General terms bunker

General Terms and Conditions of Sale


1. Definitions

1.1. “Bunkers” means the Seller’s different grades of heavy fuel, diesel, gasoil and lubricating oils and any other products and/or services offered for sale by the Seller.

1.2. “Buyer” means the Vessel and any party requesting quotations, placing orders, purchasing or otherwise contracting to receive the Bunkers from the Seller, including but not limited to the Vessel’s owners, disponent owners, charterers, operators, managers, masters, agents and brokers.

1.3. “Conditions” mean these general terms and conditions of sale.

1.4. “Contract” means an agreement between the Seller and the Buyer for the supply of the Bunkers, always subject to these Conditions.

1.5. “Physical Supplier” means Olíudreifing ehf. or any other third party appointed by the Seller to deliver the Bunkers to the Vessel, as applicable.

1.6. “Seller” means N1 ehf. or any of their servants, officers, agents, brokers, designated
representatives and their subsidiaries or affiliates, wherever applicable.

1.7. “Vessel” is the vessel to which the Bunkers are delivered under the Contract.


2. Scope

2.1. Integral part. These Conditions constitute an integral part of the Parties Contract and shall apply thereto, and the Seller’s supply of Bunkers shall always be subject to these Conditions. These Conditions embody all the terms and conditions applicable to the Contract, save for any conditions which may be agreed on between the Seller and the Buyer, and supersede and cancel in all respects any previous conditions by the Seller.

2.2. Whole agreement. Together with the Contract these Conditions constitute the whole agreement made between the Seller and the Buyer.

2.3. Amendments. The Seller reserves the right to include, at its discretion, any additional or substitute terms and conditions. Any such additional or substitute terms and conditions shall prior to the time of concluding the Contract be advised by the Seller to the Buyer, either, via written notice, or, in other suitable form.

3. Owner’s Acceptance

3.1. Acceptance. Bunkers delivered under a Contract shall be made for account of the Buyer. If the legal entity with whom the Contract is agreed with is not the registered owner of the Vessel, the master (or any other officer or representative of the Vessel), by signing or stamping the bunker delivery notes or other similar document and by taking delivery of the Bunkers, shall be deemed to have full authority on behalf of the Vessel and her registered owners to take delivery of the Bunkers and accept these Conditions. The Buyer further warrants that it is authorized as agent to order the Bunkers for the Vessel. If the party requesting the Bunkers is not the Owner of the Vessel, the Buyer assumes the sole responsibility for communicating the terms and conditions of this Agreement to the Owner of the Vessel prior to the date of delivery.


4. Terms of Offers and Contracts

4.1. Quotations, offers and estimates. The Seller’s offers, quotations and estimates of prices and other costs are to be understood as being conditional, subject to availability and alteration, and shall include only such products as are expressly specified.

4.2. Binding offer. Offers become binding as an agreement when the Buyer receives confirmation from the Seller. Until the Buyer´s accept of the offer reaches the Seller, the Seller is entitled to enter into agreements with third parties concerning the offered deliveries thereby voiding the offer. In case the Buyer´s acceptance does not comply with the terms of the offer, the Seller is entitled to consider his offer to be declined. In the case the Seller is entitled to enter into agreements with third parties concerning the offered deliveries.


5. Prices, Invoicing, Payment, Interest, Collection Costs

5.1. Prices. The Buyer shall pay the agreed price in the agreed currency on the agreed payment date or as stated in the Sellers invoice. The invoice is valid whether mailed, telexed, emailed or transferred by other means of communication. Payment shall be free of all bank charges and other costs and be made into the Sellers bank account.

5.2. Additional expenses and costs. The Buyer shall pay any additional expenses and costs such as barging, overtime, demurrage, wharfage, dockage, part/harbor/agency fees, dues, duties, taxes, levies and other costs, including those imposed by governments and local authorities. The Seller shall endeavor as applicable to include, by way of estimates, these additional expenses and costs as possible.

