Web viewExtension of time for completion: Refer to General Conditions of Contract, Section 14.0 & 14.1.0, which was not operated for any grant of extension of time on

Services Contract Termination Notice Phase 2

To, 27/28/29/30-03-2012

M/s ABCKind Attn: Mr.

Project: 225 MW Gas based Power Project - Phase-II

Contract References:

1. Service Contract reference: /02-02-MEC-04/WO-170/2010 dated 13th December 2010, awarded under provision 18.0, Award of contract covered within chapter ‘Instruction to bidder’.

2. Objective of this contract is to deliver EPC demands/requirements for Ultimate Purchaser Company/Client/Owner/Ultimate Purchaser: M/S……………….

3. Contract Order Consideration Defined Value : Refer to Section 2, (7.65 crores IR complete in all respects as a firm fixed price package)

4. Contract Executed On: 13 December 2010

5. Contract Completion Date: 30th Sep 2011 and 31st Oct 2011 for 1st and 2nd unit respectively

6. Work Completion Date: Clause 4.0, both units to be commissioned before 31.10.2011.

7. Extension of time for completion: Refer to General Conditions of Contract, Section 14.0 & 14.1.0, which was not operated for any grant of extension of time on contract completion time due to receipt of no such application from 2nd party, contractor, by 1st party, employer. Nevertheless, a grace period equal to gap between scheduled availability of foundations & actual date of foundations availability being 1st Nov, 2011 has been allowed to be added on contract completion date.

8. Contract Title: Quoted from contract form document called Work Order. (Scope of Work)

“Work Order (WO) for custom clearances, Loading/Unloading, Transit Insurance, Transportation, Erection, Testing & Commissioning, etc. for the complete system of (2) nos Unfired Dual pressure type Natural Circulation Horizontal Gas Flow HRSG & this HRSG for our 225 MW Gas based power project at ………………………..”

9. Definition on Contract parties:

First Party: M/S ……………………………Called EPC Contractor/Employer

Second party: M/s. ………………………………, Called Service Contractor

This Notice Title: Servicing ‘Contract Termination’ Respecting Foregoing Contract under provision of clause 59.0 ‘Notices’ covered within ‘General Purchase conditions’.

Servicing Action:

1. Termination of contract initiated by 1st party, called Employer/EPC contractor & being serviced by it on 2nd party, Contractor. Title & Addresses of respective parties defined in foregoing.

2. For his Kind Attention, Representative of 2nd party on record, named as Mr. ………………………

Dear Sirs,

Forward Reference Note:

1. Kindly, refer to Contract Termination Notice being issued Under foregoing contract Work Order Clause 15 (right of acceptance) & Work Order Clause 8.1 & 8.2 (Foreclosure of contract), General Purchase Clause 18.1.0 (Termination of order by Purchaser) in conformance with general

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good professional practice on such similar contract management, as well as natural practice, conducted on such construction & installation contracts.

2. Disastrous state of contract prosecution as on this day of contract termination when, actual progress is around 10 to 15% only, which cannot be considered efficient at all on project performance measurement criteria. It off lines too distant to reach required near completion date that had already been overdue for last 5 months back being 31.10.2011. Though, gap allowance due to delayed foundations has been compensated by including that gap period on to contract completion date added. Still, it does not permit any recovery on lost revised schedule time frame. Project has reached to earn many irrecoverable losses quantities depending on various applicable reasons such as suspension of site operations by 2nd party, delay on execution by 2nd party, lack of contract administration by 2nd party & incomplete statutory procedures by 2nd party risks involved.

3. Detailed descriptions have been elaborated hereinafter in support & justification of this notice of contract termination to maintain equity based action, protection of contractual rights of both parties involved & on ‘front end execution level’ project interest operation being conducted with good intention of 1st party, who has tried its best with 2nd party, but failed to resolve relevant critical issues consequences of which, have marred achievement of real objective set forth or construed to have been set forth so, in body of contract & mutually read integrally with mutual reciprocation of provisions from & among all other documents, as defined within this contract provision/s referred under section 21 Documents & Specifications.

4. Failure on part of realizing provisions/deliverables of required statutory documentations & materials deliveries to project, have caused irreparable damages to state of project prosecution, just because of rigidity adopted on conduct by you 2nd party, contractor as well as, decisive reservations applied by contractor under calculated determinations, which are not expected to be applied by a prudent & diligent experienced contractor of having earned/attained such level of expertise giving competent qualifications to prosecute any such high profile professional services contract, confined by limited scheduled frame to commission industrial infrastructure project that definitely, shall adversely impact national development as well as, prospects of 1st party.

Background Circumstances leading to service of this Contractual Termination Notice expressed as contractor’s demonstrated absolutely abnormal inefficiency on contract scope of works performance.Current Cause based on all previous records, leading to Termination Consideration: This Contractual termination notice is being served on to 2nd party in consequence to our 1st party ……………………. Pvt. Ltd pre termination notice sent to 2nd party M/s. ……………….. on this contract, notice served dated March 2, 2012 to which, 2nd party M/s. ……………… have responded absolutely non-affirmatively for certain expected immediate required project damage control actions with giving only/merely a description ‘pre termination notice premature & Vague’ without even, caring for various serious concerns raised & also, without extending to us, either any concrete confirmation or any curing to be applied on sick state of contract performances or resorting to remedial actions, that could be proposed from your end, 2nd party, or either, regarding resorting to relevant contractual actions or which could be implemented further for achieving good performance effects in an overall interest of project as well as, in interest of both contractual parties. Despite 2nd party’s invoices stage payments processed via many releases as detailed elsewhere, 1st party has been rendered helpless on project while, project is now, in severe sickness state.

Detailed Causes with project history of contractual scope of works non performances activities or operations leading to contract termination:

1. Reference to foregoing Contract enforce/existing between you as 2nd party & we, as 1st party, it has been hereby recorded that, as parts of your contractual obligations required under

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responsibility performance deliverables, 2nd party M/s ………………….., is required to carry out its responsibilities under work order provisions of section 1 & all subsections 1.1 to 1.6, describing clearly its included & covered scope of works within ambit & construction of this Services Contract, which includes namely, operations of various activities but, not limited to these, yet mentioned herein for reference only, such as factory testing or other tests, customs clearance, inspections, loading/unloading equipment, transit insurance, transportation, unloading at site, safe storage, site handling, site movement, system assembly, equipment or vessel erection, pre-commissioning, testing & commissioning etc. for complete defined system, including all necessary statutory & contractual approvals and compliance with all procedures of IBR regulation & approvals of 2 #s Unfired Dual pressure type Natural Circulation Horizontal Gas Flow HRSG & this HRSG shall operate in between 3 Deg C to 40 Deg C temperature for Kashipur Power Project situated at …………………….. Technical scope will be as per Technical Specifications mutually agreed. Steam output HP 113 Tons & LP 136 T for GT performance at 23 Deg C ambient temperature, and schedule tracking with time frame for being on line with project work completion schedule in all respects whatsoever, as explicitly included within all foregoing referred sections on or before 31.10.2011 that being contractual performance completion dates as agreed by both parties.

2. No one can be convinced with your 2nd party updated performance quantifying to only 10 to15% of this project’s contract scope of works /& on this account, which was required to be closed on 31.10.2011+allowed tacit extension period as indicated in foregoing, & of course, which progress earning mark even after a lapse of 5 months or whatsoever, post contract completion date, is far below even consideration of ‘non satisfactory’ level mark, duly confirmed/corroborated far below your expected devotion & dedication applications of efforts for performance, which being horrifying in its entirety while, you have not been performing on site in any areas for more than 4 weeks (since Feb 16, 2012) & in particular, since, you suspended all activities on site & therefore, we had decided to serving on you a work resumption pre termination notice that was sent to you on March 2, 2012 since then, you did not resume project works on suspended activities that were suspended unofficially & unilaterally at your 2nd party’s end.

3. In fact, we have tried our best to pursue your management but, ultimately drastically, failed in our efforts to successfully have reinstated you on site for balance contract performance. We have noted that you could not meet commitments made to us on this contract despite adequate contract duration agreed/allowed, & also, you are not willing as well, to carry out remaining scope of 85% to 90% of this contract works. Keeping abreast for considerations, achieved progress versus scheduled progress, status of this contract stands equivalent to a non starter & contractually contemplating, by an indicative understanding evolving out of this status, we are of an implied active opinion that you did not have any constructive interest in this contract prosecution but, just promised us to carry out this project without any good business Will so to do. Or else, another reason could be that you intended under some scheme to bar another bidder to win this contract. Facts may be well known to you only. 85% to 90% remaining contract scope is too heavy to be performed in shortest duration while, contract completion date has already been overdue by 5 months or as indicated in foregoing. For your reference, Indian Contract Act includes certain provisional definition, which covers your contract history real acts on this contract status, as of today.

Quote:Indian Contract Act "Fraud" defined- Provision 17.-"Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:-(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true ;(2) the active concealment of a fact by one having knowledge or belief of the fact ;(3) a promise made without any intention of performing it(4) any other act fitted to deceive;(5) any such act or omission, as the law specially declares to be fraudulent.

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Unquote:Out of foregoing quoted provisions, points 3 to 5 could be applied in this case, as you entered into a contract with us with an intention not to perform it, which is evident & justified by your suspending all works merely after carrying out only 15% scope. Whatever, could have been reasons, performances on contract must not have been suspended unilaterally. Grievances if any, 2 nd part had, should have been resolved separately without impacting adversely on contract performance.

Non performed activities included or covered within its scope of works, have been detailed or elaborated on other paragraphs indicated hereinafter below title in bracket (Project Actions / Non Performance / Snags / Punches-Section A to Section E) for your reference & understanding.

1. Based on certain delaying tactics you have redundantly adopted on this contract to jeopardize project deliveries & further cause damage to our reputation on professional business market, we are not interested to allow you any further, to avoid 1st party earn bad reputation in market.

2. We have noted certain concrete facts that are being recorded for your reference & following actions & all these observations, shall constitute ‘body of contractual termination notice’ that is being serviced by this correspondence.

3. It is on record on agreed BBU ‘billing & payment status’ of this contract that 2 nd party’s invoices respecting ‘advance payment serial #1’, ‘logistics payments serial # 2.1 to 2.3’, ‘erection components serial # 3.1 to 3.2’ as indicated on status, invoices amounting to rupees 1,77,17,124 were processed against rupees 1,79,84,874 raised.

4. This Notice is being issued in continuation to our Pre-Termination Notice served on you dated 02-03-2012, followed by Remider-1 to Pre-Termination Notice dated 09-03-2012 and subsequent, mail sent to you dated 13-03-2012 in this regard.

5. This Termination notice & all its contents shall, with all statutory legal & contractual rights, be utilized on various relevant documents on all future actions on legal or other proceedings that would be admissible under all applicable laws of India, all courts, offices & others whatsoever, within jurisdiction of project location & location of jurisdiction defined within contract.

Project Actions / Non Performance / Snags / Punches: Contractual Records/Notifications/Communications/Merits-Expressions/Required Actions Not Committed to construed & as demanded on contract performance. Section A:

1. Statutory Approvals:

a) In order to get IBR approvals in time, we successfully & timely, provided/extended our utmost technical & all other supports/supporting documents to you 2nd party to process, apply & obtain required regulatory approvals in time. We have been regularly communicating with you on record in this relevance since, 5th June 2011 till date via emails wherein, consequently, you have failed to perform deliveries /failed to deliver this part of contractual obligations. You 2nd party have delayed submission on manufacturing drawings and obtaining necessary approval, In fact, manufacturing permission was obtained only on 09 th

September 2011; you have not made efforts sincerely & intentionally, condoned to resort to required care about your responsibility on contract. You 2nd party have also, failed to obtain Boiler Maker No. SRV-03 and SRV-04 erection permission from Chief Inspector of Boiler in writing till date. To fulfill relevant applicable regulatory requirements of statutory bodies, we had undergone several rounds of discussions and made email communications with you, 2nd party, in spite of that, also, you 2nd party have not fulfilled required statutory IBR compliance, which is considered a high degree of deviation or aberration/non complying on implementation of contract provisions & IBR regulations since, no statutory concessions can be allowed on this contractual & statutory operation, either by law of land or concerned statutory authorities on such non performances on equipment quality system & regulatory requirement.

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b) You have failed to submit relevant inspection certificates as per IBR Forms and obtain necessary approval from concerned Inspecting Authority: you 2nd party failed to act in time consequently, with that inaction on your part on obliging division on responsibility on this contract, delayed procuring delivery of necessary permission required before starting of erection/installation of equipment, which is resulting in schedule time overrun. In addition to this, it was surprising to note that you 2nd party have not even approached relevant authorities for getting necessary clearances along with appropriate documents to support, such as dispatch clearance certificates for pressure parts, welding procedures, weld detail drawings, etc. per IBR 1950, that are considered necessary for support in relation to issuing/giving a clearance. Even after making number of communications to you 2nd party in regard to take-up issue relating to statutory compliance since June 2011, and allowing you reasonable time for its compliance, you have not acted upon to comply with carrying out effectively your responsibilities on this contract.

Contract clause No 3.03.00 of Technical Specifications VOLUME – II, SECTION – A (scope also, includes obtaining all necessary approvals. HRSG supplier has to ensure due IBR certifications applicable as per provisions of IBR & its amendments) & Reference to clause 2.00.00 Intent of specifications, contract clause No. 2.01.00 (under 2.00.00 reference codes & standards), 2.02.00 (statutory requirements IBR approvals), 2.02.01 compliance to IBR provisions, 2.02.02 (equivalent international codes, when IBR does not apply), & 2.02.03 (definition of contractor’s responsibility) all provided & read together and clause 14.05.00 (non destructive examination), all foregoing references provided for inference as applicable inclusions covered within Technical Specifications VOLUME – II, SECTION – B, Scope of Supply Matrix ‘contract technical specification’ VOLUME – II, SECTION – E 2 clause no. 4.01.00 @ Sl. No. 19 provided under matrix part C others, clearly states that “Approval from Local Statutory Authority, including IBR certification if any” is in contractual scope of bidder/contractor.

