Correspondence relating to execution of civil and erection works

Dear Sirs,

We have to inform you that though Russian side is doing its best to successfully fulfill obligations under Contract No... the progress of the works causes our concern.

We find it necessary to remind you that during the talks in Moscow you suggested we make maximal use of your local labour during the construction and engage local firms as our subcontractors.

The progress of the works, however, shows that the local subcontractors, recommended by you are unable to duly execute the works.

Besides, the schedule of construction of the settlement for Russian specialists has constantly been disrupted which causes a delay in their arrival in your country.

Moreover, the understanding was reached in Moscow that your local organizations would produce and deliver to the construction site equipment and materials stated in the enclosure to the letter. Unfortunately the equipment has not been handed over to our side so far, which drastically affects the progress of the works.

To fulfill the remaining volume of works, in strict accordance with the design documents, Russian organizations will have to send additionally more than... Russian specialists to your country.

Understanding that only a strict observance by the sides of their obligations will enable us to finish the construction of the project in time, we ask you to consider the letter carefully and take the required steps.

Yours faithfully

 

CORRESPONDENCE ON TENDERING

Dear Sirs,

We have pleasure in informing you that the Central tender committee on behalf of our government has invited tenders for carrying out design works, delivery of complete equipment and construction of a thermal power station.

If you wish to participate in the tender, please send us the information on the projects, constructed with your assistance, including such data as the cost, the period of the construction (commencement and completion of the work), the volume of works.

As soon as we receive this information from you, we shall register you as participants of the tender and obtain a complete set of tender documents for you. The expenses shall be charged to your account.

It must be noted that the bidding deadline is set for April... We are to receive your offer and the necessary documents at least two days before the closing time, so that we can submit them to the tender committee in time.

Probably you will be interested to know that the inspection of the construction site will be fixed for March...

We assure you that you can fully rely on our help.

Yours faithfully

 

ЗАДАНИЯ ДЛЯ ПОДГОТОВКИ К ЗАЧЕТУ

Letter I

December, 2000

Mr J.Williams

The Chief Accountant

Machinery-building Plant

10, Camden Road

London EC1 6JJ

England

Dear MrWilliams,

Having carefully studied your comments on our Draft Contract for the construction of the thermal power station on a "turn-key" basis, we would like to draw your attention to the following points of your comments on the clause "Terms of Payment":

1. Credit part of contract price.

We are puzzled to learn that you suggest making payments of the credit part of the contract price in accordance with a schedule of payments. The proposed method of payment contradicts the terms and conditions of the Intergovernmental agreement, providing for making out invoices following deliveries of equipment and materials and under which the date of the utilization of the credit is the date of shipment, stated in the shipping documents.

2. Payments in local and hard currencies.

We agree that payments for the customs clearance, delivery of equipment and materials to the construction site, execution of civil and erection works, insurance of the works and buildings, etc. will be made in accordance with a schedule of civil and erection works, however, we believe that the amounts of monthly payments during the first year of construction should be increased and adjusted to the volumes of work planned to be executed.

As to the payments in hard currency, we share your point of view that they will not be considerable and agree to receive them in the currency suggested by you.

Considering the above we ask you to reconsider your view on the clause "Terms of Payment" taking into account our draft contract and the present letter.

Awaiting your early reply, we remain.

Yours faithfully

Letter II

March, 2001

Machinery-building Plant

10, Camden Road

London EC1 6JJ

England

J.Hutton

Sales Manager

Sirs,

We are puzzled to learn that you have not signed our progress report for the 3rd quarter, this year, on the qrounds that we, as you allege, have not executed the volume of works scheduled for the 3rd quarter.

We have carefully scrutinized the report and are sorry to say that the reason for your refusal to sign it is not valid. To substantite our point of view we would like to remind you of the following:

Notwithstanding our best efforts to fulfil the schedule for the 3rd quarter, we had to suspend the civil and erection works several times due to the circumstances beyond our control, in each case duly informing you about it.

You certainly know that constant delays in unloading our vessels and customs clearance of the cargo cause delays in delivering equipment to the construction site.

Furthermore, in spite of our duly written notices of check-ups and handing over of covered-up works, the representative of the Engineer did not come to the construction site at the appointed time causing numerous postponements of check-ups and tests.

