‘ for ‗Gasoil 0.5% S‘. Actual United States Barrel to Metric Tonne conversion per bill of lading shall apply. Any published correction to any relevant assessment shall be notified to buyers within three (3) working days of the platts correction. In the event that the applicable Mean of Platts quotations for the delivery month (M) are not available by the invoice date, the quotations for the month to-date average shall be applied on a provisional basis. Immediately the applicable quotations for the delivery month (M) specified on the Tender Invitation are known, SELLER shall raise supplementary invoices or credit notes in favor of BUYERs. These supplementary invoices or credit notes shall be issued to BUYERs not later than five (5) working days following the publication of the final price and shall be paid not later than five (5) working days from the date of receipt, failure to which Seller/Buyer shall notify MOE of the defaulting party who shall not be allowed to participate in the refined product tender either as Buyer or Seller. A copy of the final price build-up showing the final outturn figures (Metric Tons and Cubic Metres at 20 degrees centigrade) to be sent to Supplycor for forwarding to ERC. Supplycor will validate the final price build up prior to sending it to ERC. 10.2 FREIGHT AND PREMIUM COMPONENT A fixed amount in United States Dollar per Metric tonne (USD/MT) as awarded. 10.3 LOCAL CURRENCY COMPONENT 10.3.1 A variable Kenya Shillings component, calculated as per annex ―1. Statutory charges shall apply as gazetted from time to time. 10.3.2 All numbers shall be calculated to 4 (four) decimal places. 11 PAYMENT, PENALTY FOR LATE PAYMENT & TRANSFER OF ENTITLEMENT 11.1 Seller shall forward invoice to buyers, together with all supporting documentation within 5 (five) working days prior to the first day of delivery date range. 11.2 The supporting documents shall be: (a) Copy of bill of lading (b) Forex schedule (c) Copy of price build up (d) IDF (Import Declaration Form) 11.3 Payment shall be made to seller within 2 (two) working days after completion of vessel discharge subject to clause 11.4. For this purpose, the outturn date shall be deemed to be the date of completion of vessel discharge. Where delivery of the product is through SOT, Mombasa to Buyer‘s nominated discharge location; all payments including duties/taxes shall be remitted latest 48 hours before the firm berthing date from KPA. All supplementary payments or refunds shall be settled within seven calendar days from the date of the final outturn. 11.4 In the event that invoices and the requisite supporting documents are not received by buyer within 5 (five) working days prior to the first day of delivery laycan, buyer shall pay seller within 5 (five) working days from receipt of said invoices and requisite supporting documents. Invoices shall be raised as follows: 11.4.1 For the C&F (Cost & Freight) component (as stipulated in Clause 10.1 and 10.2 above, in US Dollars in cleared funds, into a US Dollar account as indicated by the seller. This payment shall be made by bank transfer and/or by LC (Letter of Credit). Payments by LC shall be subject to mutual arrangements between Buyer and Seller. 11.4.2 For the local currency component (as stipulated in clause 10.3 above), in Kenya Shillings converted at the prevailing US Dollar TT Selling rate as advised by seller‘s bank on the applicable Forex date or in the case of the Forex date falling on a weekend or a gazetted public holiday, the first following Kenyan banking day. Payment shall be made by either a Company cheque and may be deemed effected after the cheque clearance at seller‘s discretion, within a maximum of four days, or through RTGS. For this purpose, the applicable Forex date shall not be earlier than: 14 (fourteen) days prior to first day of tender stipulated delivery date range for cargoes loading out of the Arabian Gulf ,Red Sea, South Africa, East Coast of Africa, West Coast of India; 20 (twenty) days for cargoes out of the Mediterranean region, Far East and elsewhere. For cargoes arriving after the stipulated delivery date range, late delivery penalty will be applicable as outlined in Clause 20. 11.5 Penalty for late payments will be computed as follows: 11.5.1 (i) USD Component: At the one month LIBOR rate ruling on the payment due date plus 2% (two percent) for the 18th May, 2012 THE KENYA GAZETTE period between the 3rd to the 12th working day from date of completion of discharge. (ii) Kshs. Component: At the Base rate ruling on the payment due date from seller‘s bank plus 2% (two percent) for the period between the 3rd to the 12th working day from date of completion of discharge. 11.5.2 Where the required invoices and supporting documents are not received by the buyer within 5 (five) working days prior to the first day of the delivery date range payment due date shall be as per clause 11.4. Late payment shall be applicable as per clause 11.5.1 depending on the number of days late. 11.5.3 In the event that a buyer does not effect payment before the twelfth (12th) working day from the date of outturn report the defaulting Buyer shall be referred to MOE. Seller shall be at liberty to dispose off of the product. BUYERs who fail to pay for their share of the Cargo for the first shipment shall not be allocated ullage for the subsequent allocation, i.e. month M+2. Payment defaulters in three shipments within a period of twelve (12) consecutive months shall not be allowed to participate in subsequent tenders either as BUYER or SELLER and shall be referred to MOE for further action. 11.5.4 In the event of either party defaulting, MOE shall notify all the Parties to this agreement. 