It is made explicitly clear that no concession application was moved by 2nd party, contractor to 1st party, employer for obtaining any concession in this regard.

You have also, failed to comply with ‘General Conditions of Contract’ Clause No. 3.0.0. ‘Regulation of local authorities & statutes’, which clause is applicable for relevant statutory inspection fee payments.

Keeping in our considerations for evaluation of your performance measurement, as indicated on foregoing descriptions regarding your contractual obligation lapses, you 2nd party have not performed in line to contractual requirements as agreed in accordance to provisions on this contract, its General Purchase Conditions & relevant clause No. 42.0.0.(Supplier’s default) is importable & applies on your 2nd party bad performance due to elaborated facts provided with detailed explanations, which amount to shear non performance of contract to an extent of recorded extremely high percentage as explicitly calculated & indicated on relevant annexure.

2. Drawings and Documents submission:

a) You 2nd party have not handed over copy of approved Manufacturing Drawings till date to us, IBR Forms for pressure parts already at project site. Failing to comply with “final drawings” is a non compliance to clause no. 24.1.0, clause 23.2.0 Engineering Data part under ‘General purchase conditions’ of contract which provision requires ‘All Engineering data drawings & documents submitted by supplier after final process including review & approval by purchaser/EPCC shall form part of order documents & entire supply covered under these specifications shall be performed by purchaser/EPCC in writing. In case of government approval is required to be obtained after installation of goods; supplier shall provide final drawings as erected for submission to statutory authorities’.

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b) Till date, you 2nd party have not submitted subcontract scope of works, erection drawings and procedure, Drawings for piping, all mountings and accessories, QC (Testing & Calibration) Reports, maintenance manual for Boiler, boiler mountings & accessories even after, several repeated communications were sent to you on records from our office for your responses/corrective actions.

The above mentioned points a & b shall be considered and served as per general purchase condition clause no. 18.2.0 “Termination of Order by Purchaser”.

Section B

1. Project Co-ordination Meeting: We have attempted to apply all possible efforts to remove or chart out various discrepancies by inviting you 2nd party to co-ordination meetings several times to confer, deliberate and resolve all critical risk factors/issues, which are causing delays on scheduled project execution progress such as, conformance to time allowed, demanded quality levels, to discuss recovery time schedules in completing SRV-03 and SRV-04 erection since 12-01-2012, wherein, you 2nd party have not corresponded positively for long time. Even after, continuous follow-up with your site representatives, your project and construction managers, till date, you have not responded with your erection planning schedule. Failure to join co-ordination meetings amounts to clear non compliance/breach of condition to Clause No. 30.1.0 Coordination meetings under ‘General purchase conditions’ of this contract.

2. Dead Lock:

You 2nd party have raised invoice against 3rd Lot Shipment items for Customs Clearance and Transportation to project site, which is inappropriate since, raised invoice is not considerable according to agreed BBU break up of payments as/for following/below mentioned item supplies/deliveries are still pending for shipment while, you have claimed payment for their Customs Clearance and Transportation;

a) Supports and Hangers of Pipelineb) Drain & Air-vent Pipelinec) HP Pipelined) LP Pipelinee) Nitrogen Pipeline Systemf) Chemical Dosing Systemg) Sampling Analysis Systemh) Blow down Tanki) Expansion Indicator

We have intimated/advised you in writing vide mail dated 14-02-2012, 20-02-2012, 28-02-2012 and as communicated by phone by our Project Engineer looking after control & supervision for this contract’s your scope of works, to 2nd party’s Project Manager and Accounts Manager, & also, followed through verbal communication dated 22nd January 2012, that existing submitted invoice is not appreciable unacceptable and cannot be processed and further following which, we requested them to raise/submit a fresh/revised invoice requesting contractually correct/truly applicable valuation amount. Non-corresponding to our request, you 2nd party conducted in an untrustworthy, non professional & non contractual manner. Consequently, by this unbecoming conduct, you tried @ your level best to force us to process your invoice in whatever form, it has been submitted. We are still being forced by you to process this invoice for approval.

We have also, communicated to/provided you “All test reports and IBR Forms to be used for pressure parts, (received/delivered at site), should be submitted duly filled in order to get/support services payment released for Phase-II services contract” during our project review meeting on 4th February 2012 and vide our mail dated 14-02-2012 and 04-03-2012, however, you 2nd party have failed to confirm or comply with in this regard and submit test

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reports as well as, IBR forms for pressure parts supplied at site till date. This amounts to non compliance/clear violation/aberration of Contract General Purchase Condition’s clause no. 12.3.0, whereon, provision under sub clause (F) required documents should be furnished by supplier for arranging approval of payments.

During our discussions and meeting at ………. on 4th February 2012 and vide our e-mail dated 22-02-2012, and other earlier communications wherein, we have promised to release of your legitimate payments provided, you submit test certificates and IBR forms for components transported/delivered to project site, due to facts, that these are statutory and contractual requirements. Despite you received documents directly from supplier/vendor, requirement still remains incomplete to fulfill contractual obligations on your part.

Suspension of Work at Project Site: You 2nd party have stopped/suspended unofficially, erection works and resorted to strikes through your contractor from 16 th February 2012, which situation has been leading to sabotage this project deliveries & further jeopardize whole project. Per clause No. 15 right of acceptance under Work Order since, per clause no. 18.1.0 “Once the work, without any lawful excuse under these conditions suspended, for fifteen (15) days after receiving notice to proceed…”. You 2nd party have suspended works at site for more than 15 days whereby, we are well within our contractual rights to serve on you, this contract termination notice.

3. Discipline at Project Site: You 2nd party have engaged in unlawful activities within site by obstructing movements of vehicles through main entrance gate and threatening, scuffling with security staff at site, which is considered a breach of contract per clause no 8.1(ii & iii) of Work Order under clause 8.0 Foreclosure of contract, which provisions, you have failed to respect to.

4. Manpower and resource deployment: in spite of repeated requests as on records, for mobilizing for contract performance, agreed scheduled of manpower, equipment & other required resources, failing respecting their continuous deployment for whole currency as included & required on schedule, resulted in inordinate delays in execution/contract performance of this contract project, that amounts to a failure on your part 2nd party, under operation of clause no. 19.0.0 of general conditions of contract (manpower report).

As per clause no19.1 of General conditions of contract, contractor to submit employer/EPCC on 1st day of every month, a manpower schedule for month skill wise & area wise, for application of entry permission. Provision not complied with.

As per clause no: 19.2 of General Conditions of Contract, contractor to submit employer/EPCC on 1st day of previous month, a manpower schedule for month skill wise & area wise. Provision not complied with.

5. Sabotaging Project by creating disruption in supply chain: your mail dated 22 Feb 2012, you have instructed Mr. 2nd party China Ltd stating with message “Do not dispatch any material to either 1st party or 3rd phase till further instructions from 2nd party India”. Foregoing referred message indeed confirms your intentions not to carry out further works on this 2nd phase contract. You have charted out/adopted a non cooperative negative stand that you shall not work/and abandon this 2nd phase service contract. Moreover, you shall also, influence other/s vendors & subcontractors to stop/hold supplies any further even though, we had opened a LOC valid up to 24.2.2012 & claimable up to March 15, 2012 in favour of supplies. Such work stop conduct on contract by contractor as well as, inciting other lower tier vendors, is untenable, illegal, non contractual, bad business practice while, all such activities are good enough to restrain & impact adversely professional & business relations between 1st party & 2nd party, & consequently, would serve no constructive purpose. Work Order Conditions clause no. 8.0.Foreclosure is attractable.

Section C

Status of Boiler Erection

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1. Mechanical Erection:

(i) Except 8Nos of column erection in SRV-03 and SRV-04 and 25 numbers of HARP hanging in SRV-03 and 33Nos. of HARP hanging in SRV-04 executed at site till 02-03-2012(Service of Pre-Termination Notice), rest all mechanical Contract Scope of erection works are pending as on Date .

(ii) Electrical, Control & Instrumentation: 100% Contract Scope of work for erection and commissioning works in Electrical and C&I are pending as on date.

2. Payments: It is on record that we have released all your due payment progressively well within reasonable & prescribed time. But, you have started conducting non-contractually when factually, around 85% to 90% of contract scope of works yet, remains to be completed grossly involving erection and commissioning. On top of that, you have not yet, delivered all materials procurable on third lot against which, you have raised invoice in full. Your subcontracting vendors have suffered on account of receiving no payments that you failed to pay to them. Contractually, Non making payments to your sub vendors/subcontractors, is a gross violation/non compliance to provision on contract conditions 15 (Right of acceptance) as well as, clauses 15.1 & 15.2, of work order, operable jointly.

1. Project Duration: Project was agreed to complete on or before 31st Oct 2011, however in interest of project we, 1st party have been forced to give concessions to you to cope up with project schedule even up to Feb 2012. Instead of acting swiftly and to resort to overcome delays, you are prolonging project duration for want of non related issues to this contract thereby, affecting overall schedule. Till date only 10 to 15% of the erection has been completed. Due to your unsatisfactory performance, clause no. 15 Right of Acceptance of Work order conditions shall be applicable.

Section DCorresponding Mails-Consideration of Various corresponding mails & responses from either party/Impact by these mails on project performance/Deliberations/Non cooperation attitude by 2nd party/Attempts by 1st party for resolutions. Objective of this deliberation is to present causes of delays on actions that were purported to be resorted to by 2nd party in particular.

1. Following recent mails in particular, give evidences to what an extent, this contract’s very significantly valuable time has been wasted on this prestigious priority fast track based project. It is not clearly understood from these mails, what intention 2nd party, contractor had established in mind to centralize issue of due payments from time & again, despite 1 st party had regularly paid to 2nd party in commitment, conformance & compliance to relevant & implied provisions included within this contract.

2. No instant has been noticed whereupon, any reciprocal promise on this contract has remained a non committal on part of 1st party. 1st party has effected with honour, all contractual payments in line to provisions of payment related demands as far as, these demands have been contractual, realistic & appreciable.

3. At certain instances, 2nd party has irrelevantly & irrespectively, tried to intrude into this contract, contractual effects pertaining to phase 3rd contract that has been under suspension for long, which may or may not be reaching to its reinstatement. Contracts are independents in eyes of Indian contract law or whatever, national or international law, until, such an expression particularly, included within a single contract form covering all such related contracts even though, lump sum amounts for various included contract parts are defined accordingly, leading to single lump sum amount payable.

4. It is incorrect in this case to deliberately & desperately, link each other in a net chain for sake of constructing illogical arguments. Contract respecting 3rd phase shall be dealt with independently of this contract as well as, 1st phase contract. 2nd party has been frequently tried either to stop or to suspend activities referring to impacts transferred from non operations, caused on that 3rd phase contract, that got no issue or relation to deal with this 2nd phase contract.

5. Even, materials ‘shipment stop order’ given by 2nd party. 1st party promised to pay in lieu of documents & materials. 1st party also, with courtsey tried its best to support 2nd party with certain affordable loan but, 2nd

party had some other designs or reservations that cannot be contemplated by 2nd party contractually.

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References to mails: Comments to following mail from 2nd party to 1st party & vice versa: 1. Underlined statements clearly indicate that interest of project has been condoned by 2nd party for sake of

payments only. No commitments that were included on mails, have been honoured in letter & spirit. 2. Illogic responses are given just for response sake. 1st party already accepted regarding possible actions

that could be realized to resolve certain issues but, 2nd party placed its intention ineffective. 3. 1st party tried its best to resolve issues. Various solutions proposed by, but rigidity by 2nd party demolished

all possible access to resolutions, which could help resume site prosecution.4. Why revised invoice is a question mark here, when it can be submitted easily by 2nd party? 5. IBR documents for 2nd phase denied for no reason by 2nd party. 6. Statutory requirements are a must & should have been effected long back. 1st party could not make out from

responses, what 2nd party intended to achieve by such delayed actions or no actions at all, is out of common contractual understanding.

7. 2nd party seems to have decided, as inferred from various corresponding mails that they would not move further in compliance to contractual provisions even, if they have to move away from contract.

8. Such ignorance on part of 2nd party has caused severe losses to 1st party, that 1st party is contractually, entitled to be compensated by 2nd party, as shall be tracked in to later, when consequences of termination of contracts do start playing their legal, contractual impacts & effects on all relevant stakeholders.

22 March 2012 10:46/Dear 1st party,Please take care and consult with Mr ……. because I have written to him this morning and have to decide our next step if you take such aggressive action.I don’t feel it is in either party interest to ignore the very significant financial exposure that we have incurred on your behalf.I ask you to retract this e-mail.Kind Regards 2nd party

From: 1st party /Sent: 22 March 2012 10:46/To: ……….Cc: ………….; 1st partySubject: RE: Discussion Dear Mr. …………..,Thanks for your call and subsequent mail.With reference to the discussion, we have waited for your representative to deliver IBR documents. There is no meaning in waiting any further as far as pending scope of contract is concerned, we are proceeding further to take care of balance scope of work on your account in interest of the project. Best regards/1st party

From: 2nd party /Sent: 19 March 2012 22:08/To: …………………Cc: ……………………………….Subject: DiscussionDear Mr ……………,Sorry I lost your call because no charge in the battery in my mobile phone.I fully understand the situation from ……………… point of view but it does present us with difficulties too. Our banks loan money to us just like you receive project loans. We have to pay back when we get paid and also pay suppliers.……………. and I did not have a great difference of opinion about how to solve these problems. We almost reached agreement. I am perfectly happy to pick up where we left off if he wants to call me. Or I can call him. Holding IBR documents has no financial benefit to 2 nd party. The outstanding actions at site are not excessive so if release of IBR documents helps to secure the gas supply that means you can finish the job I just want a call that says to meet and arrange us to re-start work and remove the threat of cancelling the erection contract.Kind Regards/2nd party

Dear Mr 2nd party With reference to several earlier mails and in continuation to our supplier’s mail and also the inspection agency that the IBR documentation has been sent from China to your office and you are withholding those documents voluntarily for reasons best known to you. You are hereby instructed to submit the above documents either to statutory authorities or at our ……… office within 24 Hours. If we didn’t receive the documents within this stipulated period we will be forced to approach the concerned authorities.Best regards1st party Dear Mr 2nd party,We are willing to do everything, but now in a sequence and logic. But before we do anything, we want to receive IBR folder for phase 1 which is ready with your India office and documents for supplied parts for phase 2. Your Mr ………. is aware of these documents. (Form 2, 3, 4 and 4A)Please depute someone to our office who can take decisions on your behalf to set up sequence of events.Regards/1st party

References to few following mails: Comments to following mail from 2nd party to 1st party Good messages by mails but, no results. Document not provided. 2nd party has lost precious project time for no targets but, adding to further cumulate problems. Commitments made, but not honoured.