In view of the foregoing, we stress again that we find your objections groundless and urge you immediately to sign the progress report, which will enable us to get the financing required for further execution of the works.

Looking forward to your prompt reply, we remain

Yours faithfully

Letter III

December, 2000

Mr Brown

The Director

Brown and Co.

The Machine-Building Plant

34, High Street

London, E.C.B.

England

Dear Mr Brown,

We acknowledge receipt of your letter enclosing a list of the trainees to be sent to Russia this year to undergo vocational training.

We are surprised to learn from your letter that you have already fixed the departure of your trainees for January 20, 2001. In this connection we consider it necessary to remind you that first of all you are to forward a list of the specialities you intend your trainees to undergo vocational training in.

We take the opportunuty to remind you of Article 6 of the contract which states that the data on the trainees who are being sent to Russia should be submitted to the objedinenije not later than two months before their arrival in Russia. In addition to that, in accordance with this article you are to inform the objedinenije of the date of the trainees' arrival in Russia 10 days before their departure.

Our objedinenije requires the above data so that they can coordinate the trainees' arrival with the appropriate Ministries and receiving factories, and also book accomodation in hotels, provide transport facilities in Moscow and arrange the transport for your trainees to the places of training.

As the above mentioned information has not reached us, we have to inform you that we are not in a position to receive your trainees earlier than in April of 2001.

Awaiting your reply.

Mr Smirmov,

The Personnel Manager

Letter IV

March 2000

Mr Peter Long

The Chief Accountant

Jakarta Motors Ltd.

58, Jalan Thamrin

Jakarta

 

Dear Sirs,

In reply to your letter of 15th March, this year, in which you ask us to specify the terms of payment we are ready to inform you of the following:

1. All payments for the equipment to be delivered should be made in pounds sterling in accordance with the Trade and Payments agreements in force between our countries, the sums due to us being remitted to the account of the Bank for Foreign Trade of Russia with the Central Bank of your country in favour of our objedinenije.

2. Payments under the contract shall be made in the following way: -advance payments of 25% of the contract value should be paid within 30 days of the date of signing the contract;

-the remaining 75% shall be paid by five annual installments of 15% each, the first installment being paid within 12 months of the date of the bill of lading for the last consignment of the equipment.

At the date of the last shipment the Supplier will draw five drafts on the Customer. The drafts shall be accepted by the Customer within 5 days of the date of the receipt.

For using the credit the Customer will pay to the Supplier a 3.5% interest per annum. The amount of each draft will include the interest due on the maturity date of the draft.

We trust the information we have given you is sufficient to enable you to consider favourably the proposed terms of payment and we shall be able to discuss them in detail during our talks.

Yours faithfully

Mr Basukin

The Chief Accountant

Letter V

July 2000

Mr G.Stone

The Chief Engineer

Chemical Plant

20, St. Paul Street

Manchester

England

Dear Mr G.Stone,

We have received your letter of May 30, this year, making a claim on us because of delay in commissioning the station and claim damages.

In this connection we would like to remind you of the following: under the contract you were to hand over to us the construction site within one month of the date of signing the contract.

You delayed, however, the handing over of the site for 3 months, which delayed the commencement of the construction works.

Besides, during the execution of the contract, because of repeated violation of your contractual obligations serious difficulties arose.

It was with great delay that you made expansion of the settlement for the workers of the station and you did not render us proper assistance in providing customs clearance of the equipment and materials necessary for the work.

In spite of the fact that only 3 months have passed since the date of the expansion of the contractual time the station is ready for acceptance tests.

Taking into account the above, we consider your claim unjustified and request you to withdraw it.

Yours faithfully

Mr Vasilyev

the Chief Manager

Letter VI

Уважаемые господа,

В ответ на Ваше письмо от15 марта с.г., в котором Вы просите уточнить предлагаемые условия платежа, сообщаем Вам следующее:

1. Все платежи за поставляемое оборудование должны быть осуществлены в фунтах стерлингах в соответствии с торговым и платежным соглашениями между нашими странами, путем перевода причитающихся нам сумм на счет Банка для внешней торговли России в Центральном банке вашей страны в пользу нашего объединения.