5.3. VAT and other taxes. All quoted prices and the prices mentioned are exclusive of VAT and other taxes, unless specifically stated. VAT and other taxes and similar charges shall always be promptly paid by the Buyer upon receiving the Seller’s invoice. The Buyer is obliged to until delivery to accept changes in the price that are a consequence of documented, increased costs for the Seller caused by changes in the rate of exchange, customs taxes, charges, etc. concerning the agreed delivery.

5.4. Interest and administration charges. In the event that payment is not received by the Seller by the due date the Seller is entitled to interests at the rate of 1,25 percent per month pro rata compounded each month without prejudice to any other rights or remedies available to the Seller. The Seller shall also be entitled to charge a delayed payment administration fee of USD 1.50 per metric ton supplied with a minimum administration fee of USD 500.00.

5.5. Collection costs. The Seller’s collection costs shall be solely for the Buyer’s account. If the Buyer fails to make payment in full on the due date for payment, the Seller may at its discretion take legal action to collect the overdue payment. The Seller’s costs and expenses incurred in connection with the collection of such overdue payments shall be indemnified by the Buyer upon demand from the Seller. These costs and expenses include, but are not limited to, interest charges, internal costs, and external costs such as expenses to lawyers, debt collectors or other consultants, court fees, costs for translating documents, bailiff’s or Marshall’s fees and any collection costs of whatsoever nature. The Seller shall be entitled to invoice those costs from time to time.

5.6. Allocation of payments. All payments received by the Seller shall be applied to settle, first, any overdue interest and administration charges, then, to any collection costs incurred (such costs to be indemnified by the Buyer), and, then, to principal.

5.7. Anticipatory breach. If the Buyer’s right to possession of the Bunkers ceases, the Seller shall be entitled to demand all payments settled immediately, whether or not such payments have fallen due under the Seller’s invoice.

5.8. Security. The Seller shall at all times be entitled to require that the Buyer gives security for the proper performance of all of the Buyer’s payment obligations. Security shall be given to the satisfaction of, and as deemed sufficient by, the Seller. Failure to immediately provide such
security shall entitle the Seller, inter alia, to suspend further performance of any and all orders and to assert any other right and remedy available under the Contract and under the law

6. Quality

6.1. Quality. It shall be Seller´s or the Seller´s suppliers´ s usual commercial quality for Bunker that is offered to the Buyer at the point in time the delivery takes place or according to submitted specification. The Seller does not have any responsibility for the choice of appropriate marine oil to be used in the vessel to which it is delivered.

6.2. Changes. The Seller reserve the right to make changes, without prior notice, in the contracted specifications, if this can take place without substantial disadvantage to the Buyer.

6.3. Quality claims. Any claims relating to the quality of the Bunkers delivered shall be notified by the Buyer and/or the Vessel to the Seller as soon as possible and not later than within 14 (fourteen) days after completion of delivery in the form of a written letter of protest with full supporting documentation. If the Buyer or the Vessel’s master fails to present such letter of protest to the Seller, such claim shall be deemed to have been waived and shall be absolutely barred for all purposes.

6.4. Samples. The Seller shall take four representative samples of each grade of marine oil delivered. The Buyer or his accredited representative shall be at liberty to witness the sampling. Two sealed samples shall be handed to the master of the receiving vessel, one of which being dedicated as the MARPOL sample, and the other two samples retained by the Seller or their representative for 30 days from the date of delivery in a safe place where they will not deteriorate. At the end of the said 30 days the samples may be discarded unless the Buyer has complained or claim within 14 dates from the date of delivery in which case the sample will analyzed by a recognized company. No sampling will take place in connection with purchases from self-serving units or with purchase of lubricating oils.

6.5. No liability for commingling. The Seller shall have no liability whatsoever for claims arising in circumstances where the Buyer may have commingled the Bunkers on board the Vessel with other fuels or similar products.


7. Quantity – claims

7.1. Quantity. All quantities referred to in the Contract are understood to be approximate with a margin of 10 per cent more or less in the Seller’s option.

7.2. Determination of quantity. The quantity of the Bunkers delivered shall be determined solely from the information inserted into the bunker delivery note which shall be signed by the Seller. The Buyer may be present or represented by a properly accredited agent or surveyor when quantity measurements are taken. If the Buyer is not present or represented, the Seller’s determination of quantities shall be deemed to be final and binding on the parties. Quantities calculated from the vessel’s soundings shall not be considered.