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From: "2nd party Date: Mon, 12 Mar 2012 06:52:26 -0000To: <1st party>Subject: RE: Phase-II Supply Contract: IBR Documents for Work Number R-183-2010/SRV-3 and R-183-2010/SRV-4

Dear Mr 1st party,The documents for Phase 1 & 2 are ready and will be sent to our India office by courier tomorrow. I hope they can be received to your hands quickly and that you can give instruction to remove the barriers preventing handover. I regret that I didn’t see any indication of positive responses thus far to give me comfort that I need to protect fellow shareholders. Some actions can wait for a meeting but most are straight forward actions that are not difficult to implement in my opinion.What do you wish me to do now on Phase 3? It is March that was the deadline that you set on November 20 th 2011 for giving a decision. We can either submit our claim for standing down and all associated costs for effect on phase 2 or we can extend timescales provided we have a formal agreement.Kind Regards2nd party From: 2nd partyDate: Fri, 9 Mar 2012 13:20:06 -0000To: 1st partySubject: RE: Phase-II Supply Contract: IBR Documents for Work Number R-183-2010/SRV-3 and R-183-2010/SRV-4

Dear Mr 1st partyOK since we have faith in you I will arrange the visit and to transfer the documents to India.Please consider some of the other things to ease the difficulties both sides have been experiencing.Kind Regards2nd party

From: 1st party Sent: 09 March 2012 11:46To: 2nd partySubject: Re: Phase-II Supply Contract: IBR Documents for Work Number R-183-2010/SRV-3 and R-183-2010/SRV-4Dear Mr 2nd party,

Since you have sought my assurance regarding payments, I assure the same will be done once your representative delivers the IBR documents and sort-out the pending issues. For this we have already extended our invitation and we will take care of hospitality during his stay in New Delhi/Gurgaon.We only await your confirmation regarding the date of his visit.Warm regards1st party

From: 2nd partyDate: Thu, 8 Mar 2012 04:19:51 -0000To: 1st partyCc: 1st partySubject: FW: Phase-II Supply Contract: IBR Documents for Work Number R-183-2010/SRV-3 and R-183-2010/SRV-4 Dear Mr 1st partyAttached are the meeting notes from 20th November 2011 referred to below and also is an explanation of the frustration on both sides.So far no progress has been made about Phase 3 that has affected Phase 2 even though phase 1 should not have been an issue.I only need your assurances to solve the IBR documentation issues and after that I assume you have funds released to pay us.I don’t know why the cash is held after we issued the bond. That allows us to pay suppliers enough to keep their support and the same when you release steel. As you have said you will replace the lost project or pay us and we believe you.So if IBR documents help then why put conditions against it so you don’t pay unless we do other things. It’s all about trust and co-operation.Kind Regards2nd party

From: 2nd party Sent: 07 March 2012 11:52To: 1st partyCc: 1st & 2nd partySubject: RE: Phase-II Supply Contract: IBR Documents for Work Number R-183-2010/SRV-3 and R-183-2010/SRV-4 Dear Mr 1st party,We are aware of the importance of the IBR documentation and this was issued to India where it was reviewed by the local IBR inspectors who had a different opinion about the format than those IBR surveyors in China. It was sent back for our modifications.a) We have completed the revised format for R-183-2010/SRV-3 but it has been held up because of delays to payments and now because of the 7 day notice of suspension that you have placed on the contract with 2 nd party in India . The order was negotiated, by your Mr X, as a single contract covering supply and installation and then separated into contracts for China and India as mutually agreed. We are still carrying on with work as much as we can but the payment of our invoice for 4.3million IR has been delayed for some considerable time, for no apparent reason, that has caused significant difficulties. We have been ready to send an engineer to site for pre-commissioning assessments of the installation to identify any corrective action. This visit arrangement is being affected by the 7 day notice threat just the same as the release of the IBR documentation.

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b) The revised documents for the manufacturing certificates for R-183 -2010/SRV-4 were in progress ready to be handed over to Mr Y in exchange for release of the 10% final stage payment for which we provided a bank bond and that payment was due to be transferred within 15 working days of receipt of our bond as agreed with Mr 1st party on 20th November 2011. The documentation can be issued as soon as the 7 day notice of termination for installation is resolved. We have carried on working at site but some trouble has occurred so our supplier has withdrawn until he is paid and some site engineers had to take a break to calm down the situation on site. That also means that the outstanding balance of 27.8m IR has to be cleared to allow this to happen. One important fact is that this contract was negotiated between your Chairman and our executive board members in parallel with the third contract that has subsequently been suspended. This has caused great problems on the second and third contracts as advised to your Chairman on 20th November 2011. The LOC has now reached the end of its validity and would need to be suspended and in order for us to release goods we have to settle with suppliers who suspended work after being directly informed by your representative that Phase 3 was suspended. In addition the transit steelwork that we sent with the HRSG sections is still being held on site and site has been closed because of delays and also because our suppliers have not been paid because we have not been paid. Your Chairman agree to help resolve these payment issues caused by the suspension of Phase 3 and promised that we would be fully compensated. So whilst we understand your concerns the difficulties have been explained to yourself and your Chairman by our Executive Directors and our CEO has also been involved to find a mutually acceptable solution.I hope this explains the situation and we do very much regret the inconvenience being caused that we continue to co-operate as much as possible. With Best Regards2nd party

To, Dated: 06-03-20122nd party…………. Kind Attention: Mr. 2nd party, DirectorProject: 225 MW Gas based Power Project India - Phase-IIRef # : Supply Contract: /EPC/COMM/HRSG/001/2010 Dated: 28.12.2010Sub: Furnish IBR Documents for Work Number R-183-2010/SRV-3 and R-183-2010/SRV-4Dear Mr. 2nd party,With reference to above subject, as part of our supply contract, please be informed that IBR documentation is a statutory requirement and till date the above requirement has not been fulfilled and the details are hereunder;1. 2 (Two) Nos. boilers are manufactured by 1st party’s supplier China under Work/ Boiler Maker Number as follows; a) R-183-2010/SRV-3 b) R-183-2010/SRV-4 2. Inspection and certification of the Boiler pressure parts has been carried out by M/s Third party in the capacity of inspecting authority duly approved by Central Boiler Board, Government of India, as per the requirements of the Indian Boiler Regulations - 1950 (IBR). 3. Be informed as per the contract conditions and IBR regulations the Boiler manufacturer is responsible to follow IBR compliance and you are hereby informed to furnish us Boiler Folder containing IBR Form 4A, Form 4, Form 3 and Form 2 as part of the statutory compliance according to IBR-1950. 4. Our principle employer is required to submit Boiler folder with above forms to the office of Chief Inspector of Boilers and Factories, ……………. or on before 15th March 2011. We will be able to register the boilers once the documents are submitted and approved by the above said office.You are hereby requested to send us the copy of the above referred documents immediately for the above mentioned projects for which you are contractually bound, and intimate us the time required in furnishing these documents within 2 days on receipt of this letter.If you have any queries or any further related communication, you are requested to contact Mr. 1st party and contact details are as follows:Mobile Number is +91 ………….., email id: a……………….. Yours faithfully,/1st party

References to few following mails: Comments to following mail from 2nd party to 1st party Good messages for further consideration to reinstate projects but, no results. Document not provided.

Date: Mon, 5 Mar 2012 13:01:12 +0000/To: 2nd party/ReplyTo: 1st party Subject: Re: Obstruction of Site main gateDear Mr 2nd party,Sorry for the lack of verbosity in my messages. But I feel you will appreciate the initiation I have been focusing on recourse actions and orienting my messages focused towards our confidence building measures that is the need of this hour in resolving our pending issues.The opening statement of one of your last message talked about your plan to send IBR document to your India office, hand them over to 1 st party so that he can process release to your legitimate payments. I again reiterate my invitation to you or any of your senior colleague including Mr. X to come at our office, sequentially discuss and resolve the issues.Hope this will see an end to our exchange of messages and the start of concrete action immediately henceforth.Regards/1st party

From: "2nd party /Date: Mon, 5 Mar 2012 05:42:20 -0000/To: 1st partyCc: 1st partySubject: RE: Obstruction of Site main gateDear Mr 1st party,Unfortunately the suspension of a major contract like Phase 3 has a massive impact because we spent our money and all our suppliers spent their money. Who pays us and what do we say to the bank who supports our cash flow ?So of course this comes in the way of performance because it affects phase 2 and suppliers don’t release the goods unless we pay for phase 3. We have your HRSG modules in our factory.All this was explained very clearly when you visited Shanghai that was around last November as I recall.

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So it is necessary that you consider the impact of the decision to give notice of termination and the decision by your bank or your finance department not to release the cash in exchange for the bond.If you don’t wish to retract the 7 day notices of termination then I will send our contractual response. I have no choice.Mr Kumar knows the status of everything including the IBR documentation and he knows where it is. It is held by us in China and could be issued to our India office or by mine or Jack Xies instruction directly to Mr Kumar at any time. He still enjoys free access to our facilities.I can’t get a comfortable feeling based on your short responses of instruction that is what I’d hoped to receive. Maybe I misunderstand you.Kind Regards/2nd party

From: 1st party/Sent: 05 March 2012 03:16/To: 2nd party/Cc: 1st partySubject: Re: Obstruction of Site main gate Dear Mr 2nd party,The suspension of India contracts should not come in your way of performance. Despite termination, you are still obligated to submit the documents as per the provisions in the supply as well as service contracts. What we need is also the same documents. Once these documents are submitted, rest will fall in line. As desired, we are ready to meet any day from now onwards and set way forward.I was told IBR folder for phase 1 is already available in India.Regards/1st party

References to few following mails: Comments to following mail from 2nd party to 1st party 1. No concrete actions resulted from various statements for doing requirements.2. State to fulfill statutory requirements & materials, still locate at square one, without any further movement.3. 2nd party does not express by actions, any seriousness on performing contract.4. Reiteration of statements does not mean business.5. Basis to requesting withdrawal of 7 days notice is not understood without any demonstrated action by 2nd

party in that direction.

From: 2nd party /Date: Mon, 5 Mar 2012 03:07:43 -0000/To: 1st partySubject: RE: Obstruction of Site main gate Mr 1st party,I’m going to send the IBR documents to our India office so they can be handed to you and I already trusted him to honor his plan to release payments.In parallel I’m paying the sub-contractor who has been crying for help and as soon as you withdraw the 7 day notices we will be able for the phase 1 & phase 2 sites to re-open.However an urgent issue that needs resolving is that you have placed 7 day notices on our India Company so I have this big problem to deal with before we can do anything. I already arranged for the briefing of our lawyer so we can respond within 7 days as requested. I can stop this only if you will withdraw the actions I have no choice but to do this as Chairman of a Public Company. The other parallel action that I have to follow is to identify a firm plan for phase 3 with you directly since we have spent a lot of money with no receipt of LOC or any payment. Unfortunately we held a Board meeting about your 3 projects arising out of the suspension of phase 3 and the difficulties it has caused.So whilst you want positive action then please accept that so do I because we spend several million pounds on your behalf backed only by personal assurances so far. This keeps being ignored so our shareholders have lost confidence, particularly in the security of LOC’s in India because of the restraints imposed on you as project developers by India banks. So how to re-establish confidence all round?I need your assurance that you will now release the payment against the bank bond because without this action I have no choice but to notify the issuing bank that will create other problems for these projects.So the only solution is for you and me to meet and solve these bigger issues and manage our people to take on the project tasks.I hope that you will understand.Regards/2nd party

From: 2nd party /Date: Sun, 4 Mar 2012 13:42:03 -0000/To: 1st partySubject: RE: Obstruction of Site main gateDear Mr 1st party,I will let you know the date of transfer and hope that in this way we will satisfy your needs for Phase 2 documentation . Can you please check and confirm?Will you in parallel initiate the payment of the 10% and we will address other issues in the same co-operative way?I will pay the crane company and trust that you will then have confidence to pay invoices and retract the 7 day notices to get rid of reasons to argue at lower level.Also if you arrange to close the police complaint I will be able to re-start the phase 2 site and send someone to Phase 1 site as agreed with your manager I don’t want to cause further aggravation by sending our man for discussion so the fastest progress can be by agreed steps and both parties fulfilling promises to show co-operation at our level.Kind Regards/2nd party

From: 1at party Sent: 04 March 2012 12:54To: 2nd party Subject: Re: Obstruction of Site main gateDear Mr. 2nd partyThen as suggested, please arrange to send the boiler folder for phase 1 and documents of phase 2 and depute one of your senior colleague for resolving the issues on hand and across the table.Regards1st party

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From: 2nd party /Date: Sun, 4 Mar 2012 12:07:01 -0000To 1st party Subject: RE: Obstruction of Site main gate Mr. 1st party,I can categorically assure you that I am not building a case. Like you I want speedy resolvement of these problems. Otherwise I wouldn’t get personally involved at the operational level as I’ve had to do.Kind Regards/2nd party

From: 1st party /Sent: Sunday, March 04, 2012 11:53 AMTo: 2nd party; 1st party managerSubject: Re: Obstruction of Site main gateMr. 2nd party,It appears you are interested in building a case. I am not discussing your failures in my mails. As an organisation, we are only interested in a resolution to a problem, not digging for holes. As I wrote earlier, we have moved a lot now and resolution as suggested in my previous mail is the only way forward and it is in your hands. This in written without prejudice to our rights.Regards/1st part

References to few following mails: Comments to following mail from 2nd party to 1st party 1. These mails do again refer to intention of 2nd party time & again, not ready to provide documents.2. Issue of 7 days pre-contract termination notice is an authorized part on 1 st party to use when, motion on

contract is brought to standstill leading to jeopardize contract milestones to a state, from where onwards, no route is availability to achieve milestones are visible.