11.5.5 Penalty for Late payment shall be payable fifteen (15) days after presentation of the invoice. If payment is not effected fifteen (15) days from presentation of the invoice, the defaulting party shall not participate in subsequent tenders either as BUYER or SELLER until such time that SELLER confirms receipt of payment. Provided that SELLER may agree with BUYER in writing and with the consent of MOE to retain the refined product equivalent to the late payment interest charges. All third party charges associated with late payment e.g. KRA Taxes and Penalties KOSF storage charge as per the Transportation and Storage Agreement, shall be on account of the defaulting party and will be recovered as per actual and as prevailing from time to time. 11.6 TRANSFER OF ENTITLEMENT : 11.6.1 Except where there are disputes related to OTS, SELLER shall transfer to BUYER the full entitlement as invoiced and paid for without deduction or set off within the next working day following payment by BUYER. For the purposes of this clause, Transfer of Entitlement shall be deemed to be the issuance of Title Transfer documents by Seller to Buyer. Such title transfer documents shall be: (a) Stock Adjustment fax instruction to KPC (b) Customs Form C-21 (c) Customs warehousing entry (d) Any other documents as shall be stipulated by T & S agreement as well as the prevailing Customs regulations. 11.6.2 Upon receipt of instructions by way of Stock Adjustment fax, KPC shall endorse such instructions and shall document the date of receipt and confirm availability of product to the Parties by endorsing the Customs Form C- 21. 11.6.3 KPC shall effect stock adjustments within 24 hours of receipt of the Stock Adjustment fax and Form C-21 duly endorsed by KRA 11.6.4 KPC shall circulate to the Parties on a Daily basis, the updated Daily Stock entitlements and shall inform the Parties in the event that a Seller has negative Stock entitlement. 11.6.5 Where penalty for late payment is due from BUYER, SELLER reserves the right to withhold product quantities equivalent to the penalty at the time of entitlement transfer within the fifteen (15) days when the penalty for late payment will be outstanding. 11.6.6 In the event that a SELLER does not transfer stocks to BUYER within the period stipulated in Clause 11.6.1, BUYER shall be entitled to charge a penalty at the same rates as computed in the Late Payment and Penalty Clause 11.5.1 above. 11.6.7 Penalty for late entitlement transfer charges shall be payable by Seller within fifteen (15) Calendar days after presentation of the invoice. If payment is not effected fifteen (15) Calendar days from presentation of the invoice, the defaulting party shall not participate in subsequent tenders either as BUYER or SELLER until such time that BUYER confirms receipt of payment. 11.6.8 Where product is delivered from the vessel directly into Buyer‘s Terminal at SOT, Mombasa, entitlement of the product shall pass from Seller to Buyer when product is received into Buyer‘s nominated shore tanks. 12 INSPECTION Quantity and quality of Industry Import, as determined by discharge installation, and confirmed by an Independent Inspector at Mombasa, is final and binding on all parties, except in the case of fraud or manifest error. For the invoice, disport inspection charges shall be included in the price build-up as per annex ‗1‘ hereto. The Seller shall provide Buyer with disport inspection data. 13 LAYTIME 48 hours SHINC commencing 6 hours from tendering Notice of Readiness or upon vessel ‗Allfast‘, whichever is earlier. Charter Party terms/conditions to apply. Time lost due to non-berthing of tankers during night time and/or awaiting daylight hightide, shall not count as used laytime. 14 DEMURRAGE (1) There will be no Demurrage claims for OTS Vessels arriving outside the delivery date range and/or where lack of physical ullage for the Industry Cargo is attributable to Seller who again claims compensation for demurrage. (2) Seller is mandated to nominate the performing Vessel to Buyer‘s and indicate the demurrage rate prior to Vessel arrival in Mombasa. The demurrage rate shall be actual as stipulated in the charter-party terms and conditions but subject to a maximum of US$ 25,000.00 PDPR, which will form part of the support documents. (3) If the nominated Vessel arrives within delivery date range, demurrage may arise in the following instances:- (a) Where the Vessel cannot berth and / or discharge the Industry cargo due to lack of physical ullage in the receiving Terminals except Private Depots., (b) Where berthing of the subject Vessel is delayed by another Vessel occupying the berth and discharging Industry Cargo. (4) Demurrage claims for OTS imports will be handled as follows: (a) For purposes of verification and validation, Supplier will avail the demurrage computation and the relevant support documents for the claim to Supplycor within five (5) working days after vessel discharge completion, beyond which the claim will be NULL and VOID. Supplycor will forward the support documents to the Industry Nominated Demurrage committee (Annex 3) for validation and/or any corrections shall be done within two (2) working days. (b) Upon validation of the Demurrage claim, Supplycor shall notify the Energy Regulatory Commission (ERC) of the correct demurrage cost to be included in the pricing formulae. Supplycor and/or the Industry Nominee will also give notice of the demurrage claim to Buyers. (c) After the adoption of the demurrage amount by ERC, Seller will claim reimbursement of the demurrage costs from THE KENYA GAZETTE 18th May, 2012 1758 1758 Buyers of the cargo. Such claims shall be payable within five(5) working days from the date of presentation of invoice, failure to which defaulting parties shall be forwarded to MOE for further action. 15 TITLE AND RISK (i) Risk of loss and damage to the products sold/purchased hereunder shall pass from Seller to Buyer:- (a) In case of deliveries to Mombasa Shore Tanks, either at KPC-KOSF or KPRL or both, or; (b) In case of deliveries through Shimanzi Oil Terminal (SOT), as the Product passes the Vessel‘s flange at the discharge berth. (ii) Title to the product shall pass to the Buyer from the Seller upon full payment of the purchase price. (iii) As a separate and independent condition, Buyer agrees that unless and until the full purchase price is tendered, the product shall be Seller's property. (iv) Until delivery of the Product, Seller shall insure them against all usual risks to full replacement value, and the Seller shall not re-sell, use or part with possession of them. This obligation shall survive termination of this Agreement. (v) KPC shall handle the refined product on behalf of the Parties as Bailee. 