2. Предусмотренные контрактом платежи должны быть осущес-твлены следующим образом:

-аванс в размере 25% от стоимости контракта выплачивается в течение 30 дней с даты подписания контракта;

--стальные 75% от общей стоимости контракта выплачиваются пятью ежегодными взносами в размере 15 %, причем первый платеж должен быть сделан в течение 12 месяцев с даты коносамента на последнюю партию оборудования.

 

На дату последней отгрузки Поставщик выставит на Заказчика пять тратт. Тратты должны быть акцептованы Заказчиком в течение 5 дней с даты их получения.

За пользование кредитом Заказчик уплатит Поставщику проценты из расчета 3,5% годовых. Сумма каждой тратты будет включать процент, причитающийся на дату платежа по тратте.

Мы полагаем, что данная информация поможет Вам положительно оценить предлагаемые условия платежа, и мы сможем детально обсудить их во время наших переговоров.

Letter VII

1 July 2002

Mr G. Stone

The Chief Engineer

Chemical Plant

20, St. Paul Street

Manchester

England

Dear Mr G. Stone,

We have received your letter of May 30, this year, making a claim on us because of delay in commissioning the station and claim damages.

In this connection we would like to remind you of the following: under the contract you were to hand over to us the construction site within one month of the date of signing the contract.

You delayed, however, the handing over of the site for 3 months, which delayed the commencement of the construction works.

Besides, during the execution of the contract, because of repeated violation of your contractual obligations serious difficulties arose.

It was with great delay that you made expansion of the settlement for the workers of the station and you did not render us proper assistance in providing customs clearance of the equipment and materials necessary for the work.

In spite of the fact that only 3 months have passed since the date of the expiration of the contractual time the station is ready for acceptance tests.

Taking into account the above, we consider your claim unjustified and request you to withdraw it.

 

Yours faithfully

Mr Vasilyev

the Chief Manager

Letter VIII

29 March 2002

Mr Peter Long

The Chief Accountant

Jakarta Motors Ltd.

58, Jalan Thamrin

Jakarta

Dear Sirs,

In reply to your letter of 15th March, this year, in which you ask us to specify the terms of payment we are ready to inform you of the following:

1. All payments for the equipment to be delivered should be made in pounds sterling in accordance with the Trade and Payments agreements in force between our countries, the sums due to us being remitted to the account of the Bank for Foreign Trade of Russia with the Central Bank of your country in favour of our enterprise.

2. Payments under the contract shall be made in the following way:

-advance payments of 25% of the contract value should be paid within 30 days of the date of signing the contract;

-the remaining 75% shall be paid by five annual installments of 15% each, the first installment being paid within 12 months of the date of the bill of lading for the last consignment of the equipment.

At the date of the last shipment the Supplier will draw five drafts on the Customer. The drafts shall be accepted by the Customer within 5 days of the date of the receipt.

For using the credit the Customer will pay to the Supplier a 3.5% interest per annum. The amount of each draft will include the interest due on the maturity date of the draft.

We trust the information we have given you is sufficient to enable you to consider favourably the proposed terms of payment and we shall be able to discuss them in detail during our talks.

Yours faithfully

Mr Basukin

The Chief Accountant

Letter IX

12 December, 2002

Mr Brown

The Director

Brown and Co.

The Machine-Building Plant

34, High Street

London, E.C.B.

England

Dear Mr Brown,

We acknowledge receipt of your letter enclosing a list of the trainees to be sent to Russia this year to undergo vocational training.

We are surprised to learn from your letter that you have already fixed the departure of your trainees for January 20, 2003. In this connection we consider it necessary to remind you that first of all you are to forward a list of the specialities you intend your trainees to undergo vocational training in.

We take the opportunity to remind you of Article 6 of the contract which states that the data on the trainees who are being sent to Russia should be submitted to the enterprise not later than two months before their arrival in Russia. In addition to that, in accordance with this article you are to inform the enterprise of the date of the trainees’ arrival in Russia 10 days before their departure.

Our enterprise requires the above data so that they can coordinate the trainees' arrival with the appropriate Ministries and receiving factories, and also book accomodation in hotels, provide transport facilities in Moscow and arrange the transport for your trainees to the places of training.

As the above mentioned information has not reached us, we have to inform you that we are not in a position to receive your trainees earlier than in April of 2003.