3. 1st party is not happy to resort to pre termination issue, but 2 nd party has caused that so to do. While, pre termination is no game on contract, in this case, 1st party means it on its business cause.

4. 2nd party should have taken care of such additional contractual actions by promptly honouring its contractual commitments immediately, after having been served on such notice.

5. Evidently, nothing as such, has been responded by 2nd party but, pool of ineffective mails & counter mails. 6. Best alternative with 2nd part was, to elect for concrete actions so that 1st party could change its mind by de

electing its option for termination after, 2nd party had resumed site prosecution positively for all further activities.

7. It has also, been so revealed by implications from various responses by 2nd party that, 2nd party is powerful in digesting such contractual issues easily by suggesting that 2nd party legal experts are looking into issues of terminations & shall respond soon.

8. To substitute rather this election by 2nd party, they should have requested to convene top management level discussions on round table to resolve all contractual issues immediately, should they ‘style & entitle’ itself be professional contractors.

From: 2nd partyDate: Sun, 4 Mar 2012 10:46:44 -0000To: 1st partySubject: RE: Obstruction of Site main gate Dear Mr. 1st party,As per the meetings we had with your managers the starting point came from us already and we hoped that this was clearly demonstrated.We issued the bond for phase 1 and we were assured that the cash would be paid to o account within a few days. The IBR documents were prepared for Phase 1 and phase 2 was in progress. It is easy to issue the phase 1 IBR documents and for phase 2 I need your further guidance as I wrote in my last e-mail. I said we would carry on with installation of phase 2 and send someone to the site for phase 1 for pre-commissioning checks.Your manager said he’d go to the Phase 2 site and release the steel that would have been helpful and if the phase 1 invoice had been cleared followed by the phase 2 invoice [both of which were approved] then we would have been operating smoothly. As it was I had to stop the shipping of bought outs for phase 2 because there was no sign of improved trust between the parties. Each time we seemed to be near agreement a new condition arose that caused doubt and probably misunderstanding. Now we’ve had the confrontation at the gate and various accusations and allegations. Then the threats that we aren’t fulfilling our contractual obligations and a 7 day notice. I agreed that we would keep a close communication with your manager but told him we needed to ensure that LOC’s could be extended. In our capacities as CEO’s we should be able to easily manage this situation and focus on how to solve Phase 3. We have trusted you completely and you put your trust in us. I asked your manager if there was a problem affecting release of payments and so far no answer. What I meant by this was did you need documents to release another tranche of funding since as I understand each project has independent project financing. I only need your handshake like I did with your manager but until that is possible I hope that because we have demonstrated our support you will ‘gamble’ on my own personal assurances. As your manager said the relationships between Indians and Chinese are excellent so how to expand it? I doubt that you have to consult with your managers to determine if we are honorable and trustworthy. You already know me well enough and you struck up an excellent relationship with our managers. Kind Regards2nd party

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From: 1st party Sent: Sunday, March 04, 2012 4:14 AMTo: 2nd party; 1st party’s managerSubject: Re: Obstruction of Site main gate Dear Mr 2nd party,

Like I said before, starting point for our further discussion will be submission of IBR folder for phase 1 and documents of items supplied for phase 2 in the format already with you. We will never go back on what has been promised. All pending issues can be discussed in our office once items mentioned in para 1 above are submitted.

Regards1st party

From: 2nd partyDate: Sun, 4 Mar 2012 03:54:42 -0000To: 1st partySubject: RE: Obstruction of Site main gate Dear Mr. 1st party,As I explained to your manager we can hand over the IBR documents for phase 1 but he then puts conditions against phase 2 and the job isn’t complete yet so that IBR documents can be finalized. Right now I can’t see an end date for that. You have more experience than me for what IBR will do and what you need. Mine is a guess.I just can’t see why we didn’t do the step by step plan that I spent time discussing with your managers. It started with release of steel transport frames and I told your manager that I trusted him and considered that he would be as good as his word.I can keep our manager away from your projects if the situation has reached a stage where he is considered to be obstructive and deal with our suppliers but everything seems to be referred back to you for approval and your manager has no authority for Phase 3.This is our year end and I am in China to deal with daily actions associated with finalization of audits and Board meetings and Chairman’s reports etc. The lack of progress on your projects and suspension of phase 3 already had a detrimental effect on our business that I can’t reverse so we have been punished or beaten with a stick for being too kind and helpful. Auditors and shareholders are black and white with no grey.So your positive intervention has been needed and the latest disappointment for shareholders is the failure to release the cash that was promised on provision of a bond on our side.I have lots of stupid text messages because of the shenanigans now going on.Only you and I can now solve these issues and show confidence but I need your positive input. Everything has centered around the re-assurances and promises you have made to our managers and I in Shanghai that we have honored whatever is reported to you.If you can recognize that then I think that we are halfway to a solution. We all have pressures to deal with and I can understand your difficulties so I hope that you understand ours. Kind Regards2nd party

From: 1st party Sent: Saturday, March 03, 2012 3:09 PMTo: 2nd party; 1st party’s managerSubject: Re: Obstruction of Site main gate Dear Mr. 2nd party, According to us the crux of the problem lies in the release of IBR documentation for Phase-I and Phase-II. We have told you several times earlier and do not wish to tell you again that release of IBR documentation from your side will be the starting point for discussion on way forward. This is the only solution which we can think of, at the moment else we will be constrained to follow the legal course as already indicated. As also indicated to you, we are open for a meeting in our premises if you so deem fit. Warm regards1st party References to mails: Comments to following mail from 2nd party to 1st party

1. 2nd party’s contention herein is an intentional one just to establish a dispute on no contractual logic. 2. It is true that consequent upon, suspension of some contract in force somewhere, there are relevant

provisions on suspension clauses with defined set limiting duration period of notice & further notice, serviceable to a finally set period.

3. Actions by either party can be resorted to in line with conformance to those provisions & not by self declaration, as happened herein, by considerations of all 3 contracts in force with certain party for evolving in to cascading effect. Such statement is hypothetical & not constituent to provisions included within contract as well as, other involved laws.

From: 2nd party /Date: Sat, 3 Mar 2012 02:09:10 -0000/To: 1st partySubject: RE: Obstruction of Site main gate Dear Mr. 1st party,Your reference to a LOC is indeed the underlying problem.You have not provided a LOC yet for phase 3 and we have expended large sums of money against your order.

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Normally if a project is delayed or suspended the customer pays the supplier. We have been very supportive of you because of your personal assurances. I don’t need to say anymore than that.So please don’t compartmentalize the problems. It is not just Phase 1.The problem cascades over to Phase 1 from Phase 2 & phase 3 and all the difficulties caused by your non fulfillment of your obligations and delay after delay is occurring. I have recommended many times how to keep the jobs moving and we still would believe in your promise to resolve phase 3.Because 1st party have stopped the payment of approved invoices for erection it has exacerbated the situation and now by sending a 7 day notice of cancellation of the contract that only adds more fuel to the fire.Even when we send a bank guarantee in line with your suggestion to release cash new conditions opportunity is taken to add a condition against a payment.We are looking to you to make easy decisions and let the difficult ones be solved together. I listed these easy decisions to your managers on several occasions. Simple actions that mean documentation and materials would have been issued and we’d have been commissioning phase 1 and waiting the arrival for bought outs on phase 2. We have trusted you. Why not trust us?Best Regards/2nd party.

Site Mishandling by contractor!!!!1. Following few mails indicate conduct of certain contractor/subcontractor personnel, who held site entry

entirely. Some of them misconducted as well, inviting even, criminal action. Reason has been referred to form a basis involving nonpayment issue.

2. How can certain operative or an official hold site remarking to such contractual issues? According to provisions on contract, contractor & all its personnel, including that of subcontractors are required to maintain discipline, peace & harmony on site irrespective of contractual issue of nonpayment do exist.

3. This offensive/presumed criminal action does not indicate expected competencies level of contractor administratively, how to handle its personnel. Whatever, could be an issue, it is on an exclusive basis which, contractor, who is responsible for such incidents that should have been avoided at any cost even, if contract is suspended or even terminated. Contractor cannot allow self or its all personnel to ride on law of land.

From: 2nd party Sent: 29 February 2012 06:43/To: 1st partySubject: RE: Obstruction of Site main gate Dear Mr 1st party, It is with great sadness that I read this account and particularly the allegations against our Site Manager who clearly has the difficulty of trying to control our sub-contractor. It is very clear that the problem has come from the non-payment of invoices that has caused extreme frustration to our sub-contractor who has decided to make his protest because our two Companies are not resolving issues. I would like you to intervene to sort this matter with the police as we would do if your Company was involved in dispute in UK or China.I await your response by return knowing that you frequently read e-mails and messages on your mobile phone.Kind Regards/2nd party

From: 2nd party’s manager Sent: 29 February 2012 01:05/To: 2nd partySubject: FW: Obstruction of Site main gateImportance: HighHi 2nd part’s owner……,This message came to me at 11.13 pm last night.The crane vendor was arguing with our site people for his payment. We were telling them that we shall make payment once we receive from customer. Then the crane vendor said that he will at least take the crane out so that he can rent it out somewhere else. We agreed. But 1 st party didn’t allow the crane to go out. Hence the crane vendor informed us and placed the crane in front of the gate. We could not do anything. 1 st party has logged a police complaint. We will resolve this and update you. With best regards,/2nd party’s manager

From: 1st partySent: 28 February 2012 23:13To: 2nd partyCc: 'ashok'1at & 2nd parties’ managersSubject: Obstruction of Site main gateImportance: HighDear Mr. 2nd party,Please be informed that your 125 MT crane MH06 AL3676 was about to hit the barrier of main gate at around 6.00PM today without any clearance or gate pass for moving out of the site. In addition, the unprofessional behaviour of your site representative and scuffling, threatening the security guards with un-parliamentary words is highly objectionable. We put this on record, this type of unprofessional way of working should be discouraged and it s is a clear breach of contract and professional ethics. In spite of all the above we are continuously calling your site representative to remove the crane from the main gate in order to avoid any obstruction to the movement of other vehicles , however all the requests were turned down by your site representative in an arrogant manner. We also would like to put on record that all the movement to our site has been blocked by your unethical and unprofessional actions and be informed as a result of your action we have incurred heavy losses due to your blocking and all the losses will be debited from your account with immediate effect. You are hereby instructed to remove the crane within 12 hours of receipt of this mail, failing to take any action in this regard will lead to further legal course of action.

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Thanks & Regards.1st party/DGM(Project Management Group)/1st party

References to mails: Comments to following mail from 2nd party to 1st party & vice versa: 1. Following few mails reiterate similar issues pertaining to delivery of statutory documents, revised invoice

& release of payments. It has been noticed that degree of rigidity expressed by 2 nd party is too high to be contained & considered under pursuit of contracts.

2. There should be no concrete basis not to deliver statutory documents. It is a statutory issue & cannot be avoided from making contractual delivery. Even, delay on its submission can be strongly questioned under statutory regulations. Employer & Contractor had already been warned by regulatory functionaries during site inspections relating to boiler erection, which was officially recorded in contravention to statutory regulation with receipt of official warning by employer & contractor.

3. Similarly, revised invoice submission has been made a redundant issue by contractor that indicates its incompetency level to comply with Employer’s instructions. 3rd phase issue is again poured in for no role of its consideration on this contract even though, 2nd party strictly adheres to its inference of clubbing all 3 phases, which is unbecoming act due to existence of individual phases contracts.

4. It has been clarified to 2nd party explicitly in black & white that all these phases shall be dealt accordingly on their individual existence & enforcement in lines with contract/s both in force or in suspensions whatsoever, it could be.

5. Failures on part on 2nd party on submission of invoice as well as, procurement of statutory documents confirm that 2nd party is not decisive on prosecuting contracts successfully. In this situation, 1 st party has been drawn in to a considerably critical a state of contracts when, project is virtually put in abeyance & by application of attractable provisions, described as suspended automatically. Failure on resumption of suspended in parts or whole on any projects, definitely leads to determined termination under risk & cost purview of contract form, on risk, cost & liability of 2nd party contractor in this case.

From: 2nd party /Sent: 28 February 2012 18:40/To: 1st party1st & 2nd party’s managersSubject: RE: Proposal for De-freezing the ongoing Deadlock Dear 1st party,It seems we have too many obstacles preventing progress and new ones arise each day. With due respect we seem to be going further backwards not forwards that was my purpose in becoming involved.

What has happened to the promised release of 10% payment for issue of a bank guarantee and all the other offers to try to overcome the fact that Phase 3 was suspended without any LOC or payment to ourselves? There seems to be a marked retraction on your part that we suspect is causing these difficulties and is directly related to delays that are occurring with gas supplies in India.

In English language the contract for phase 2 does not restrict release to ‘after commissioning.’ This is our property that we used to transport modules just like we used trucks and took them away from site. These are our steel frames that we own so why should there be any problem for us to remove them from site? You have the option of co-operating or resisting.