16 TERMINATION AND WITHDRAWAL OF PARTY 16.2 This Agreement shall be terminated as against a party upon the occurrence of any of the following: (a) Immediately upon dissolution, bankruptcy, insolvency, or appointment of a receiver, liquidator, or trustee in bankruptcy for that party. (b) Written notice to a party that a law has been introduced or amended by an Act of Parliament so that it is unlawful for that party to operate or perform its duties and obligations under this Agreement or realize the benefits of this Agreement. (c) If such party ceases to carry on business. 16.3 Notice of termination or withdrawal under this Agreement shall not discharge or relieve the withdrawing party of any rights, duties, obligations or liabilities arising prior to such termination, nor prejudice any rights or remedy accruing before, at or in consequence of such termination, or any proceeding with respect to any such right or remedy including any proceedings by way of arbitration provided for hereunder. 17 ARBITRATION 17.2 If at any time during the continuance of this Agreement any dispute, difference or question relating to the construction, meaning or effect of this Agreement or of any of the Clauses herein shall arise between the parties, then the aggrieved or affected party shall give written notice of not less than Twenty-one (21) days to the other party of such dispute, difference or questions.. 17.3 Any dispute with regard to any matter in connection with this Agreement shall be referred to a sole arbitrator to be appointed by the parties hereto and failing agreement on the appointment of such arbitrator then a single arbitrator will be appointed by the Chairman for the time being of the Kenya Branch of Chartered Institute of Arbitrators within twenty one (21) days. 17.4 The arbitration shall be conducted in accordance with the provisions of the Arbitration Act No. 4 of 1995 (Laws of Kenya or any statutory modifications or re-enactment thereof for the time being in force). The Place of Arbitration shall be Nairobi and the language of proceedings shall be English. 17.5 The parties will apportion equally such costs of the arbitration including the fees to the arbitrator excluding any charges for legal or other representation by or on behalf of the parties. 17.6 Judgment upon any award rendered may be entered as a decree of the Court in any Court having jurisdiction or application may be made to such Courts for judicial acceptance of the award and an order of enforcement as the case may be. 18 GENERAL To the extent that they are not in conflict with the terms of this agreement, the Members hereby agree to be bound by the terms of Incoterms 2000 and amendments thereof. 19 DISQUALIFICATION Any offer submitted and does not conform to the terms and conditions as contained in this agreement shall lead to automatic disqualification. 20 WITHDRAWAL PENALTY A Seller who wins and is awarded the tender but withdraws from delivery of the product(s) shall pay Buyers a penalty of USD 10.00 per Metric Ton of Tender quantity or part quantity thereof not delivered, subject to Clause 5.1. The same penalty shall apply to a Buyer who withdraws a quantity tendered after expiry of the stipulated offer validity period. A Buyer who does not pay the Seller within twelve (12) working days after completion of discharge shall be deemed to have defaulted and will also be liable to a withdrawal penalty of US$ 10.00 per Metric Ton. In this case, withdrawal penalty will be payable to the Seller within 30 calendar days from the date of invoice and the provisions of clause 11.5.3 above shall apply. In the event that volume tendered for is reduced by more than fifteen (15) percent of the tender cargo size (Refer to clause 5.3), Seller will be at liberty to withdraw its offer no later than 1500 hours Nairobi time of the day following the Tender opening date. 21 LATE DELIVERY PENALTY 21.2 In the event that SELLER‘s vessel does not arrive in Mombasa within three (3) days after the allocated delivery date-range, SELLER shall pay BUYERs a late delivery penalty of USD 1.00 per Metric Tonne of Tender Quantity per day. 21.3 For this purpose, the late delivery penalty shall accrue from the first day after the allocated delivery date range until the vessel arrives. Further, these amounts shall be payable within thirty (30) calendar days after the date of the last day of delivery date range. 21.4 Until such payment is effected in full and receipt of monies confirmed by BUYER‘s, Seller shall not participate in any other refined product tender and shall have its import license suspended or revoked by MOE. 21.5 In addition, Seller shall be responsible for all direct costs associated with product delivery outside the allocated delivery date range. 22 DELIVERY DEFAULT 22.1 Delivery default shall be deemed to have occurred if vessel does not arrive and Tender Notice of Readiness to discharge at Mombasa within ten (10) days after the last day of the delivery date range, in which case Buyer‘s will be relieved of their obligation to buy the cargo. This window will only apply where Seller can demonstrate that there is an expected shipment by providing copies of Bill (s) of Lading and Certificate of Quality to MOE by the first day of delivery date range. In the event that Supplier cannot provide the required documents, MOE shall proceed to call an emergency tender to substitute the defaulted cargo and the defaulting Seller shall be barred from participating as Seller in the subsequent three months in addition to the provisions of clause 22.2. 22.2 SELLER who is in default shall be liable for the penalties detailed in Clause 20. 