BEFORE THE HONORABLE ARBITRATORS

Mr. Naim-ur-Rehman, Barrister-at-Law

And

Mr. Sher Afgan, Advocate at Karachi

IN THE MATTER OF ARBITRATION

Crescent Steel & Allied Products (Private) LimitedClaimant

Versus

Sui Southern Gas Company Ltd...Respondent

ANSWERS TO THE QUESTIONS OF THE CLAIMANTS COUNSEL BY

RESPONDENTS WITNESS

Q No. 1: Did the Respondent (SSGCL) at any time before accepting delivery of the

accepted goods issue to the Claimant (CSAPL) a notice of termination of

the contract in question under Condition 13 of the General Conditions of

Contract, and if so, can he produce his notice?

Ans: No; I would, however, like to explain that CSPAL had already been informed

that it was in default of its contractual obligations. According to the contents of

SSGCLs letter dated 29.10.1995 (Exhibit R/1 to my Affidavit-in-Evidence),

CSPAL was informed that it was in default, and its request to extension in

contracted delivery period was also refused vide the said letter. Moreover,

according to the terms of Clause 25.2 of the General Conditions of Contract,

payment of liquidated damages was by way of compensation and not as penalty

and therefore there was no need to issue a notice of termination of contract

before acceptance of delivery under Condition 13 as referred in the Question

asked.

Q No. 2: Did SSGSL inform CSPAL while accepting delivery of the contracted
 goods that it was doing so only after reserving the right to claim liquidated

damages, and if so, can he produce such intimation?

Ans: CSPAL was informed as early as 25.9.1995 that SSGCL was within its rights to

invoke the relevant provisions of the Contract (which included encashment of

Guarantee to recover liquidated damages for late delivery) to safeguard its

rights. In any case, it was understood and agreed to by CSPAL that in terms of

Clause 8.5 of the General Conditions of Contract, CSPAL would not be absolved

of its liability to perform on the encashment of Performance Security. In this

view, there was no need to inform CSPAL before accepting delivery of goods

that SSGCL had reserved its right to realize liquidated damages. (Fax dated

25.9.1995 is attached hereto and marked as Annex-A/1)

Karachi
(Imdad Hussain Baloch)
Dated: Witness for the Respondent (SSGCL)