Please understand that we are submitting invoices for the payment for the work completed (phase 2) and the invoices are raised based on the agreed billing schedule between us. Nothing has changed. If you wish to help further I can recommend that you do what you did in earlier cases when we raise the invoice. Against the same invoice you made partial payments and adjusted later and this happened many times previously for our invoices to keep the project moving. So why now ask for revised invoice?

The IBR documents for phase 2 cannot be finished until we complete the erection of both HRSGs and so it is not acceptable to link erection progress payments as agreed to this procedural activity that is largely out of our control. Final release will depend upon the assessment of the designated IBR inspector in India.Best regards, 2nd party

From: 1st party /Sent: Tuesday, February 28, 2012 11:33 AMTo: 1st & 2nd partySubject: RE: Proposal for De-freezing the ongoing Deadlock Dear 2nd party,As you are kindly aware, release of steel scrap is contractually possible only after commissioning of the Boiler.As far as payment against outstanding service invoices is concerned, we will do so immediately on receipt of your revised invoice from 2 nd party (as requested earlier in my message dated 14-02-2012, Manager mail dated 20-02-2012 and communicated over phone by my colleague Mr. Manager to 2 nd party’s Project Manager Mr. Manager and Accounts Manager Mr. Manager dated 22nd January 2012) for phase-2 services invoice. In fact you have already received this payment had the revised invoice been sent to us along with the test reports and IBR Forms for the pressure parts received at site. We will open a fresh Indian LOC on receipt of your revised service invoice (for Phase-II service contract), as include IBR Documents as part of the documentation required to negotiate the LoC. Thus you will be glad to get your payments against your revised invoice and we would be getting our Phase-2 IBR documents. Once we are ok with the above proposal, i.e.,

1. You send revised invoice2. We will open Indian LoC with IBR documents incorporated as credit-confirming documents to negotiate LoC.3. You get your payment 4. We get Phase-II IBR documents.

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We can move further and resolve the remaining issues. You will appreciate that our pending issues are many and this could be a first positive step towards resolving one of such important issues.Best regards/1st party

References to mails: Comments to following mail from 2nd party to 1st party & vice versa: 1. Underlines statements clearly indicate that interest of project has been condoned for sake of payments

only. Illogic responses are given just for response sake. 2. 1st party already accepted regarding actions that could be realized to resolve certain issues but, 2 nd party

placed it ineffective. 1st party tried its best to resolve issues. 3. Why revised invoice is a question mark herein, when it can be submitted easily by 2nd party? IBR

documents for 2nd phase denied for no reason by 2nd party is out of contractual understanding.4. What relevance of IBR documents to scrap steel exists is not understood contractually? 5. Advisory BG issues for irrevocable one, is not right action on party of 2nd party. 6. Process of documents transfer was suspended!!!! 1st party stressed times & again that IBR documents are

statutory in effect but, it has been noticed that construction of statutory document implication under General Clauses Act is not well understood by 2nd party. 2nd party everywhere, intended to link this provision to release of payments only. Condoning any statutory operation is not acceptable in constitutional/legal framework of India.

7. It is not contractual in such instances that 2nd party, who should have been committed to prosecute project efficiently, had tried to delay progress on contractual project schedule by making irrelevant excuses.

8. While, doing contractual business in any country & that too on such a wide size scale, contractor should have arranged finances/funds on its meeting fundamental requirements while, depend on 1st party only in lines to included provisions within contract. Apart from such capability that 2nd party should own,1st party has tried its best attempts to convince 2nd party to help resolve its financial issues by adopting many methods being feasible, possible, agreeable to both contract parties but, rigidity on part of 2 nd party could not allow ‘dilution on its stand’, Such non allowance of dilution on 2nd party policy or approach on this contract did not help breakthrough on contract performance deadlock that could otherwise, successfully, be achieved to bring back project held performance to motion once again.Refer to following specific explanation.

Very Specific quotes to be integrated with point 8 above:1. 1st party had been recommended & suggested by 2nd party dated Feb 11, 2012 mail to accept 1st party open

‘bankers note’ to guarantee stage payments for site erection respecting 2nd phase service contract, which vide mail dated Feb 28, 2012, 1st party reciprocated, which consequently, was denied by 2nd party in its entirety.

2nd part statements commented on their requirements as follows:2. ‘Though our, 1st party proposal to open LOC towards pending payments and stage payments in Phase-II

service contract against deliverables is not adequate?’

3. “Can you, 1st party provide us with reassurance about your current trading situation and your ability to pay suppliers”, and in one of your earlier mail you wrote "If we release everything you need then how to have an assurance or guarantee of payment after the sequence of events that has occurred?"

From: 2nd party /Sent: 28 February 2012 11:16To: 1st & 2nd party’s managersSubject: RE: Proposal for De-freezing the ongoing Deadlock Dear 1st party,You can surely have the IBR documents when you release steel scrap and pay outstanding invoices to 2 nd party and release the payment of the outstanding 10% now that you have received the bond. We will then re-commence work at both sites. Please provide your date for doing these things and I will ensure documents are available in India. We suspended this transfer of documents when it was apparent that no payments were being released. If you then extend the letter of credit for phase 2 we will recommence our action to ship the goods and release the IBR documents for phase 2. These actions were cancelled last week after no positive instructions on your side. When will you make a proposal to cover all our costs to date on Phase 3 or provide an amended order and LOC? Kind Regards 2nd party CEO 2nd party

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From: 2nd party /Sent: 28 February 2012 08:21/To: 1st partyCc: 1st & 2nd party managersSubject: RE: Proposal for De-freezing the ongoing Deadlock Dear 1st party,Once again I respond to say that this proposal is not acceptable.We need you to clear the invoices owed to 2 nd party and transfer the 10% payment for Phase 1 as agreed upon receipt of our bank guarantee.It is not necessary to put such conditions against release of payments that just delay payments further. This has just delayed progress.I informed Mr 1st party of the delays last week.Kind Regards 2nd party

From: 1st party /Sent: 28 February 2012 04:54To: 2nd & 1st party managersSubject: RE: Proposal for De-freezing the ongoing Deadlock Sir, when can we receive the IBR documents, as that is a statutory requirement and equally hampering the progress of work at our end. Best regards 1st party

A specific mail from 1st party to 2nd simplifying for resolution but, did not work. Refer to underline contents.

Dear 2nd party,We have been trying to resolve this issue, hence so many frequent messages from our side have been exchanged, but it seems we are making no headway. We accept and will release partial payment according to actual material received at site, against Phase-II invoice as desired by you, but at least we expect the release of Phase-I and Phase-II IBR Documents and despatch of material available (piping and stack damper) with you, which was expected for despatch on 29 th February 2012 (as per 4th revised shipping schedule from your side) while negotiating as offered in our earlier message. At least if these documents are with us and piping is despatched, I assure you will get your 10% payout against BG immediately.Please try to understand our difficulties and cooperate.Best regards 1st party

References to mails: Following mails from 1st party clearly express about many formula to remove deadlock but, 2nd party did too little to achieve progressive resolution. Even, material dispatch stop order was affected by 2 nd party redundantly.From: 1st party Sent: 25 February 2012 04:24To: 2nd partyCc: 1st & 2nd party’s managersSubject: Proposal for De-freezing the ongoing Deadlock Dear Mr. 2nd party,With reference to our trailing mail proposal, we are yet to receive your concurrence in this regard. Once again it is requested to accept this formula for proceeding ahead. Looking forward your positive response.Best Regards 1st party

From: 1st party Sent: 22 February 2012 15:26To: 2nd partyCc: 1st partySubject: Re: Very Important: Do not despatch any material to either 1st party or 3rd phase till further instructions from 2nd party. Dear 2nd party,Thanks for sparing your valuable time and your personnel efforts to resolve the impasse and considering our mutual interest. With reference to your mail to Mr. 1st party today morning and the discussions before, We suggest to facilitate the pending issues in the following manner.1. We will release INR 4.3 Millions (as already committed) against handover of IBR boiler folder for Phase – 12. We will release service payment due for phase -2 against submission of revised invoice of INR 16.5 Millions against handover of IBR boiler folder of phase – 2. COULD YOU FURNISH BOILER FOLDERS PERTAINING TO PHASE – 1 & PHASE – 2, SO THAT WE CAN IMMEDIATELY (within 4 working hours) RELEASE PAYMENT FOR INR 4.3 + INR 16.5 MILLION (ie. INR 20.8 MILLIONS) WE CAN FURTHER ASSURE (AS ALREADY COMMUNICATED) MORE PROMPT RELEASE OF PAYMENT, IF YOUR REPRESENTATIVE COULD PAY US A VISIT WITH THE ABOVE REFERRED IBR DOCUMENTS AND OBTAIN PAYMENT SETTLEMENT FAVOURING 2 nd party. 3. We request to you to send your senior colleague from China to our office so that we can discuss and sort out the issues related to supplies and services contracts across the table.4. We will proceed to resolve the complicated pending issues gradually.We need to move forward in our long journey in a phased manner to resolve the complications which are obstructing our smooth passage as of now. Looking forward a positive reciprocation and acceptance of the above.Best Regards 1st party

From: 2nd partyDate: Wed, 22 Feb 2012 05:27:24 -0000To: 1st partySubject: FW: Very Important: Do not despatch any material to either 1 st party or 3rd phase till further instructions from 2nd party.Dear 1st party,As I have informed you in copy e-mails whilst we have the current deadlock nothing is happening. I have helped as much as I can. Kind Regards 2nd party

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2nd party 2012 年 2 月 21 日 12:05/Managers: RE: Very Important: Do not despatch any material to either 1 st party or 3rd phase till further instructions from 2nd party. Manager, We don’t have money now. Please don’t despatch this without our information. Because we cannot clear this consignment and deliver to site. With best regards, 2nd party

References to mails: Following mail gives another evidence regarding work stoppage/suspension that should not happen by 2nd party.

From: 2nd party /Sent: 16 February 2012 11:23/To: 1st partyCc: 2nd party managers Subject: RE: Outstanding paymentDear Sir,We would like to inform you that our vendors have stopped work today at project site till they get paid for the work completed by them. Kindly release balance payment to enable us to pay them and get them back on site work.Regards. 2nd party

References to mails: In relevance to meeting conducted in China on 11.2.20121. MOM dated 11.2.2012 was mailed by 2nd party from China, records of which were rejected by 1 st party.

But, received clarified true record by another mail stating that ‘we agreed for dispatch of balance material and the IBR folders till date there is no concrete evidence, what action has taken to ensure from your end?, is this your way of commitment?’ ‘We would like to put on record once again the violations and deviations committed by your team here in statutory compliance’. ‘We advise to send your Top Management team from China who can take decisions across the table to our head office’.

2. Conclusion from following included meeting based mails, result in that 2nd party is not interested in resolving statutory documents issues without being cleared by 3rd phase payments, which has got no relevance to 2nd phase contract & also, for mere information only, 1 st phase contract. 1st party has tried to help 2nd party by so many propositions but, 2nd party does not have any key to open deadlock for contractual breakthrough.

3. 2nd party is unable to handle its vendors in both countries, India & China. By weighing out inferences from various mails, in this regard, it can be established that capacity of 2nd party does not appear to match prosecution & build ability on this contract as well as, similar other contracts. It also, can be assessed that 1st party also, failed in its initial evaluation respecting prequalification measurements while, considering bid. 1st party also, should learn a good lesson from its failure on understanding capacity of bidder.

From: 2nd party Sent: 18 February 2012 10:42To: 1st partyCc: 1st party & 2nd party managers Subject: RE: Meeting Discussions in ShanghaiDear 1st party,We had discussions with your manager yesterday to be more explicit about the current problems that are causing frustration.There are 2 issues and we need your firm action and then we can continue our support1. We are not able to arrange release of the bought outs for phase 2 without paying suppliers who have been very patient.2. We can start up site again in India but we are not able to get support of sub-contractors until we pay them. So any conditions that are imposed upon us affect the speed at which we can resolve these 2 basic problems.Despite efforts 1st party were unable to arrange a $2m payment to allow goods to be released and shipped to India so we are now reliant on the cash transfer related to the release of the 10% bond for phase 1. This is finally in progress some 2 months later than anticipated. When the money arrives to our account we will need at least 2 weeks to arrange payments to suppliers and arrange for shipment so realistically good can leave China sometime after 3 weeks from now at the earliest. That requires further extension to the LOC. Your manager knows the situation with readiness for delivery.To pay suppliers in India we require at least 90% of the outstanding invoices on phase 1 &2 to be cleared and paid. They may accept less to re-start work backed by your guarantee but at the moment this is not an option.The IBR documents for phase 1 are on the way to India and may have arrived. No point to set pre-conditions that payments can only be made if we hand over documents and no point to say payments can only be made when goods are at the port in China or this just builds in delay.My advise has been to release steel structures and then pay the outstanding invoices and of course it is possible to set up exchange of documents for issue of payments but isn’t this rather meaningless? The point is to move money and free the logjam that is slowing down the jobs.Let me know what you can do in consideration of the above because the faster these issues are cleared the faster the progress. It’s not about threats and arguments and lack of commitment. It’s a fact that until phase 3 is resolved we are not able to extend our credit because of our own operating restraints with banks that you also have experienced. We all have to follow regulations.Kind Regards2nd party

From: 1st party /Sent: Thursday, February 16, 2012 4:22 PM/To: 2nd partyCc: 1st & 2nd party managersSubject: RE: Meeting Discussions in ShanghaiDear Mr. 2nd party,