23 FORCE MAJEURE 23.1 Neither SELLER nor BUYER shall be liable for damages or penalties for any failure or delay in performance of any 18th May, 2012 THE KENYA GAZETTE obligation hereunder other than obligation to make payment, where such failure or delay is caused by force majeure, being any event, occurrence or circumstance reasonably beyond any control of that party, including without prejudice to the generality of the foregoing but not limited to failure or delay caused by or resulting from acts of God, piracy attacks, fires, floods, wars (whether declared or undeclared), riots, delays of carriers due to breakdown or adverse weather, perils of the sea, embargoes, accidents, restrictions imposed by any governmental authority (including allocations, priorities, requisitions, quotas and price controls). 23.2 The party whose performance is so affected shall immediately notify the other party hereto indicating the nature of such a cause and, to the extent possible, inform the other party of the expected duration of the force majeure event. The time of SELLER to make, or BUYER to receive, delivery hereunder shall be extended during any period in which delivery shall be delayed or prevented by reason of any of the foregoing causes up to a total of ten (10) days. 23.3 If any delivery hereunder shall be so delayed or prevented for more than ten (10) days, either party may terminate this contract with respect to such delivery upon written notice to the other party. 24 WAIVER Any waiver or concession that may be granted by a party (ies) hereto in regard to any of terms and conditions of this agreement shall not in any way affect or prejudice that party‘s strict rights hereunder. All such waivers or concessions may be withdrawn at any time without prior notice. No waiver by either party of any breach of this Agreement shall be considered as a waiver of any subsequent breach of the same or any provision. 25 ASSIGNMENT No party shall assign this agreement in whole or in part without the written notice to the other parties except to an affiliate as described in Section 154 of Companies Act Cap 486.Provided that transfer of more than 50% of the shares of either party shall be deemed to be an assignment within the context of this clause. 26 TOTAL AGREEMENT This agreement is the entire agreement between the parties concerning the subject matter and supersedes all prior agreements and understandings whether written or verbal. This agreement may not be varied or amended in any way except in writing signed by representatives of all the parties. 27 GOVERNING LAW This Agreement shall be construed in accordance with and governed by the Laws of the Republic of Kenya. We, the undersigned, duly authorized by our respective Companies, hereby agree to all the above terms and conditions: SCHEDULE B: PART 2 THE ENERGY ACT, 2006 TENDER TERMS AND CONDITIONS FOR THE KENYA PETROLEUM OIL INDUSTRY OPEN TENDER SYSTEM FOR THE DELIVERY OF CRUDE OIL INTO KENYA This Agreement made on the 18th day of July, 2008 between Buyers and Sellers of crude oil within the Kenya Petroleum Oil Industry. WHEREAS: (h) Oil Marketing Companies are required by Legal Notice No. 197 dated 2nd December, 2003 to import petroleum crude oil for refining and use in Kenya through the Open Tender System centrally co-ordinated by Ministry of Energy. (i) Parties or Participants to this Agreement, whether SELLERS or BUYERS, are oil marketing companies which are (i) registered and licensed by the Ministry of Energy, and (ii) that have been active in trading and marketing of petroleum fuels within Kenya for a minimum duration of three (3) months preceding this Agreement, and (iii) that tender or participate in the Open Tender System, and (iv) that have signed the KPRL Processing Agreement and meeting their base load processing obligations at KPRL. (j) SELLER shall mean the Party awarded the tender for the supply of a specified cargo by the Ministry of Energy under the terms of this Agreement. (k) BUYER shall mean a Party that has been allocated participation by the Ministry of Energy. (l) This Agreement hereby supersedes the Interim Agreement dated 1st January 2004. (m) The KPRL Processing Agreement, KPRL Side Agreement and the KPRL Data Book shall be integral attachments to this Agreement but where in conflict between this Agreement and the KPRL Processing Agreement, the Terms and Conditions of this Agreement shall prevail. NOW THEREFORE IT IS AGREED AS FOLLOWS: 2. EFFECTIVE DATE 10.2. This Agreement shall take effect on 1ST SEPTEMBER 2008 and shall continue until reviewed or terminated as provided hereinafter. 10.3. No party may tender or participate pursuant hereto, prior to signing the Agreement. 11. ABBREVIATIONS AND DEFINITION S 11.1. The following Abbreviations shall have the meanings provided: B/L Bill of Lading C & F Cost and Freight FOB Free on Board KOT Kipevu Oil Terminal KPA Kenya Ports Authority KPRL Kenya Petroleum Refineries Limited L/C Letter of Credit LIBOR London Inter-Bank Borrowing Official Rates MARPOL Marine Pollution MOE Ministry of Energy MT Metric Tonnes OSMAG Oil Spill Mutual Aid Group OSP Official Government Selling Price for the applicable crude oil as published by the relevant Government/Government Body/Government Agent for the country of origin for the applicable crude oil PSI Pounds per Square Inch SCM Supply Co-ordination Meeting SOLAS Safety of Life at Sea STCW Standards of Training, Certification and Watch- keeping for Seafarers USD United States Dollars 11.2. The following terms shall have the meanings provided: 2.2.15 ―Cargo‖ shall mean a specific shipment of crude oil. 2.2.16 ―Charter Party Terms‖ shall mean the terms of the agreement as shall be agreed between the SELLER and the ship owner for a specific Cargo. 2.2.17 ―Cleared Funds‖ shall mean payments confirmed by SELLER‘s Bank as received either through Electronic Funds Transfers (EFT) or Letter of Credit. 2.2.18 ―Effective Date‖ shall mean the 1ST day of SEPTEMBER 2008. 2.2.19 ―Full Cargo‖ shall mean any cargo quantity within 80,000 metric tons +/- 5 pct. THE KENYA GAZETTE 18th May, 2012 1760 1760 2.2.20 ―Pipecor‖ shall mean the Oil Industry Secretariat Pipeline Coordination. 