7.3. Quantity claims. In the event of a quantity complaint, the Buyer or the master of the Vessel shall give immediate notice on the bunker delivery note or issue a separate letter of protest to the Seller or Seller’s representative. If the Buyer fails to provide timely notice to the Seller, any such claim by the Buyer shall be extinguished as non-existent.


8. Delivery and Risk of Delay

8.1. Notice. The Buyer shall always notify the Seller at least 72 hours (Saturday, Sunday and local holidays excluded) in advance of the Vessel’s readiness to take delivery of the exact quantity of Bunkers to be delivered to enable the Seller to make the necessary arrangements for the delivery.

8.2. Range for delivery. The Contract shall include the earliest estimated time of the Vessel’s arrival (ETA) as advised by the Buyer. The Vessel shall always begin to take delivery within the ETA provided.

8.3. Failure to take delivery. If the Buyer fails to take delivery of the Bunkers, or any part thereof, the Seller shall be entitled, at the Buyer’s risk and expense, either, to transport the Bunkers back to storage, and/or, to sell the Bunkers at the price available in the market and claim damages against the Buyer, without prejudice to the Seller’s other rights under the Contract. The Seller shall also be entitled to charge a minimum cancellation fee of 5% (five) of the agreed prices in case the Buyer fails to take delivery as provided for herein.

8.4. Delivery circumstances permitting. The Vessel shall be bunkered as promptly as the prevailing circumstances permit, having regard to circumstances such as weather, congestion affecting the delivery facilities of the Seller, the Physical Suppliers and/or other agents and subcontractors, and to prior commitments of barges or other delivery means. The Seller and/or the Physical Supplier shall not be liable for any consequences or any time lost due to the Vessel having to wait for berth for bunkering or for completion of bunkering, and unless otherwise agreed in writing, the Seller shall not be obligated to deliver prior to the nominated date or spread of dates. The Seller is not responsible for delays caused by local customs, pilots, port- or other authorities.

8.5. Shortage of supply. If the Seller, for any reason and in its sole discretion, anticipates there may be such a shortage of Bunkers at any port of place that it may be unable to meet the demands of all its buyers, the Seller may allocate its available and anticipated supply among its Buyers in such a manner as it may in its sole discretion determine. The Buyer may raise no claim against the Seller in these circumstances.

8.6. Assistance from the Buyer. The Buyer shall make all connections and disconnections between pipelines or delivery hoses and Vessel’s intake lines and shall render all other necessary assistance and provide sufficient tankage and equipment to receive promptly all deliveries hereunder.

8.7. Transfer of risk. Delivery shall be deemed completed and all risk and liabilities, shall pass to the Buyer as the Bunkers pass the flange connecting the pipelines or delivery hoses with the intake lines of the Vessel. Bunkers supplied by any other methods shall be considered to be delivered under these Conditions when passing the Vessel’s rail.

8.8. Bunker delivery receipt. Upon completion of the delivery to the Vessel, the master, or other authorized representative of the Vessel, shall confirm the delivery on behalf of the Vessel and the Buyer by signing a bunker delivery receipt provided by the Physical Supplier.

8.9. Normal working hours. Delivery shall be made during normal working hours. Unless otherwise agreed, deliveries outside normal working hours shall be subject to additional costs, which shall be borne by the Buyer.


9. Health, Safety and Environment

9.1. Environment. The Seller and the Physical Supplier shall bear no risk for any harm caused to the environment. In the event of any leakage, spillage, overflow of bunker’s causing or likely to cause pollution occurring at any stage, the Buyer shall, regardless as to whether the Buyer, the Seller or any third party is responsible, immediately take such action as is necessary to affect clean up, and, failing prompt action, the Buyer (who hereby warrant that they have been authorized by the Vessel’s registered owners) hereby authorizes the Seller to take whatever measure(s) the Seller deems necessary to efficiently clean-up and restore the environment at the Buyer’s cost and expense. The Buyer shall defend, indemnify and hold the Seller and/or the Physical Supplier harmless against any claim or liability arising out of any leakage, spillage or overflow, unless such leakage, spillage or overflow shall be proven to be wholly caused by the Seller’s and/or the Physical Supplier’s gross negligence.