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Thanks for your mail, while it is true that your notes were not a fair reflection of our meeting in shanghai on 10 th Feb 2102 and I don’t want to deliberate on the same as a lot of water has flown now, 1. But I want to respond to your comment “I won’t advise status with other actions because it now seems that despite my personal input everything has been stopped and my concern is that this is due to further delays with gas supply contracts and/or financial constraints and difficulties with your bank. Neither of these scenarios should have prevented the release of steelwork that would have provided enough local revenue to deal with urgent demands from our suppliers.“ We want to take very strong objection to this kind of writings with a view to hurt our motivation in a designed fashion. Even your Mr. manager is using the same language and intention. We can only think one reason for this kind of writings; out of sheer frustration of non performance by your company, these things are being written. We advise you to desist from writing such mails2. We agreed for dispatch of balance material and the IBR folders till date there is no concrete evidence, what action has taken to ensure from your end?, is this your way of commitment? (if needed refer manager’s yesterday mail)3. We would like to put on record once again the violations and deviations committed by your team here in statutory compliance and other pending issues in Phase-I should be addressed immediately before proceeding ahead.In this crucial juncture we advise to send your Top Management team from China who can take decisions across the table to our head office so they can able to understand the struggle we are facing along with the ground reality in front of their eyes. In conclusion we have not violated any of the provisions of the contract so far. It is 2nd party, who have violated the provisions of the contract and are now seeking concessions. Best Regards/1st party

From: 2nd party /Sent: 16 February 2012 14:18/To: 1st partyCc: 2nd party managersSubject: RE: Meeting Discussions in ShanghaiDear 1st party,I’ve had communications from our India Office reporting that my notes are not considered a fair reflection of our meeting. For the benefit of those not in attendance the e-mail I distributed was produced using the data recorded by 1st party in the meeting that he copied to me.As you will recall in our discussions I asked that 1 st party make a positive gesture to recognise the effort we have made to keep all three projects running despite having spent large sums of money on Phase 3 project without any payment. The first small gesture was to release our scrap steelwork from site [phase 2] even though you retained it and sold it on the phase 1 project. A gesture is not really required because in the contract the material is ours and it does not say that you have the right to hold it until the completion. You advised that you would go to site and personally deal with any issues preventing release. That should have happened last Monday. I said that we would continue with completion of the IBR documentation and that manager could monitor progress. On completion of securing requisite signatures this will be despatched to our India office as agreed. We provided the bank bond for phase 1 and still await payment.I won’t advise status with other actions because it now seems that despite my personal input everything has been stopped and my concern is that this is due to further delays with gas supply contracts and/or financial constraints and difficulties with your bank. Neither of these scenarios should have prevented the release of steelwork that would have provided enough local revenue to deal with urgent demands from our suppliers.So this has resulted in the suspension of installation work on phase 2 that was a situation that we tried to avoid in our meetings last week.I assume that you are dealing with these issues at contract level so I await some positive input on your part.I don’t know what has happened regarding the anticipated meeting on Phase 3 so if that was cancelled and the project is back on hold then please let us know.Our management team await your input and clarification. I’ve no intention to be dragged into these projects that only need calm and professional co-operation between the parties./Kind Regards 2nd party

From: 2nd party /Sent: 11 February 2012 08:18/To: 1st partyCc: 2nd party’s managersSubject: Meeting Discussions in Shanghai Dear 1st party,This is the summary of actions as discussed and agreed that should lead to progress that you require. 1. Phase 1 Service ContractHaving satisfied yourselves with the progress of the IBR documentation it was agreed that you would immediately release the outstanding payment of 4.3m INR. 2nd party will finish the documents by 13th February and have them stamped and sent by Courier service to 2nd party’s India office who can hand over the documents. Latest date for payment and handover of documents is 17 th February .The 10% payment due in exchange for bankers guarantee will be paid as soon as the clearing bank in India acknowledge final acceptance of the bond. Latest date to complete this action is 17 th February .2 nd party will arrange for a Commisioning Engineer to visit site to carry out pre-commissioning checks and discuss actions to clear minor snags and access restrictions. 2nd party’s India site manager to attend. 2. Phase 2 Service contract1st party will make the outstanding payment of 27.8m INR to allow 2nd party’s India sub-contractors to continue with work and 2nd party’s India will assist to sort out the Bill of Entry documentation involving 1st party as required.2 nd party will proceed to prepare the IBR folders for stamping that will follow phase 1 documentation and 2 nd party expect to complete in 7 days .1st party manager will visit site on Monday 12th February and ensure that scrap materials are released to 2nd party’s office in India. 3. Phase 2 Supply ContractLC in place for Phase 2 and has been extended to 24th February. This will be extended by another 15 days to enable feed pumps to be completed and dispatched. 2nd party will make arrangements for packing and dispatch of all bought out items within these overall timescales. If 2 shipments are required 2 nd

party will advise if any significant extra costs will be incurred which will need to be resolved amicably.1st party will release the 10% balance of payment against issue of the bank bond in the same format as Phase 1. Payment due after dispatch of bought outs and in exchange for IBR documents.

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Post meeting conversation1st party are willing to provide a bankers note [MT?] to guarantee the stage payments for site erection of Phase 2 service contract. 1st party also confirmed that meetings have been held to release Phase 3 and meetings with key suppliers will take place in around 1 weeks time. At this meeting 2nd party and 1st party will reach agreement related to necessary changes to the commercial contract to resolve cost and time extensions for delays and separating Phase 2 & 3 contracts. Then an LOC will be issued and 1st party will ensure that this involves an immediate down payment of $2m as previously agreed with 2nd party’s managers. Kind Regards/2nd party/CEO/

Section ECorresponding Recent Mails-Hereunder, are included certain mails extracts corresponded between period March 22nd & 30th, which in their entirety are irrelevant to prosecution of this 2nd phase contract exclusively, but partly to included & explained extents. Your (2nd party) contract operating policy, it seems is, to just write for sake of writing to achieve your demanded monies based payment target despite, 1st party has realized/honoured all contractually scheduled payment commitments. Actions on 2nd party’s end do not match national & international projects working standards on such Lump Sum Fixed Price Contracts. Objective of this deliberation is to present causes of delays on actions that were purported to be resorted to by 2nd party in particular.

Following para applies in general to various mails:Another fact that applies to Phase- I & II HRSG Contract awarded costs, which are relevant for 2nd party, who has been everywhere on writing, stressing for allowed discount to 1st party for further phases.

1) HRSG Phase I Supply Contract Value : $ 7.4 Million2) HRSG Phase II Supply Contract Value : $ 7.75 Million3) % Increment : ~ 5%4) Duration period between two Contract Execution : 7 months

1. 1st party allowed enhancement to 2nd party well determined & considered price escalation between 2

contracts that 2nd party has either condoned to understand or knowingly, impressed on all mails, just to make out benefit of psychologically effected common understanding by certain person to construe adverse financial impacts on 2nd party.

2. Construction out of awarded fixed price lump sum on both contracts is based on commercial, engineering & contractual justifications, equity, & is truly, in compliance & conformance to fundamental principles of contracts forms. No integration has been considered by 2nd party to include discounted effects drawn out from 1st & 2nd phases of contracts to be amalgamated to 3rd phase that could constitute financial network implications, otherwise, had that arrangement been recorded & so agreed, by both parties, which situation could empower 2nd party to confer in network contract.

3. On top of foregoing price enhancement allowed consideration between 1st & 2nd phases contracts, 2nd party was by grace of 1st party, also, allowed to receive back valuable scrap and packaging materials estimated to worth INR 1 Crore (approximately) practically, which consideration confirms that contractual significant raise/variations/extras/ concessions, respecting additional hike in price, has already been included/contracted, while considering effect on 3rd phase contract.

1. You 2nd party might have placed in your mind, while considering pricing 1st & 2nd phases to allow discount to be financially covered on 3rd phase pricing. What 2nd phase contract has to do with your consideration? That is 2nd party’s business policy for which 1st party cannot help?

2. As a prudent contractor, 2nd party should have arranged financial supports from its bankers, if additional funding sums/amounts than contractually received from 1st party, were required to meet contractual obligations on 1st & 2nd phases.

3. Any contract in this world, at any stage of contract duration can be either suspended or rescinded or cancelled, even after, being awarded by either party involved. You may refer to international contracts provisions applied all over globe in format of FIDIC or some other recognized format or, also, in ambit of Indian Contract Act.

4. Of course, this suspension of work or part of works results in serious disputes commercially but, this does not transfer any special rights on relevant party aggrieved by such suspensions or else, savings of raising post suspension or post termination future contractual claims, respecting both liquidated damages or others, described or implied financial loses.

5. This state developed on contract does not allow relevant party to absolve itself of any obligations & responsibilities on contract provisions. As 2nd party on 1st & 2nd phases, you contractually & statutorily, had

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you rights to raise claims if aggrieved, but not at cost of intentionally/deliberately delaying project activities & desperately demanding every day, release of payments.

6. And, even, if 1st party had caused default on payments to 2nd party, 2nd party enjoyed rights to get delayed payments benefits but, no delays to be caused on running progress of contracts are permitted.

7. 2nd party should understand its responsibilities on contract performance that to pay to its subcontractors or vendors, it has to arrange payment for their dues & should not solely, bank upon payments to be made by 1st party. 1st party is not held responsible in case of default by 2nd party on such issues as far as, 1st party makes payment to 2nd party satisfactory in line to contract provisions.

8. In this case, 1st party honoured its contractual commitments to a maximum extent possible without causing any specific default. Should your 2nd party, subcontractors stop works, it is considered stopped by 2nd party. 2nd party cannot escape its obligation by responding that ‘we did not stop, but our subcontractors’. Such response is not expected from 2nd party that refers to its contractual incompetency to handle vendors.

9. Is it contractually, right step to give go ahead for manufacturing vessels or equipment, without their being approved statutorily?

10. 1st & 2nd phases do not have gas contracts yet, does not correctly respond for erection or progress delay justification or non delivery of documents, for non compliance of provisions on 2nd party’s part. Project progress delay is caused for this inaction is absolutely unjustified argument. Gas Grid connectivity at Project site is achieved on 23rd Jan 2012, though we are at the moment in discussion/negotiation with GOI for long term Gas allocation at competitive pricing.

11. Allegation upon us by 2nd party, regarding our bad financial status statement based on incompetent feedback information from non contractual source is inadmissible action, is highly deplorable & is contractually objectionable.

12. Had you 2nd party suspected such doubts about 1st party, 2nd party would have queried at bid stage only regarding, whether or not, project finances were available. Certainly 2nd party would not have agreed for these contracts, had it had been responded on queries about non availabilities of funds for these projects.

13. 2nd party suspicion equivalences to another high degree offending allegation on 1st party that 1st party might be trading illegally is horrific in contractual world.1st party cannot expect such lowest degree conduct from 2nd party. 2nd party should have acted professionally by including professionally, commercially acceptable & tenable statements on contractual & non contractual business communications.

14. 2nd party’s such existing finance competency secret inquiry in Indian market has caused severe damages to reputation & goodwill of 1st party.

Particular Comments Corresponding Recent Mails March 30 & 29, 20121. 1st party reiterated many times to 2nd party to depute certain competent official for roundtable

discussion for immediate resolutions regarding finance impact.2nd party has re-stressed payment involved with 3rd phase contract that has not yet been kicked off.

2. 2nd party has not honoured its commitments to provide contractual & statutory documents that cause has applied on hold brakes to motion on 1st & 2nd phases as well, which adversely impacted on 1st

party. 2nd party contends that 3rd phase payment has been its fundamental concern while, it continues to condone lost progress impacts on both progressive 1st & 2nd phases that would, certainly be feeding source to make up finances for future.

3. Time being lost continuously, which would certainly adversely affect 1st party & relevant interests of involved stake holders including 2nd party& others, whosoever.

4. 2nd party has claimed to have spent Millions of dollars on non running project while, project demanding statutory documents & revised invoices, have been made problematic issues not to be rationalized conclusively, but could be delivered by 2nd party’s effects too easily.

5. Yes, of course, trust values considerably on major development projects but, it should be realistically based on logical measurements. When professional trust is converted to mistrust by mindless consideration, consequences are always disastrous. In fact, both parties on contract should act in full cooperation for mutual benefit & not that 1st party strive for work progress while, 2nd exclusively keep on stressing about one condition of 3rd phase payment. No measure shall affect on this lead approach.

6. Running projects are being abandoned for sake of one that has been contracted but, yet to take off for it has been suspended & 1st party has been awaiting resumption of suspended contract. Every suspension on contracts involves claims & counter claims by both parties stakeholders/involved & also, all further lower tier vendor parties as well.

7. Yes, it is reasonable contractually as well as, in business terms wisely that disputed projects cannot be left to be resolved automatically. Efforts are to be applied by employer as well as, by contractor to

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continually, explore all possibilities to reach certain balanced feasible & acceptable solutions to keep milestones & contract performances within tolerable minimum loosening marks of time & cost, which are most significant areas to be considered for either success or failure of any project.

8. That reason suggests/dictates that employer must have resolved to keep prosecution of project, when responsible contractor by whatsoever reason, has abandoned works without any concrete cause, but just for issue relating to disputes on payment, an issue, which also, could be resolved by certain derived agreed formula after it has been deliberated.

9. Pre Termination Notice was issued just to advise contractor about contractual facts that could be applied on as Contractual action. Solution that 2nd party resorted to abandon all projects & activities to hang on contract prosecution on 1st & 2nd phase & contractual disputes on 3rd phase to an equation established by summing 1st & 2nd phases equal to 3rd phase performance, is not justified.

10. Existing payment disputes can only be resolved by continuous negotiations & brain storming sessions to be conducted between both contracting parties which part, has not been applied yet.

11. Both parties should contemplate to explore further reinstatement & reconciling activities deemed to be virtual chapters to resolve all disputes amicably in interest of everyone & finally, to achieve objective of project deliveries.

12. But, factually, foregoing contract suggestive routes that could be affected have not happened & projects have been left unattended by 2nd parties for more than 4 to 6 weeks that has formulated cause of this action on part of 1st party.