2.2.21 ―Safe berth‖ shall mean a berth which vessels so conforming, and having any beam, can at all times safely reach and leave and at which such vessels can lie at all times safely afloat. 2.2.22 ―Tender‖ shall mean an offer by SELLER to supply crude oil to BUYERs. 2.2.23 ―Tender Closing Day‖ shall mean the last day indicated by the Ministry of Energy for submission of bids. 2.2.24 ―Tender Opening Day‖ shall mean the day Ministry of Energy opens the bids. 2.2.25 ―User‖ shall mean the ―Refinery User‖ as defined in the KPRL Processing Agreement. 12. INVITATION TO TENDER 12.1. Invitation to tender on provisional participations shall be issued by MOE at least seven (7) calendar days before Tender Opening Date. 12.2. MOE shall notify parties to this agreement the required participation in the Cargoes to be tendered in accordance with Clause 8 here below and ratified at the SCM immediately preceding the Tender Opening Date. 13. TENDER CLOSING AND OPENING TIME 13.1. Tenders shall be delivered to MOE Offices by 1415 hours Nairobi Time on the Tender Closing Day and shall be opened at 1430 hours Nairobi time on the same day. 13.2. Witnessing of Tender Opening shall be limited to representatives of the signatories to this Agreement with representatives from KPRL, MOE and Pipecor. 14. VALIDITY OF OFFERS 14.1. The winning bid against tenders to deliver shall remain valid until 1200 hrs Nairobi Time on day following the Tender opening date. For the purpose of this Clause 5.1, validity shall mean that no SELLER will be entitled to withdraw any offer within this period or at any other time except as provided in clause 5.3 hereunder. 14.2. MOE shall award the tender to the most competitive bidder before the expiry of the offer validity period to formalize the contract. 14.3. In the event that volume tendered for is reduced by more than ten (10) percent of the tender cargo size, SELLER will be at liberty to withdraw its offer no later than 1400 hours Nairobi time of the day following the Tender Opening Date. 14.4. Tenders shall neither close nor be opened on Fridays and workdays before public holidays. 14.5. Notwithstanding the generality of sub-clause 5.1 BUYERs shall be entitled to withdraw their participation in the event of the offer exceeding pricing of similar cargoes on the international markets. Such withdrawal shall be effective by no later than 1200 Hours Nairobi time of the day following Tender Opening Date. 15. DISQUALIFICATION OF OFFER Any offer submitted by a SELLER that is not in conformity with the terms and conditions of this Agreement shall be automatically disqualified. 16. CRUDE OIL TYPE AND QUANTITY 16.1. The type and quantity of the crude oil shall be as indicated in the Invitation to Tender plus or minus five (5) percent at SELLERs option. 16.2. Total Bill of Lading quantity shall be sold / purchased pro- rata participation as indicated in the Invitation to Tender. 17. CRUDE OIL QUALITY 17.1. KPRL shall stipulate the recommended type of crude oil for the Tender in line with tabled programs by Users. 17.2. Crude oil quality shall meet the specifications in the Invitation to Tender and the Crude Oil Acceptance criteria detailed in the prevailing KPRL Data Book. 18. SHIPMENT Shipment shall be arranged in parcels of 80,000 MT +/- 5 pct subject to Mombasa Port limitations, as specified in the Tender Invitation. 19. DELIVERY POINT, TITLE AND RISK 19.1. The designated point of delivery shall be in KPRL crude oil tanks. 19.2. Title and risk of the crude oil supplied shall pass from SELLER to BUYERs in KPRL Crude Oil tanks upon receipt of payment by SELLER as per Clause 12.1 and subsequent transfer of entitlement from SELLER to BUYERs, as provided for in Clause 12.4. 19.3. All vessels delivering crude oil shall adhere to the following standards: (i) The berthing requirements issued by KPA. (ii) Compatibility with the discharge facilities for crude oil at KOT Jetty, all detailed in the current KPRL Data Book. (iii) SELLER shall be required to ensure that the carrier vessel complies with the International Shipping Management Code and shall comply with the following additional requirements:- (a) Hold valid certificates for the operations on board including: (i) SOLAS Ship Safety Construction Certificate. (ii) SOLAS Ship Safety Equipment Certificate. (iii) Load Line Certificate. (iv) Compliance with the International Convention for Prevention of Pollution From Ships MARPOL 73/78 (Annex I / II) incorporating amendment on Regulation 13(G) and new Regulation 13(H) of Annex I of MARPOL73/78 on the Prevention of Oil Pollution from Oil Tankers, that have been adopted by IMOs Marine Environment Protection Committee (MEPC) by Resolution MEPC III (50) of December 2003 which entered into force for all parties to the MARPOL Convention with effect from April 05, 2005. (v) A Certificate of Insurance or other financial security in respect of civil liability for oil pollution damage. (b) Ensure the ship is manned according to STCW 1995 Convention requirements. The master and officer in charge of Cargo to be proficient in conversational English. (c) Ensure that the ship is equipped with inert gas and that the inert gas systems are in good working condition. (d) Ensure, subject to port state control that all documents and plans are valid and readily available for inspection. (i) Any other requirements issued by relevant government authorities. 19.4. The Technical Coordinator of OSMAG shall on a continuing basis sample the performing vessels randomly to verify that the above conditions are satisfied. 18th May, 2012 THE KENYA GAZETTE 20. LANDED COST The landed cost of crude oil, in KPRL crude oil tanks, shall be the aggregate of the following:- A]. FOB component – The OSP for the applicable crude oil as published by the relevant Government Agency of the country of origin for the applicable crude oil, shall be for the month as specified in the Tender Invitation document in Annex 1. B]. Freight and premium component – A fixed amount in USD/Barrel as awarded. C]. Local Currency component – A variable Kenya Shillings component, calculated as per Annex 2. 