Article 45 COMPLETION

45.1 The Contractor shall notify the Employer when it considers that it has achieved Completion of the Works. Where the Works are to be completed by Sections, this Article 45 refers to Completion of each Section as appropriate.

45.2 The Employer shall, as soon as practicable and in any event within 72 hours following receipt of the notice referred to in Article 45.1, inspect (as and if necessary) all work, and either:

  1. deliver to the Contractor a Certificate of Completion for the Works or any Section of them; or
  2. if reasonable cause exists for doing so, notify the Contractor that Completion has not been achieved, stating in detail the reasons therefor and the additional work that it considers still to be done to achieve Completion.

45.3 In the event that the Employer determines that Completion has not been achieved, the Contractor shall promptly take such action or perform such additional work as will achieve Completion and shall issue to the Employer another notice pursuant to Article 45.1. To the extent that the action or additional work requires a Variation, it shall be valued under Article 35. The procedure described in this Article 45.3 shall be repeated as necessary until Completion is achieved.

45.4 The Employer shall issue the Certificate of Completion or the notice under Article 45.2(b) no later than five Business Days following receipt of the notice under Article 45.1.

45.5 If the Employer fails to issue a Certificate of Completion or a notice under Article 45.2(b), then the Employer shall be deemed to have, and be treated for all purposes as having, issued a Certificate of Completion, whether it is actually issued or not, five Days after the receipt of the notice under Article 45.1. The CDB may, on application from a Party, confirm such Completion, but such confirmation is not a precondition to the effectiveness of any such Completion.

Article 46 COMMISSIONING AND PERFORMANCE TESTS

46.1 Where the Works are to be taken over by Sections, these provisions will be read as applying to those Sections.

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46.2 Any commissioning activities will be set out in an Appendix (if any) or otherwise agreed by the Parties.

46.3 Performance Tests are those tests (if any) required to demonstrate the achievement of the Contractual Performance. Unless otherwise agreed by the Parties, all Performance Tests shall be performed and completed prior to Taking-Over. Unless fully set out in the Contract, the Contractor will provide the Employer with the Contractor’s methodology for conducting the Performance Test(s) no later than the time set out in an Appendix (if any), or if there is no such time set out, the methodology will be provided at least 90 Days before the tests are to begin. Such methodology shall be in accordance with the relevant requirements of the Contract, and if no relevant requirements are set out in the Contract, then in accordance with Good Industry Practice.

46.4 When the Contractor determines that there are no impediments to conducting the Performance Tests, the Contractor shall give the Employer notice that it is ready to commence with the Performance Tests.

46.5 The Contractor shall give the Employer notice specifying the Date, location and nature of the Performance Test to be conducted:

  1. in the case of the first of such Performance Tests, no fewer than ten Business Days in advance; and
  2. in the case of subsequent stages of the Performance Tests, no fewer than five Business Days in advance.

46.6 Unless otherwise agreed, the Contractor shall afford the Employer all reasonable opportunity to attend all stages of the Performance Test at the Employer’s own expense. Provided that the Contractor has given proper notice and not prevented the Employer from attending, the Employer’s failure to attend any stage of the Performance Test shall in no way invalidate the results of the Performance Test or permit the Employer to allege that the Taking-Over Conditions have not been fulfilled solely on the basis that a Performance Test the Employer failed to attend was not validly conducted.

46.7 Each Performance Test shall be conducted under the authority and direction of the Contractor. If this Contract specifies that any stage of the Performance Test should be performed by the Employer or a third party appointed by and responsible to the Employer, then the personnel of the Employer or third party shall act under the supervision and instruction of the Contractor.

46.8 If the Employer is under this Contract or otherwise obliged to fulfil any obligation in order to enable the Contractor to perform a Performance Test, and the Contractor has notified to the Employer the timing, nature, quality and extent of the Employer’s obligation in accordance with the Contract7or any subsequently agreed or reasonable schedule, then the Contractor shall be entitled to assert a claim against the Employer pursuant to Article 35 in respect [Page61:] of delay or Cost caused by the Employer’s material failure to comply with its obligation. If the Employer fails on more than one occasion to fulfil any obligation in order to enable the Contractor to perform a Performance Test, without prejudice to any other right it may have, the Contractor may give notice to the Employer of a final time period of not less than seven Days in which the obligation shall be fulfilled. If the Employer fails to fulfil the said obligation within such time then, unless otherwise agreed, the particular Performance Test shall be deemed, unless otherwise agreed or required by the law of the Country, to have been passed and certified.