From: 2nd party /Sent: 30 March 2012 06:10/To: 1st partyCc: 2nd party managerSubject: RE: 1st partyGroup Credit Report - Phase 1,2 and 3 Projects Dear Mr 1st party,You have chosen to ignore once again your obligation to solve the fundamental problem. We do keep referring to the personal assurances and guarantees that you gave on 20 th November 2011 . You asked us to trust you and we did. We never stopped and we did meet your people. One of our key men was even arrested and humiliated. Nothing has been proposed to solve the problem of Phase 3 that is the root cause. This is not a small amount of expenditure on our part. It is MILLIONS of US $. All on your behalf. You want us to continue supporting you but you couldn’t find a solution and you didn’t pay us for work done on the sites even though you approved invoices.So I am saying the same thing time after time because you choose to ignore Phase 3 as if it never happened.You will receive our lawyer response to the actions taken by your personnel on the erection contracts for phase 1 & 2. Two separate lawyers have reached the same conclusion.In response to your comments you are willing to spend money but you won’t pay us. Why? I agreed actions with your manager to solve your difficulties but he was either overruled or you didn’t have free cash to settle debts. We have to conclude the latter case.Honesty and integrity count a lot in business relationships and you have continually asked us to trust you. So why not trust us and address the problem. We only need positive commitments that can be kept. So far we just get promises or conditional offers that in effect mean payments in the future. Who pays suppliers in the meantime?You didn’t release the 10% stage payment after receiving our bond. How do you expect our bank to support us on your contracts if you can’t or won’t do the things that you said you would do? We are not being heavily contractual we are trying to maintain our support. We are not your bank.So as I’ve said several times only you can solve these problems because of your position and your business reputation in India.Best Regards/2nd party/CEO/

From: 1st party /Sent: Thursday, March 29, 2012 7:03 PM/To: 2nd party; 1st party managerSubject: Re: 1st party Group Credit Report - Phase 1,2 and 3 Projects Dear Mr 2nd party,We have been asking you or your representatives to come for a discussion since December and we only receive long messages with the same content and repetitive. Please be informed, these mails without any action points will only add to confusion and waste time. Needless to say, we are moving forward on the project at your cost and risk. Regards1st party

From: 2nd party /Date: Thu, 29 Mar 2012 08:54:43 +0100/To: 1st partyCc: 1st & 2nd party managersSubject: RE: 1st party’s Group Credit Report - Phase 1,2 and 3 ProjectsDear 1st party,I am writing to respectfully remind 1st party of their obligations as customer and developer of these projects. In the meeting with Mr 1st party on 20th November 2011 he asked for time to resolve the suspended project for Phase 3 that you were awarded as EPC and which was negotiated as a package with the phase 2 project, where you are developer. He asked for our support and understanding and gave his personal assurances that all would be resolved in time.The deadline set by Mr 1 st party of end of March is this week and thus far there has been no solution proposed by yourselves nor anything agreed.I respectfully remind you, that in our opinion, you have failed to meet any commitment or promises either discussed, or proposed in writing, since our meeting with Mr 1st party on 20th November 2011. At that time it was made very clear by Mr 1st party that 1st party Group had suffered

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significantly and spent $30m on the phase 3 project. As a consequence Mr 1st party told us that he was in a very difficult and embarrassing position and sought our support. So perhaps this expenditure and the suspension of the Phase 3 project is the real reason why all payments stopped on the separate erection contracts on Phase 1 and Phase 2.We feel that you have taken advantage of our discounted prices and our funding of all three projects without adequately fulfilling promises and contractual obligations. Unfortunately it is our opinion that 1st party have not acted in the same spirit in which all the contracts were negotiated and by not resolving the payment and identifying an acceptable solution for the suspended Phase 3 contract this has been the prime cause of the difficulties you encountered on the Phase 2 and Phase 1 projects. This is well documented.Furthermore you have unfairly criticised, often chastised our personnel and frustrated any attempts by us to keep projects moving by our subsidiary Company in India.I travelled to China yesterday and still await any positive actions on your side that might unlock this situation that in my experience was totally manageable on your side. Everything seems to depend on your having adequate funds available to fulfil your obligations and hopefully by now you have been paid for your work on Phase 3.We urge you to reconsider your negative actions and review your obligations as well as promises and personal assurances on the Phase 3 contract. Until this is addressed along with all the subsequent negative actions you’ve taken on Phase 1 & Phase 2 I’m not sure what progress can be made. I have repeatedly suggested a meeting with Mr 1 st party to follow up on his promises of the 20 th November 2011 and l still agree to meet Mr 1st

party at any mutually convenient time.Once again I await your response.Kind Regards/1st party/CEO/

From: 2nd party /Sent: 27 March 2012 22:26/To: 2nd party; 1st party’s managerCc: 1st & 2nd party’s managers Subject: RE: 1st party Group Credit Report - Phase 1,2 and 3 Projects Dear 1st party,Once again I am writing to respectfully remind you of your obligations as customer and developer of these projects. I have seen your latest e-mail to 2nd party’s manager.After the personal assurances and promises of Mr 1st party on 20th November 2011 he asked for time to resolve the suspended project for Phase 3 that you were awarded as EPC and which was negotiated as a package with the phase 2 project where you are developer.The deadline set by Mr 1 st party of end of March is this week and thus far there has been no solution proposed or agreed.I respectfully remind you that you have failed to meet any commitment or matters discussed or proposed in writing since our meeting with Mr 1st

party on 20th November 2011. At that time it was made very clear that 1st party Group had spent $30m on the phase 3 project and Mr 1 st party said that as a consequence he was in a very difficult and embarrassing position.I do feel that you have had the advantage of discounted prices and funding of the projects and by not resolving the Phase 3 contract and releasing payments this has caused problems that have created difficulties on the Phase 2 and Phase 1 projects. Furthermore you have unfairly criticised, chastised and frustrated our subsidiary Company in India who have tried to assist you throughout.I will travel to China tomorrow and still await any positive actions on your side that might unlock this situation that in my experience was totally manageable on your side provided that you have the funds available and have been paid for your work on Phase 3.You may of course disagree or continue to ignore your obligations, promises and assurances on the Phase 3 contract but until this is addressed along with all the subsequent negative actions you’ve taken on Phase 1 & Phase 2 in an attempt to pressurise us, I’m not sure what progress can be made. I keep suggesting a meeting with open discussion and a recognition of our efforts in your support and I will still meet Mr Rao at any mutually convenient time. Once again I await your response.Kind Regards/2nd party /CEO

From: 2nd party /Sent: 24 March 2012 11:42/To: 1st party/Cc 2nd party managersSubject: RE: 1st party Group Credit Report Dear 1st party,One further point that is important. We never actually stopped work on sites because of non payment. Only our mechanical contractor stopped work. All others like insulation and E&I kept working.Regards/2nd party

From: 2nd party /Sent: 24 March 2012 08:46/To: 1st party/Cc: 2nd party managersSubject: RE: 1st party’s Group Credit Report Dear 1st party,We are not making any false allegations. Mr 1st party gave personal undertakings and travelled to Shanghai on 20 th November 2011 to make a plea for us to carry on delivering equipment after we had been notified of the suspension and effective cancellation of the phase 3 project for which 1 st party had not provided a confirmed letter of credit . He was apologetic and embarrassed that his client, who described as a personal friend, had let him down and told us that 1st party had spent over $30m on this project. These are facts that Mr 1st party can confirm to you. Furthermore he accepted that our suppliers were withholding equipment on phase 2 because we were well advanced on phase 3 and they wished to be paid in full. This is a fact that Mr 2nd party explained very clearly to Mr 1st party. We had almost completed the manufacture of Phase 3 HRSG’s that Mr manager can confirm because, as agreed with Mr 1st party, they were manufactured in parallel with Phase 2 HRSG’s to achieve the target price that Mr 1st party set during prior meetings when the contracts were formed. Mr 1st party tried to find a payment plan to keep the projects moving and one item was to release a 10% stage payment on phase 1 against the provision of a bank guarantee that we have provided. He also said if we released bought out items on phase 2 this would release cash against the LOC to further fund the projects but as I’m sure you can calculate this action releases funds to pass through to suppliers on phase 3 for your sole benefit. He therefore offered a loan of $500k and we agreed that a minimum loan of $2m was required to keep the confidence of our banks who support us with funding for major projects. This is a fact that Mr 1st party can also confirm.

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Mr 1st party explained the difficulties that he had and that loans were not possible or cash advances and that he had to comply with the terms of the project financing agreements and India bank rules. He subsequently tried to set up a $2m loan but this loan was capped by an end date that left no solution to resolving phase 3 contract where your company was supposedly out of pocket by $30m already. We continued work on the sites of phase 1 and phase 2 in good faith whilst we allowed Mr 1st party time to solve the difficulties caused by suspension of phase 3. He promised that this project would either be released to proceed or he would replace it with another contract before March 2012. Since 20 November you have not paid any money to 2 nd party through China or India even though 2 nd party in India had submitted payment claims that had been approved. Furthermore you haven’t solved anything or released the payment of 10% of phase 1 after we submitted our bank guarantee. Our suppliers in India have a right to be paid as we have but there has been absolutely no movement on your side and in fact you have placed restrictions on release of payments in India that are subject to conditions that you have set. We stopped work in India on the sites when it became obvious that no further payment release was to be forthcoming because our suppliers were rightly expecting to be paid. When they tried to remove cranes from site they were stopped. So what you have written is completely untrue. Since Mr 1st party has advised that you have spent $30m on phase 3 and received no payment and neither phase 1 or phase 2 have gas contracts in place to enable you to earn revenue and credit reports that banks use show a risk then we have no choice but to take care. Finally let me explain that I offered to meet Mr 1st party because as I have told him as well as you face to face, he is the controller of everything at 1st party and the person who made the personal commitments. He said he would not meet me or any other representative of 2 nd party but said meetings had to be with 1st party managers responsible for projects. We are far beyond that point. We have not failed in our obligations and we have attempted to keep all the jobs moving. I am yet to see one single positive action move on the side of 1st party since the sites were stopped and since we met Mr 1 st party on 20th November 2011 no solutions have been provided either. I met you and offered to assist yet the terms we discussed and which I confirmed in meeting notes based on your notebook were countermanded on your return to India. You did not go to the phase 2 site to commence action that we agreed and you were sent somewhere else. So most of your statements are completely untrue as this e-mail shows. We are the party trying to finish the jobs but on 1 st party side you don’t do anything that you promise to do. Again I ask you to confirm that you are not trading illegally because you are not making payments and if you are out of pocket by $30m on phase 3 how can we be reassured that this project can be resolved?Regards 2nd party CEO

From: 1st party /Sent: 24 March 2012 05:16/To: 2nd partyCc: 2nd party managersSubject: Re: 1st party Group Credit Report Dear Mr. 2nd party,Thanks for your conservative thinking mail, we would have appreciated and acted to your efforts if you have acted in a legitimate manner to suppress the difficulties. In addition Mr. 1st party had always shown keen interest in sorting out issues amicably and even extended invitations to meet you or your representative anytime at our head office. I have documentary evidence for the same and you are making false allegation to cover your draw backs. Instead of working on the front line to address the issues you have started banking on various other factors which states your displacement towards credibility. It is visible from all your mail that, you are always concerned only about the money and not bothered about your contractual adherence, requirements, commitments and performance. We have always requested you to come out of the ecstasy and look into the realities, wherein you have failed. There is enough evidence available to suggest our proactive involvement in the project and you are only interested in writing long mails with false allegations and not performing. We put on record that you are sabotaging our project for which we will act at an appropriate time.It is needless to say to you about our supply chain, however we would like to inform you that our supply chain are robust and professional except a bug which we are dealing now at this juncture. You are requested to clarify under what grounds you are asking about our current trading situation and ability to pay our suppliers. Is our proposal to open LoC towards pending payment against deliverables was not adequate? It is evident from your non acceptance of our LoC proposal that your team didn’t have the competence to execute contractual commitments therefore seeking refugee.At the outset, we can respond only to our contract requirements and advise you to come to the point and henceforth we will not entertain shallow mails and communications. For rest of the information needed you can approach the same source from where you got the information. From your mail It is evident that you are shaken to face the consequences from stakeholders due to incompetence and reasons beyond control thereby now seeking alimony and evade the consequences. Best regards/1st party

From: 2nd party /Sent: 23 March 2012 16:00To: 1st party/Cc: 2nd party’s managersSubject: RE: 1st party Group Credit Report Dear 1st party,My interpretation from your lack of response is that you have difficulty to answer. Perhaps this because of your recognition that our concerns are legitimate and I wouldn’t like to think it is because you are worried that you lack funds to meet all your commitments. This has been our concern for several months, since Mr 1 st party made an open plea to us for assistance, when he visited on 20 th November 2011. It does seem that you almost totally rely on milestones being met to claim project instalments. On jobs with Project financing funds are normally used to pay suppliers who are working on the projects as well as to cover your contract expenditure. Priority should not be to cover your costs that must have escalated because of lack of availability of gas. We understand that pressures like this do affect projects but we will not increase our exposure that is already significant because you have failed to fulfil your obligations on Phase 3. Mr 1st party told me this week that he did not get paid so he is perfectly entitled not to pay us. I don’t understand this logic. I have offered to meet with him but he has declined. We keep trying to support you to help you resolve these problems yet all our efforts are frustrated. You have had my input many times as CEO of 2nd party and we will of course respond to your communications when ready after review by legal experts.