21. PAYMENT, LATE PAYMENT PENALTIES AND TRANSFER OF ENTITLEMENT 21.1. Payment: Payment shall be remitted by BUYER to SELLER as per SELLER‘s invoice in full, in accordance with the Price Build-Up For Crude Oil Import Annex 2, without deductions or setoffs in one or two tranches within twenty (20) days from the B/L date (B/L date to count as day one) subject to commencement of discharge and receipt of the documentation hereinafter appearing in clause 12.2. 21.2. If payment due date falls on a Saturday or any New York bank holiday other than Monday, payment will be effected on first preceding New York banking day. If payment due date, falls on a Sunday, or Monday New York bank holiday, then payment shall be effected on the next following New York banking day. 21.2.1. For payment purposes, by the 10th day from B/L date, SELLER must forward their invoice to BUYER, a copy of the B/L and an exchange rate schedule from SELLER‘s Bank indicating the prevailing selling USD rate on B/L date. 21.2.2. If the invoice and the necessary supporting documents are not received by BUYER within ten (10) days of B/L date, BUYER will pay SELLER within ten (10) days following receipt of the said documentation. 21.2.3. Invoices shall be raised and settled as follows: 21.2.3.1. The FOB and Freight and Premium components as per Clause 11 (a) and (b) shall be raised and settled in USD. Payment for these components will be settled through cleared funds into a USD account advised by SELLER. 21.2.3.2. The Local Currency component as per Clause 11 (c) shall be raised and settled in Kenya Shillings converted at the USD selling rate as advised by SELLER‘s bank as at the B/L date. In the event that the date falls on a week- end or a gazetted public holiday, then the date shall be deemed to be the day immediately following provided it is a normal working day. Payment for this component will be made by cheque. 21.2.4. In the event that the applicable final OSP for the month specified on the tender invitation is not available by the invoice date, the last known or posted OSP shall, on a provisional basis be applied. Immediately the applicable final OSP for the month as specified on the Tender Invitation is posted, SELLER shall raise supplementary invoices or credit notes in favor of BUYERs. These supplementary invoices or credit notes shall be issued to BUYERs not later than five (5) working days from the date the applicable final OSP is posted and shall be paid not later than five (5) working days from the date of receipt of the supplementary invoice. Late payments will attract late payment interest as provided for in clause 12.3. Interest rate(s) on the payment due date will apply. 21.2.5. BUYERS who have already paid the full value of Provisional Invoices and are entitled to credit notes should be refunded amounts equivalent to the credit notes within ten (10) working days from the date of determination of the final OSP. Failure to this, late payment interest as stipulated in clause 12.3 will apply. Interest rate(s) on the payment due date will apply. 21.3. Late Payments: Late payments shall bear an interest penalty subject to the exceptions outlined in this clause herein after. The interest shall start accruing from the 21st day from B/L date (where the B/L date shall be deemed to be the first day) or on the 11th day from receipt of documents if invoices and payment documents are presented to BUYERs after the 10th day from the B/L date (where the date of receipt of documents shall be deemed to be the first day). BUYER shall not be charged interest on late payment where they demonstrate by way of swift copy that funds were remitted for value on or before the due date. However, title transfer to BUYER will only be effected upon sighting of funds. 21.3.1. Late payments for amounts received between 21st day to 28th day from Bill of Lading date shall bear interest as follows:- (i) USD Component: At the One Month LIBOR rate ruling on the payment due date plus two (2%) percent. (ii) KShs Component: At the Base Rate ruling on the payment due date from Seller‘s Bank plus two (2%) percent. 21.3.2. For payments that are effected after the 28th day from B/L date, interest on late payments will be computed in a step-wise fashion as follows: (ii) USD Component: At the One Month LIBOR rate ruling on the payment due date plus two (2%) percent for the period between 21st to 28th day from B/L date and seven (7%) percent for the period between 29th day from B/L date to the date the funds are received. (iii) KShs Component: At the Base rate ruling on the payment due date plus two (2%) percent for the period between 21st to 28th day from B/L date and seven (7%) percent for the period between 29th day from B/L date to the date the funds are received. (iv) Where the required invoices and supporting documents are not received by BUYER within ten (10) days from B/L date, payment due date will be as per clause 12.2.2. Late payment interest will be applicable either as per clause 12.3.1 or 12.3.2 depending on the number of days late. 21.3.3. For payments effected after the 45th day from B/L date, in addition to the above interest rates which shall still be applicable as in 12.3.1 and 12.3.2 above, the L/C charge on the Price Build-Up For Crude Oil Import Annex 2 will be adjusted to 2.4% of C&F. Provided that all proven third party charges associated with late payments shall be on account of the defaulting party. 21.3.4. The final day for receipt of payments shall be fifty (50) days from the B/L date and any defaulting party will be referred to the MOE. BUYERs who fail to pay for their share of the Cargo for three shipments within a period of twelve (12) consecutive months will not be allowed to participate in subsequent tenders either as BUYER or SELLER and will be referred to MOE for further action. THE KENYA GAZETTE 18th May, 2012 1762 1762 21.3.5. Late payment interest charges shall be payable fifteen (15) days after presentation of the invoice. If payment is not effected fifteen (15) days from presentation of the invoice, the defaulting party shall not participate in subsequent crude oil deliveries until such time when SELLER confirms receipt of payment. Provided that SELLER may agree with BUYER to retain the crude oil equivalent to the late payment interest charges. 