9.2. Regulations. The Buyer warrants that the Vessel at all material times complies with all applicable national and international regulations. It shall be the responsibility of the Buyer and the master of the Vessel to notify the Seller of any special condition, difficulties, peculiarities, deficiencies or defects with respect to the Vessel or any part thereof, which might adversely affect the delivery of Bunkers. The Seller has the right to refuse to deliver the product to the vessel if it’s deemed probable in the Sellers sole discretion that such delivery will result in adverse consequences of any kind whatsoever.


10. Limitation of Liability and Consequential Damages

10.1. Indemnity. The Buyer agrees to indemnify and hold the Seller and its Affiliates harmless in respect of any liability, loss, damage or expense of whatsoever nature hat the Seller may sustain by reason of a third party bringing a claim against the Seller for personal injury and/or death and/or loss caused by the Cargo (including, but not limited to, the handling of the Bunker) following the passing of risk or title.

10.2. Incomplete information. The Buyer shall indemnify the Seller for all direct or indirect losses, costs, expenses, penalties and interest incurred by the Seller as a result of the Buyer’s failure to provide the Seller with the information and documentation necessary and/or as a result of the Buyer’s failure to pay, or delay in paying, any taxes and/or other charges. For the avoidance of doubt the same shall apply if any information provided is incomplete or inaccurate.

10.3. Product liability. Product liability is governed at all times by Icelandic law and cannot be subject to rules of any other jurisdiction. Save as provided in non-derogatable Icelandic legislation on product liability applying to the Seller, the Seller undertakes no liability for personal injury or property damages and then only to the extent provided for in such legislation.

10.4. Limitation of liability. The Seller shall be under no liability whatsoever to the Buyer for any loss, damage, delay or expense incurred of whatsoever nature, whether direct or indirect, including but not limited to (i) any loss of profit, hire, business contracts, trading, revenues or anticipated savings, or (ii) for damage to the Buyer’s reputation or goodwill, or (iii) for any loss resulting from any claim made by any third party, or (iv) for any special, indirect, consequential or incidental loss or damage of any nature whatsoever.

10.5. Sellers liability cap. The Seller’s liability is limited to the price for the Bunker sold. In the event the Seller is held liable for any claim, loss, damage, damages, cost, expenses, etc., the Seller’s liability shall never exceed the price for the Bunkers delivered under the Contract as set out in the Seller’s invoice.

10.6. The Buyer’s liability. The Seller is entitled to recover from the Buyer all direct and indirect losses, costs and expenses incurred as a consequence of the Buyer’s breach of contract, and the Seller may terminate the Contract, in whole or in part, at its own discretion upon a material breach by the Buyer.


11. Breach and cancellation

11.1. Breach. The Seller’s liability in case of breach shall be limited under the provisions herein.

11.2. Cancellation. Without prejudice to any other remedies and rights, the Seller shall have the option immediately to cancel the Contract, in whole or in part, or to store or procure the storage of the Bunkers, in whole or in part, for the account and risk of the Buyer, and to charge the Buyer the expenses thereby incurred, or to hold the Buyer fully to the Contract, or take any other measures which the Seller deems appropriate, without prejudice to its rights of indemnification, without any liability on the part of the Seller, in any one of (but not limited to) the following cases: i) when the Buyer, for whatever reason, fails to take timely delivery of the Bunkers, in whole or in part, at the agreed place for delivery; or ii) when the Buyer fails, in whole or in part, to pay any amount due to the Seller and/or provide security; iii) or when, before the date of delivery, it is apparent in the opinion of the Seller that the financial position of the Buyer entails a risk to the Seller; iv) or when, in case of force majeure (as defined in clause 12 below), the Seller is of the opinion that the execution of the agreement should be cancelled.