46.9 The Performance Tests shall demonstrate the performance levels of the Works and whether the Works fulfil the Minimum Performance, if any.

46.10 If the Performance Tests take place prior to Taking-Over and the Contractual Performance is not achieved, the Contractor shall be entitled to repeat the Performance Tests a reasonable number of times with a view to improving the performance of the Works. Achievement of Minimum Performance (if any) is a prerequisite for Taking-Over.

46.11 If the Works do not achieve the Minimum Performance, the Contractor shall take such measures as are appropriate and required to satisfy the Minimum Performance. If the Performance Tests take place after Taking-Over, and the Contractual Performance is not achieved, then, unless otherwise agreed, the Contractor will have one more opportunity to do the Performance Tests.

PERFORMANCE-RELATED LIQUIDATED DAMAGES OR BONUS FOR PERFORMANCE

46.12 If the Works in one or more respects fail to achieve the Contractual Performance but exceed the Minimum Performance, then Performancerelated liquidated damages8(if any) as set out in the Contract are payable.

46.13 The Parties agree and acknowledge that the amounts of liquidated damages (if any) specified in the Contract are agreed upon and fixed by the Parties because of the difficulty of ascertaining on the Contract Date the exact amount of damage to the Employer in such event. The Parties hereby agree that the liquidated damages agreed upon in this Contract shall be applicable regardless of the amount of such damage.

46.14 The payment of any such liquidated damages shall not affect the Employer’s rights to terminate this Contract pursuant to Article 57, should such right exist.

46.15 So long as the performance of the Works is equal to or better than the Minimum Performance, the agreed liquidated damages shall in respect of the relevant performance parameters be the Employer’s sole and exclusive remedy for the Works’ failure to achieve the Contractual Performance.

46.16 To the extent that the performance of the Works is better than Contractual Performance, the Contractor shall be entitled to a bonus calculated in accordance with the Contract, and as set out in an Appendix (if any).

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Article 47 TAKING-OVER/PROVISIONAL ACCEPTANCE

47.1 The Taking-Over/Provisional Acceptance9 Date shall be:

  1. the Date on which the Taking-Over Conditions have been met; or
  2. the Date on which the Employer, its agent or designee takes possession and control of the Works or any Section of them.

47.2 Taking-Over Conditions

Unless the Parties have specified otherwise, the following conditions shall be the Taking-Over Conditions:

  1. the Works have been completed in accordance with the Contract, except for minor work which does not affect the safety, operation and operability of the Works and is set out in the Punch List;
  2. the Works are fit for the purpose specifically defined in the Contract and, if applicable, are capable of being put into operation;
  3. the Performance Tests have been performed and passed in accordance with Article 46, testing Equipment has been removed and the Plant has been set to the settings specified in the Contract or, if no settings are specified, to the settings typically used for operation in accordance with Good Industry Practice; and
  4. the consumables, spare parts and special tools required by the Contract (if any) are present at the Site and are stored in accordance with applicable laws and Good Industry Practice.

47.3 On the Date of Taking-Over, the Employer shall take and shall be deemed to have taken possession and control of the entire Works or Section of them and shall thereafter be solely responsible for the operation and maintenance thereof and shall have the complete risk of loss or damage thereto, regardless of cause, provided, however, that this shall not relieve the Contractor of its obligations under Chapter 8, or from its obligation to perform such other work as remains to be performed after Taking-Over pursuant to this Contract.

47.4 The Contractor’s access to the Site and the Works after Taking-Over shall be governed by an Appendix (if any) and otherwise shall be permitted as needed to fulfil its remaining obligations (if any).

47.5 If the Works or any Section are to be completed in more than one step or phase, then an Appendix (if any), or such other reasonable stepped or phased schedules as established by agreement, shall apply.