21.4. Transfer of Entitlement: 21.4.1. Except where there are disputes related to OTS, SELLER shall transfer to BUYER the full entitlement as invoiced and paid without deduction or set off within the next working day following payment by BUYER. Transfer of entitlement shall be by way of Stock Adjustment fax instruction to KPRL and Customs Form C-21 within one (1) working day after receipt of payment except under circumstances beyond SELLER‘s control which they can demonstrate. 21.4.2. In cases where late payment interest charges are due from BUYER, SELLER reserves the right to withhold equivalent crude oil quantities at the time of entitlement transfer until such time that the interest outstanding shall have been fully paid to SELLER. 21.4.3. In the event that a SELLER does not transfer stocks to BUYER on the day following receipt of payment, BUYER will be entitled to charge interest at the same rates as computed in the Late Payment and Penalty Clause 12.3 above. 21.4.4. Interest on late entitlement transfer charges shall be payable fifteen (15) days after presentation of the invoice. If payment is not effected fifteen (15) days from presentation of the invoice, the defaulting party shall not participate in subsequent crude oil deliveries until such time when BUYER confirms receipt of payment. 22. INSPECTION 22.1. The quantity and quality of the crude oil as determined by KPRL and confirmed by an internationally accepted independent inspector shall be final and binding on all parties except in cases of alleged fraud or manifest error. 22.2. SELLER shall provide KPRL with load port installation telexed/faxed inspection data, including a test on the Hydrogen Sulphide content of the Cargo at least seventy- two (72) hours prior to the arrival of the vessel at the port of Mombasa. 23. DISCHARGE CONDITIONS KPRL shall make all necessary arrangements with KPA for the provision of a safe berth and the provision of a pipeline from the berth to the KPRL crude oil storage tanks as provided for in Article VI of KPRL Processing agreement 24. DEMURRAGE 24.1. Demurrage if any shall be as per actual Charter Party Terms. However in the absence of these, the prevailing market rates shall be applicable. 24.2. Save as provided in sub-clauses15.3 and 15.5 herein below, if the time taken to discharge the Cargo is in excess of the time allowed, SELLER shall be entitled to recover from KPRL for all such time on demurrage at the rate as per the Charter Party Terms, whether or not such excess is due to any cause within the scope of Article XIX of KPRL Processing Agreement. 24.3. If the time allowed for discharging any Cargo is exceeded as a result of a fire, explosion or breakdown of machinery at KPRL as would for purposes of this Agreement be within the scope of Clause 19, the rate of demurrage payable by KPRL for such excess time shall be one half of the rate provided for in 15.1 above. 24.4. If by reason of her own deficiencies a vessel cannot discharge within the time allowed as provided for in 14 above, any excess of the allowable time caused solely by reason of the vessel‘s deficiencies shall be added to the time allowed and any other time the vessel does not maintain 100 PSI. Such demurrage charges as a result of the time delays shall be on account of the vessel. 24.5. If the time allowed for discharging any Cargo is exceeded as a result of fault or failure of the vessel or because discharge is suspended for vessel‘s purposes then it shall be liable for demurrage in respect of such excess time. 25. LATE DELIVERY 25.1. In the event that SELLER‘s vessel arrives seven (7) days after the allocated delivery date-range, then SELLER shall pay BUYERs USD 0.5 per MT per day pro-rata declared participation levels each day the default continues. 25.2. This amount shall be payable if the vessel does not arrive at Mombasa seven (7) days after the last day of the delivery date range and shall be computed from the day following the last day of the delivery date range and shall continue until vessel commences discharge. Further, these amounts shall be payable within thirty (30) calendar days after the date of the last day of the delivery date range. 25.3. Until such payment is effected in full and receipt of monies confirmed by all the aggrieved parties, the defaulting party shall not participate in any other tender either as SELLER and shall have its import license suspended or revoked by MOE. 26. DELIVERY DEFAULT 26.1. Delivery default shall be deemed to have occurred if vessel does not arrive and Tender Notice of Readiness to discharge at Mombasa within fourteen (14) days after the last day of the delivery date range. 26.2. SELLER shall be in default and shall be liable for the penalties detailed in the Non-performance Clause herein below. 27. NON-PERFORMANCE 27.1. Non-Performance by Seller 27.1.1. A SELLER who wins and is subsequently awarded the tender to deliver crude oil but withdraws from delivery of the same shall pay BUYERs a penalty of USD 15 per MT of tender quantity or part quantity not delivered. The amount shall be payable within fifteen (15) calendar days after the date of receipt of the demand note. 27.1.2. Until such payment is effected in full and receipt of monies confirmed by all aggrieved parties, the withdrawing party shall not participate in any other tender as SELLER. 27.1.3. If withdrawing party defaults three times within a period of twelve (12) consecutive months, they shall be liable to have their import license suspended or revoked by MOE. 27.2. Non-Performance by Buyer 27.2.1. A BUYER, who withdraws from purchasing the quantity tendered after expiry of the stipulated offer validity period, shall pay SELLER a penalty of USD 15 per MT of tender quantity tabled. The said penalty shall be payable within fifteen (15) calendar days after the date of receipt of the demand note. 27.2.2. Until such payment is effected in full and receipt of monies confirmed by the aggrieved party, the withdrawing party shall not participate in any other tender either as BUYER or SELLER and shall be deemed to have defaulted in base load processing. 