Awaiting your reply

Mr Smirmov,

The Personnel Manager

Letter X

20 December 2000

Mr Robert J.Winston

Export Division

Interfon, Inc.

1677 Sea Harbor Driva

Orlando, Florida 35509

USA

Dear Mr Winston,

In reply to your cable of December 18, this year, we are offering apologies for the delay in sending a reply to your letter of November 20, this year, with your Draft Agency agreement enclosed.

We have carefully studied the Draft and are sorry to have to tell you that we are unable to accept some of the articles as they are worded in the present draft.

Will you please note that we would like your obligations to include not only obtaining orders for us and providing assistance in arranging our participation in tenders invited in your country, we also would like you to keep us informed of your country's market condition and run a wide publicity campaign of our equipment.

 

We would also request you to supervise unloading, transportation and storage of our equipment in your country while executing "turn-key" contracts.

As regards payments of commission to you we would emphasize that we usually do that only after we have received payments from the Customers and in the currency of these payments only.

We also think it necessary for you to include an article providing that the present Agency agreement does not cover design works, sales of equipment or rendering technical assistance in your country under the Intergovernmental agreements now in force between your country and ours.

We trust the above suggestions and alterations will be found acceptable.

Yours faithfully

 

Adam Smith

Corporate Section

Letter XI

2 December 2000

Mr A. Fisher

The Chief Engineer

The Metal-Working Plant

25, Queen Victoria Street

London

England

Dear Mr Fisher,

This is to inform you that the Ministry of Industries of Russia has announced tenders for the construction of an iron and steel complex in Samara.

Tenders are invited for carrying out design works, construction of the project and training of local personnel for the operation of the plant.

We have gained experience in the "turn-key" construction of similar projects and are interested in participating in the tenders.

As you certainly know the implementation of such large-scale projects requires the solution of a number of technical, organizational and financial matters and is carried out successfully if projects are built jointly by several companies.

Hence, we suggest you consider the possibility of our joint participation in the above tenders.

Should you be interested in our proposal, we are ready to prepare a draft Agreement on the establishment of a consortium and to arrange talks on signing it at any time convenient for you. We shall also be able to discuss the preparation of a joint of a tender and engagement of a local agency firm to render us assistance in the tenders. The bidding deadline is set on 5th August, this year.

 

The tender documents will be sent to you on receiving your positive reply.

Yours faithfully

for V/O Prommashexport

(N.Petrov)

 

Letter XII

3 March 2000

Mr F. Spares

The Director

The Instrumental Plant

64, Darwin Road

Liverpool

England

Dear Mr Spares,

In confirmation of our cable of February 15, this year, this is to inform you that the government of our country has invited tenders for the execution of design works, delivery of equipment and construction of transformer substations. We believe that the participation in the tenders will be of interest to you.

 

We ask you to study the tender documents enclosed herewith. As it is specified in the Agency agreement the expenses on the purchase of the tender documents shall be charged to your account.

 

It must be noted that the bidding deadline is set for May 21, this year. We are to receive your bid ten days before the closing date to enable you to do the local formalities and to submit your bid to the tender committee.

We inform you that to win the tender it is desirable that you should grant a commercial credit for a period of 7-10 years at no more than 6% interest a year.

We hope you will be interested in this line of business.

 

Yours faithfully

 

Miss Lemon

 

The Secretary

Letter XIII

5 December 2000

Mr Reed

Export Manager

London Metal Words Ltd.

37, Minsing Lain Street

London

England

Dear Mr Reed,

This is to inform you that we are completing the fulfilment of contractual obligations under our contract for the construction of the power station in your country and are making arrangements for taking back to Russia part of the building equipment and unused materials brought to your country on a re-exportation basis.

As you know it is now standard practice to sell building equipment and unused materials in the country of the Customer upon completion of the works executed on a "turn-key" basis. We also intend to sell part of the equipment and materials in your country. Since you have expressed your intention to have a first option in purchasing our building equipment, we are sending you a list of the equipment and materials which we would like to sell in your country.

All the equipment is serviceable and will be sold with a standard set of spare parts. The equipment will be sold at reasonable prices with allowance made for depreciation of the equipment.

The prices do not include import duties, which should be paid by the Buyer of the equipment in compliance with the customs regulations in force in your country.

The inspection of the equipment and materials can be made at any time convenient for you.