47.6 When the Contractor believes that it has met the Taking-Over Conditions of the Works or any Section in accordance with Articles 47.1 and 47.2, it shall deliver to the Employer a notice thereof in the form set out in an Appendix (if any), and otherwise any other reasonable form if none is set out.

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47.7 The Employer shall, as soon as is practicable and in any event within 72 hours following receipt of the notice under Article 47.6, inspect (as and if necessary) all Works and the results of the Performance Tests and, within the time period stipulated in Article 47.9, either:

  1. deliver to the Contractor a Taking-Over Certificate for the Works; or
  2. deliver to the Contractor a Taking-Over Certificate for a Section or Sections of the Works; or
  3. if reasonable cause exists for doing so, notify the Contractor that the Taking-Over Conditions of a Section or Sections have not been achieved, stating in detail the reasons therefor and the additional work that it considers still to be done to achieve Taking-Over.

47.8 In the event that the Employer determines that the Taking-Over Conditions have not been achieved, the Contractor shall promptly take such action or perform such additional work as will achieve Taking-Over and shall issue to the Employer another notice pursuant to Article 47.6. To the extent that the action or additional work requires a Variation, it shall be valued under Article 35. The procedure described in this Article 47 shall be repeated as necessary until Taking-Over is achieved.

47.9 The Employer shall issue the Taking-Over Certificate or the notice under Article 47.7 no later than ten Business Days following receipt of the notice under Article 47.6. The Taking-Over Certificate will be retroactive to the Date of Taking-Over under Article 47.1. If the Employer fails to issue a Taking-Over Certificate or a notice under Article 47.7, then the Employer shall be deemed to have, and be treated for all purposes as having, issued a Taking-Over Certificate, whether it is actually issued or not. The Taking-Over Certificate shall or shall be deemed to set out the Date of Taking-Over, which shall be the Date or Dates of fulfilment of the conditions set out in Article 47.1. The Employer shall not be entitled to withhold payments claimed by the Contractor on the basis that the Taking-Over Certificate was not issued or properly issued.

47.10 The Taking-Over Certificate, whether deemed to be issued or actually issued, shall operate as an acknowledgement by the Employer that the Contractor has fulfilled its obligations under this Contract to the extent that this Contract called for such obligations to be performed prior to Taking-Over, except for such work (whether minor or not) as is mutually acknowledged to remain outstanding, whether under a punch list, snag list or other check list of outstanding work to correct Defects (the “Punch List”).

47.11 If the Taking-Over Certificate was deemed to have been issued by the Employer, then the Employer shall be entitled to require the Contractor to fulfil any Contractor obligations left unfulfilled at Taking-Over. Such work and the work required under Article 47.10 shall be performed at the Contractor’s expense.

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47.12 The Employer at its sole discretion may at any time, by giving notice to the Contractor, elect to waive any of the Taking-Over Conditions, provided that the Contractor expressly acknowledges that the Employer shall, without prejudice to the Employer’s other remedies under this Contract, be entitled, but not obligated, to make that election in accordance with this Article 47 on such terms, including a rebate on the Contract Price, as the Parties may agree.

Article 48 ASSESSMENT PROCEDURES AFTER TAKING-OVER

48.1 To the extent the Parties have agreed that certain assessment procedures are to be or permitted to be conducted after Taking-Over, the provisions agreed between the Parties with respect to such procedures shall apply.

48.2 For all procedures, the principles set out in an Appendix (if any) shall apply. If there are no such procedures set out in an Appendix, then Article 47.4 shall apply.

48.3 If, for reasons not attributable to the Contractor, any tests after Taking-Over cannot be completed during the Defect Correction Period (or any other period agreed upon by both Parties) then the Works shall be deemed to have passed the tests after Taking-Over.

7
The question should be dealt with in an Appendix.

8
Parties may, as an alternative, construe this issue as a price reduction instead of liquidated damages. In this case they should carefully check consistency with the clauses on performance-related liquidated damages.

9
The concepts of Taking-Over and Provisional Acceptance are largely synonymous and are synonymous in this Contract, but people in different industries may be more comfortable with using one expression or the other