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I repeat my request for you to provide re-assurance about your current trading situation in view of the Credit Report on your Company that we have received. As officers of the Company you may be personally liable if you are trading knowing that the Company has difficulty to meet its debts. That’s all I am asking you to confirm for now. We are deeply concerned and I have to ask these difficult questions as CEO of a Public Listed Company. I repeat that we are trying to help you.Kind Regards/2nd party

From: 2nd party Sent: 22 March 2012 13:07/To: 1st partyCc: 2nd party’s managersSubject: FW: 1st party’s Group Credit Report Dear 1st party,This e-mail is sent in case you didn’t speak to Mr 1st party or be informed of my e-mail to him. For some time now our banks have had concern about your trading situation and the legality of continuing to operate without adequate bank financing in place. We have tried to be helpful but you constantly seek to separate contracts and ignore the real issue that is related to the lack of LOC or payment of Phase 3.Your credit rating is not strong and a limit of $200,000 of credit is recommended without security . We now need to invoice for all our costs for all three projects that include suspension costs and disruption costs.We wish to establish if we are the only supplier who has been treated in this way on these 3 projects and so have suffered unfairly.Whilst you pressurise us in many different ways to complete phase 1 & 2 projects you have totally ignored the Phase 3 contract and Mr 1st party where you have no income to support the orders that you have committed. Mr 1st party did make lots of promises and personal assurances. Can you provide us with reassurance about your current trading situation and your ability to pay suppliers. We may need to communicate directly with your bank and the Power Ministry to investigate and provide comfort information. Please respond by end of today and acknowledge receipt. Kind Regards/2nd party /CEO

1st party Actions on 2nd party: Contractual ActionsPending such extremely high magnitude/quantity/volume of balance performances has brought us to a bad state of business that does not evaluate our integrity positively/progressively as an EPC professional contractor. We expected to earn considerable value engineering by your 2nd part contracting engagement while, agreed with you on this prestigious contract, but we have earned bad name, our image has tarnished, we have been loosening our engineering & contracting value & we have incurred considerable financial losses, time losses, reputation losses. That is why we are resorting to well disciplined & well determined contractual actions for Termination of contract. Consequent upon, to Termination of this contract, contents on following paragraphs give an outline respecting further implications that shall be caused to have effect, as post Termination follow up until, this project is delivered finally to client/company/owner.

1. All such foregoing explained actions amount in letters & spirit against defined & set objectives of this bipartite energy based national development business contract & do amount to bad business & professional practices demonstrated by you 2nd party on prosecution of this contract.

2. All foregoing observations & facts, explicitly suggest on your part, shear lack of interest to deliver defined scope of works & activities since, you 2nd party have violated various provisions on contract deliberately, inactions of which do direct to breach of your contractual obligations, not meeting contractual requirements and non compliance with terms & conditions included on body of contract, on account of which, we are not pleased with your performance & have therefore, decided to contemplate to notify on you, your 2nd phase Service Contract Termination. Following conclusive actions shall elaborate Termination of this service contract for implementation.

3. Consequently, keeping in our view all foregoing explanations & circumstances created by you as 2nd party & our further well thought, applied mind as far as, this contract is related, we are of an opinion to have decided that your further direct involvement on this service contract as indicated on references on top of 1st page, shall certainly, further obstruct to achieve contract performance up to a 100 % mark to its extent of scope of works are concerned.

4. We are not willing to earn any more bad reputation in business circles & therefore, we have decided that we shall operate prosecution of remaining parts of unperformed scope of EPC contract of works, on either by our own or by procuring in, another competent party absolutely on your behalf, risk & cost covering all liabilities whatsoever.

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5. This notice shall be affected in line to provisions agreed in Work Order clause 15 ‘Right of Acceptance’ clause 15.1 & clause 15.2. Clause 15.1 states that upon default of contractor Vis–avis the contractual terms & conditions, the employer reserve the right to terminate the order/discontinue/stop the services at any point of time during currency of the order. &

Whereas, clause 15.2 states that in the event of unsatisfactory service or any failure at any time on part of contractor to comply with terms & conditions/provisions of this contract to the satisfaction of employer, it shall also, be open to employer to make any alternative arrangements as deemed necessary at the risk & cost of the contractor without assigning any reason whatsoever.

6. Termination of this contract as described above, shall come in force with immediate effect subject to allowing a contractual notification of 14 days period from day, this notice is sent by mail to your official mail ID. This notice period of 14 days does not authorize you 2nd party in any way, either to continue to work or any resumption of project works of any kind or sort that had been suspended on your own. Entries to site for you & for your personnel shall be banned by our site management. Should you intend to visit site for any specific issue, you shall apply special entry permission to our site management, representative of whom, shall escort you throughout duration of your visit on site.

7. As consequences of this termination, you shall not be having contractual rights to remove any of your equipment or resources without our approval. You 2nd party shall be expelled from site by site management in case of unauthorized entries. All effects available on site procured for an exclusive purpose for this contract project prosecution performances shall not be allowed to be removed from site. All materials, equipment, tools, plants & all other requirements that have been brought in to site areas shall remain under our custody & intended use on project activities.

8. Whatever, works & activities carried out by you shall be measured jointly if so required but, immediately without causing any delays. Within this notice itself, we have included a descriptive list of works that have not been carried out & can be ratified by site representatives of both parties. Based on these measurements, an amount shall be determined by agreement of both parties regarding valuation of works carried out on project till date of termination of contract notification. This amount shall not provide any right to contractor to ask for release of determined sum but, this sum shall be adjusted in future settlements of accounts. Should you fail to join this measurement of contract performance activity after being notified by either our head office or by our site management representative, you shall loosen all your further rights to visit & measure valuation determination activity & whatever, valuation determination of performed works is declared by site representative, shall be binding on you 2nd party for acceptance & ratification until, further adjudicated by some other competent authority of competent jurisdiction.

9. We record herein that contractually, we enjoy an absolute right to employ on your behalf & at your risk & cost, your vendors with whom, you had executed subcontracts while, you shall not stop or prevent them from doing performance of any activity on site for which purpose, we shall utilize your subcontract provisions/continuation of their deployments for further project performance. Employment of existing subcontractor & other subcontractor/s on your behalf shall not relieve you from any of your contractual binding responsibilities entrusted on you.

10. You shall also, provide us with all project documents, post contract documents, all documents prepared by your subcontractors/vendors & all other data of any sort. You shall also, provide us with all documents related to this projects executed between you & your subcontractors/vendors. You shall also, transfer all titles applicable on any equipment or vessels or others & still stand in your name. Contractually, these titles shall stand in our names & then, further be transferred to client or Company name.

11. You shall also, confirm that you have instructed your relevant vendors whosoever, to transfer all project technical & engineering benefits to us for use on project that by virtue of this project &

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operation of engineering, should be with them for purpose to be used as Quality Dossier Documents/Operation Manuals etc. for permanent project operation & maintenance use.

12. We also, intimate that any payments due to your subcontractors that officially make any application for moving such claims on us for purpose of their pending performance due, shall be examined by us on site & if so verified by site that their respective claims do amount to facts, demanded payments shall be released to them on your risk & cost. You are well advised, that in any case, you attempt to prevent them from performing works on site or act unlawfully in this or in any other regard, we shall enjoy our contractual rights as well as, rights under common law & other relevant laws importable from criminal procedures, shall be at liberty to elect to resort any viable legal action against you or your representative whatsoever, for which you as 2 nd party on this contract shall own full responsibility in case of occurrence of any adverse or unbecoming incident.

13. We have also, worked out our claims on this termination account that we record for your current & future references, forming an integral part of this notice or action. These claims are detailed on various attached annexure & shall be claimed legally under various contractual provisions. These provisions may be referred to application of defined LD (liquidated damages) imposition due to contract performance delay, damages caused to us on account of quality non compliance, losses caused to us on account of loss of reputation, loss of business prospective due to our inefficient deliveries of products & any other claim whatsoever, deemed to be applied necessary for determination of our compensation & defined hereinafter, vide various annexure & indicated in paragraph 16.

14. You should clearly note that due to post termination activities shall be carried out absolutely on your risk & costs in all respects as far as & to an extent on all contractual provisions, all expenses shall be recorded/documented for your references. All such sums as spent diligently, with taking reasonable care that should have been effected by an experienced professional person or functionary shall be expended without your permission/ approval. All such other sums spent on any of your other liability shall also, be included on claims. All payments made to any person or persons on your behalf shall be included on claims. All these expenses incurred on this project after, termination has become effective, shall be recovered from your project contract fixed sum payable to you. And, in case of negative amount resulting out after determinations of such actions, that negative amount shall be legally recovered from you 2nd party under similar procedures as, it had been a loan allowed/paid to you on account of prosecuting this contract. Reasonable interests shall be charged on such deemed loan amount as well as, on all expenses made on your behalf & on your risks & costs.

15. It is further added that this notice has been served on as a part of existing clauses as defined & included within foregoing contract administration for operations respecting termination while, it is fully purported to be supported by provisions of Indian Contract Act, Indian Civil procedure codes, Indian limitations Act, Indian Information Technology Act, If so required, would attract provisions of Indian panel code, should you act unlawfully. It shall import or draw relevant provisions from Indian Contract Act &other applicable Acts, transferring all legal liabilities onto you, 2nd party, your representatives, your legal heirs & all your legal successors.

16. Reflection of claims to be made in line to this notice: Refer to details included on various annexure at the end & attachments

Annexure 1………… Cost to be spent on contract balance scope of works

Annexure 2…………. Cost to be spent on operations of various clauses

Annexure 3………… Cost to be spent on subcontractors who await due payments

Annexure 4………..... Cost to be spent on administration on your behalf

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Annexure 5…………. Cost to be spent on post completion operation & maintenance

LD imposition……….

Cost to be spent (others)………

Other losses caused to us

Cost paid to you………

Cost to be paid to you.

17. Details elaborating foregoing cost included in paragraph 16 have been included as attachments to this mail. Contents of all such files & this notice file are integrated together to constitute body of this Termination Notice.

18. Immediately, after this Termination Notice is received by you through E mail medium, contractual & legal relations, that have been existing, since this contract was executed, shall no more exist on an active participation basis to an extent this contract is related. All active executive & working relations shall cease for all further considerations.

Yours Faithfully,For and on behalf of 1st party CEO

Annexure 1

Cost to be spent on contract balance scope of works

S No. Description Amount (in lacs Rupees)1. Completion of balance Mechanical Erection

activities for HRSG-3 and HRSG-4 (costs of materials & manpower have escalated since, this contract was executed. Project did not finish in due time. Delays caused that resulted on added price on to Lump Sum price limit)

250.00

2. Charges for Crane Hire in completion of above (included sum based on required hours of equipment renting)

150.00

3. Expense in completion of insulation works (included sum based on required quantities)

25.00

4. Cost of Insulation Material (included sum based on required quantities)

50.00

5. Expense in completion of electrical, control & Instrumentation for HRSG-3 and HRSG-4 (included sum based on required quantities)

50.00

6. Cost of consumables, machine tools and tackles (included sum based on required quantities)

225.00

7. Cost to be incurred in completing commissioning activities upto steam test and IBR certification and Statutory approvals (included sum based on required quantities)

145.00

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Total 895Annexure 2

Cost to be spent on operation of various contract clauses

S No. Description Amount (in lacs Rupees)1. Administration Charges on operation of various

contract clauses tentatively required to be spent necessarily, on balance scope of works as well as, all those clauses, which were not operated or, yet to be operated under 2nd party’s Division of responsibility on contract.

100.00

Total 100Annexure 3

Cost to be spent on subcontractors who await due payments

S No. Description Amount (in lacs Rupees)

1. …… Projects Pvt. Ltd. (included sum based on actual prices vendor demands) 67.00

2. ……. Crane Service (included sum based on actual prices vendor demands) 26.00

Total 93Annexure 4

Cost to be spent on Administration on your/2nd party behalf

S No. Description Amount (in lacs Rupees)1. Supervision charges 135.002. Personnel Accommodation, transportation 45.003. Consultation fee charges 40.00

Total 220Annexure 5

Cost to be spent on post completion operation & maintenance


1.Operation and maintenance charges for 12 months post mechanical completion of plant facility which is within scope of contract

150.00

2. Tools and tackles 25.00Total 175

Annexure 6

LD imposition & other losses

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1. LD 76.5Lacs+performance penalty Will be informed later

2.

Other losses caused to (On account of time overrun Interest During Construction charges, Opportunity loss in gas allocation priority, generation revenue loss @INR 25million per day)

Will be informed later since, included amount is indicative only.

3.Loss on profits on estimated product production proceeds Cost to be paid to us 1st party by 2nd party (loss in revenue generation)

Will be informed later since, details are not available currently.

Total 76.5Lacs

LD detailed Calculation

S No. Description Amount (in lacs Rupees)1. No. of . Weeks starting from 01.11.2011 22 Weeks2. Total cost of Project 765Lacs 3. Cost Per week @ 0.5% 3.83 Lacs4. Total cost of LD for 22 weeks 84.26.00 Lacs

5.Max Permissible LD for completion is 10% of service contract value as per clause 6.0 Liquidated Damages of our Work Order

76.5Lacs

6.

Performance penalty if the unit does not perform as per specification, Max Overall Penalty shall be 15% of the Total contract Value, however it is considered here as 10%. If the Boiler pass the performance test the amount mentioned herein shall be credited back to contractor after due deductions currently and when, balance of the contract scope works are completed successfully & satisfactorily.

76.5Lacs

Annexure 7

ABSTRACT


1. Cost to be spent on contract balance scope of works (Annexure -1) 895.00

2. Cost to be spent on operation of various contract clauses (Annexure – 2) 100.00

3. Cost to be spent on subcontractors who await due payments (Annexure – 3) 93.00

4. Cost to be spent on Administration on your behalf (Annexure – 4) 220.00

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5.Cost to be spent on post completion operation & maintenance (Annexure – 5) 175.00

6. Liquidity Imposition (Annexure – 6) 76.5Lacs+performance penalty Will be informed later

7.

Other losses caused to (On account of time overrun Interest During Construction charges, Opportunity loss in gas allocation priority, generation revenue loss @INR 25million per day from 23rd Jan 2012 onwards)

Will be informed later when actual cost value is available

8. Cost to be paid to us (loss in revenue generation) Will be informed later when actual cost value is available

Total Payment to be made to M/S 1st party by M/s 2nd party in India excluding the payments given by M/s 1st party as mentioned below.

1483

9. Payment against RA Bill made by us to M/s 2nd

party in India 177.17

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