12. Force Majeure

12.1. Force Majeure. Neither the Seller nor the Physical Supplier shall be liable for any loss, claim, damage, delay, demurrage, etc., due to any delay or failure in their performance under the Contract any cause or event beyond a Party’s reasonable control, including, but not limited to, fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity; navigational accidents or maritime peril; piracy, Vessel damage or loss; breakdown of the Vessel; strikes (including sympathy strikes), grievances, actions by or among workers or labor groups or lock-outs (whether or not such labor difficulties could be settled by acceding to any demands of any such labor group(s) or individuals); accidents at, closing of, or restrictions upon the use of mooring facilities, docks, harbors, ports, Terminals, pipelines, or other navigational or transportation mechanisms; explosions or accidents to wells, pipelines, storage plants, refineries, terminals, machinery and other facilities; acts of war or civil war (whether declared or undeclared), hostilities, civil commotion, embargoes, blockades, terrorism, sabotage, riots and revolution or acts of the public enemy; any act or omission of any directive of any Governmental Authority; good faith compliance with any order, request or directive of any Governmental Authority; failure, cessation, curtailment, reduction or interference with the Product supplies whether lawful or not from the Seller’s or the Seller’s suppliers’ sources of the Bunker, including any refusal for any reason by the Seller’s suppliers to supply the product, provided in fact that the sources of supply are for the purpose of the Contract or any other cause reasonably beyond the control of a Party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such Party could not have been able to avoid or overcome.

12.2. The Buyer. If the Buyer exercises reasonable diligence, the Buyer shall not be liable for failure to receive any particular delivery of Bunkers if prevented therefrom by force majeure (as set out in clause 12.1).


13. Assignments

13.1. The Seller’s right of assignment. The Seller may assign/transfer any/all of its right and obligation under the Contract.

13.2. No assignment for the Buyer. The Buyer shall not assign/transfer any/all of its right under the Contract, without written consent of the Seller.


14. Title

14.1. Retention of title. The Bunkers shall remain the Seller’s property and title therein shall not be transferred to the Buyer until the Seller has received payment in full in accordance with the Seller’s invoice(s) and until the Seller has paid the Physical Supplier in full (the latter requirement shall not apply if the Seller acts as Physical Supplier, in which case title shall transfer only at the time of the Buyer’s payment in full to the Seller). Until the Seller’s retention of title ceases, and title thus has been transferred in full to the Buyer, the Buyer shall:

A. Store them in such a way that they can be identified as the Seller’s property and shall keep them separate from the Buyer’s own property and the property of any other third party;

B. Keep them at the Buyer’s risk and expense from the time of delivery and until the time when the Seller takes redelivery or repossession; and

C. Insure them against any loss or damage, and in the event of such loss or damage it shall notify the relevant insurers that the insured property is owned by the Seller, and even if the Buyer receives any such insurance proceeds, the Buyer shall always hold the proceeds of such insurance on behalf of the Seller as trustee of the Seller and shall request the Seller to inform to which of the Seller’s bank accounts the proceeds may be wired to.


15. Governing law and arbitration

15.1. Law. This Contract shall be governed by and construed in accordance with Icelandic law. The Seller shall be entitled to assert its rights, whether in law, in equity or otherwise, in any jurisdiction where the Vessel may be found.

15.2. Arbitration. Any dispute arising out of or in connection with a Contract, including any disputes regarding the existence, validity or termination thereof, shall be settled by arbitration administrated by the Icelandic Chamber of Commerce in accordance with the rules of arbitration procedure adopted by Chamber of Commerce and in force at the time when such proceedings are commenced. The arbitral tribunal shall be composed of three arbitrators, unless the total value of the Seller’s claim(s) does not exceed USD 500,000 in which case the arbitral tribunal shall consist of a sole arbitrator. The place of arbitration shall be Reykjavík. The language to be used in the arbitration shall be English unless both parties are Icelandic in which instance the language used shall be Icelandic.


16. Entry into force and availability

16.1. Entry into force. These Conditions enter into force once published on N1 website to all Contracts agreed on this date and time or hereafter.

16.2. Availability. These Conditions are available at the Seller’s website, on which site the Seller may public amendments, alterations, changes or verifications to the Conditions. Such amendments, alterations, changes or verifications are deemed to be part of the entire Conditions once same have been published on the said website.