27.2.3. If withdrawing party defaults three times within a period of twelve (12) consecutive months, they shall be liable to have their import license suspended or revoked by MOE. 18th May, 2012 THE KENYA GAZETTE 28. FORCE MAJEURE 28.1. Neither SELLER nor BUYER shall be liable for damages or penalties for any failure or delay in performance of any obligation hereunder other than obligation to make payment, where such failure or delays is caused by force majeure, being any event, occurrence or circumstance reasonably beyond any control of that party, including without prejudice to the generality of the foregoing, failure or delay caused by or resulting from acts of God, strikes, fires, floods, wars (whether declared or undeclared), riots, destruction of the oil, delays of carriers due to breakdown or adverse weather, perils of the sea, embargoes, accidents, restrictions imposed by any governmental authority (including allocations, priorities, requisitions, quotas and price controls). 28.2. The party whose performance is so affected shall immediately notify the other party hereto indicating the nature of such a cause and, to the extent possible, inform the other party of the expected duration of the force majeure event. The time of SELLER to make, or BUYER to receive, delivery hereunder shall be extended during any period in which delivery shall be delayed or prevented by reason of any of the foregoing causes up to a total of fourteen (14) days. 28.3. If any delivery hereunder shall be so delayed or prevented for more than fourteen (14) days, either party may terminate this contract with respect to such delivery upon written notice to the other party. 29. TERMINATION AND WITHDRAWAL OF PARTY 29.1. This Agreement shall automatically be terminated as against a party that terminates the KPRL Processing Agreement. 29.2. This Agreement shall also be terminated as against a party upon the occurrence of any of the following: (d) Dissolution, bankruptcy, insolvency, or appointment of a receiver, liquidator, or trustee in bankruptcy for that party. (e) Written notice to a party that a law has been introduced or changed or interpreted by any governmental authority so that it is unlawful for that party to operate or perform its duties and obligations under this Agreement or realize the benefits of this Agreement. (f) If such party ceases to carry on business. (g) If a party commits any breach of any of the provisions of this Agreement and, in the case of a breach capable of remedy, fails to remedy the same within thirty (30) days after receipt of the written notice giving full particulars of the breach and requiring it to be remedied, or such other notice period as specifically provided within the provisions of a clause. 29.3. Notice of termination or withdrawal under this Agreement shall not discharge or relieve the withdrawing party of any rights, duties, obligations or liabilities arising prior to such termination, nor prejudice any rights or remedy accruing before, at or in consequence of such termination, or any proceeding with respect to any such right or remedy including any proceedings by way of arbitration provided for hereunder. 30. ARBITRATION 30.1. If at any time during the continuance of this Agreement any dispute, difference or question relating to the construction, meaning or effect of this Agreement or of any of the Clauses herein shall arise between the parties, then the aggrieved or affected party shall give written notice of not less than Twenty-one (21) days to the other party of such dispute, difference or questions. 30.2. Any dispute with regard to any matter in connection with this Agreement shall be referred to a sole arbitrator to be appointed by the parties hereto and failing agreement on the appointment of such arbitrator then a single arbitrator will be appointed by the Chairman for the time being of the Kenya Branch of Chartered Institute of Arbitrators within twenty one (21) days. 30.3. The arbitration shall be conducted in accordance with the provisions of the Arbitration Act No. 4 of 1995 (Laws of Kenya or any statutory modifications or re-enactment thereof for the time being in force). The Place of Arbitration shall be Nairobi and the language of proceedings shall be English. The decision of the arbitrator shall be final and binding to the parties hereto. 30.4. The parties will apportion equally such costs of the arbitration including the fees to the arbitrator excluding any charges for legal or other representation by or on behalf of the parties. 30.5. Judgment upon any award rendered may be entered as a decree of the Court in any Court having jurisdiction or application may be made to such Courts for judicial acceptance of the award and an order of enforcement as the case may be. 31. ASSIGNMENT No party shall assign this agreement in whole or in part without the written notice to the other parties except to an affiliate as described in Section 154 of Companies Act Cap 486.Provided that transfer of more than 50% of the shares of either party shall be deemed to be an assignment within the context of this clause. 32. WAIVER Any waiver or concession that may be granted by a party(ies) hereto in regard to any of terms and conditions of this agreement shall not in any way affect or prejudice that party‘s strict rights hereunder. All such waivers or concessions may be withdrawn at any time without prior notice. No waiver by either party of any breach of this Agreement shall be considered as a waiver of any subsequent breach of the same or any provision. 33. GOVERNING LAW This Agreement shall be construed in accordance with and governed by the Laws of the Republic of Kenya. KABURU MWIRICHIA, Director General, MR/9600008 Energy Regulatory Commission.