Yours faithfully

Mr Belov

The Manager Director

Letter XIV

10 August 2000

Mr Simpson

Simpson and Co Plc,

5, Green Road

London

England

Dear Mr Simpson,

We are pleased to receive your letter of 15 June suggesting that we might be interested in representing you.

We are willing to sell your products throughout this country on the basis outlined in your letter, and have asked one of our directors Mr Ivanov to call on you, as he will be in England in five day's time.

You will no doubt be drawing up an agreement and we suggest the inclusion of the following points, which have already been agreed:

a) we operate as Sole Agents for a period of three years, after which period the contract to be renewed annually;

b) a commission of 5.5% to be paid on all sales, whether from us or direct from customers;

c) monthly account of sales to be kept and sent to you, we will accept your quarterly drafts for the net amount;

d) we agree not to handle any imported competitive machines;

e) all advertising expenditure for the first year to be refunded by you, thereafter to be divided equally between us.

Regarding point (e) above we think that it is fair to ask you to pay for the first year's advertising as sales will be small until your products are known. Mr Ivanov would like to talk over with you the best way to set about it, while at the same time you can advise him how much you wish to spend on this item in the first year.

Yours faithfully

 

Mr Pavlov

The Advertising Manager

 

Letter XV

26 November 2000

Mr Johanson

The Brush Group Plc

10, Duke Street

London, S.W.F.

England

Dear Mr Johanson,

With reference to the talks held in Moscow in July, this year, between your Mr Brown and Mr Howard, Commercial Director of our enterprise, we are pleased to confirm our readiness to act as your Agents for the sale of your equipment in this country.

Before you send us your draft Agency agreement we would like to re-state the main points of the agreement reached in Moscow, namely:

1. We undertake to operate as your Sole Agents for a period of three years from the date of agreement.

2. We shall receive a commission of 10% of all sales of your equipment on the contractual territory.

3. You will send us the first lot of your equipment on consignment for a period of 12 months and let us have publicity material (brochures, catalogues, samples, working models, films) to arrange a publicity campaign. On our part we shall open show rooms in our town and place advertising material in our journals and magazines.

4. We undertake to present quartely sales accounts. Quartely payments for the sales will be made by an irrevocable letter of credit against our invoices.

We believe the agreement will be mutually beneficial and open up ways for further cooperation.

 

Yours faithfully

 

Mr Woodman

Chief Executive

Letter XVI

18 December, 2002

Mr J. Williams

The Chief Accountant

Machinery-building Plant

10, Camden Road

London EC1 6JJ

England

Dear MrWilliams,

Having carefully studied your comments on our Draft Contract for the construction of the thermal power station on a "turn-key" basis, we would like to draw your attention to the following points of your comments on the clause "Terms of Payment":

1. Credit part of contract price.

We are puzzled to learn that you suggest making payments of the credit part of the contract price in accordance with a schedule of payments. The proposed method of payment contradicts the terms and conditions of the Intergovernmental agreement, providing for making out invoices following deliveries of equipment and materials and under which the date of the utilization of the credit is the date of shipment, stated in the shipping documents.

2. Payments in local and hard currencies.

We agree that payments for the customs clearance, delivery of equipment and materials to the construction site, execution of civil and erection works, insurance of the works and buildings, etc. will be made in accordance with a schedule of civil and erection works, however, we believe that the amounts of monthly payments during the first year of construction should be increased and adjusted to the volumes of work planned to be executed.

As to the payments in hard currency, we share your point of view that they will not be considerable and agree to receive them in the currency suggested by you.

Considering the above we ask you to reconsider your view on the clause "Terms of Payment" taking into account our draft contract and the present letter.

Awaiting your early reply, we remain.

Yours faithfully

 

J. Hutton

Sales Manager

Letter XVII

5 November 2000

Mr Peter Long

The Advertising Manager

Jakarta Motors Ltd.

58, Jalan Thamrin

Jakarta

Dear Mr Peter Long,

We have pleasure in informing you of the opening of our new plant to produce motors.

You will find that our modern production techniques have resulted in our being able to offer motors at a considerably lower price than our competitors and we trust that you will take advantage of this opportunity to offer your customers these first-class motors.

An illustrated catalogue, price-list and order form are enclosed for your convenience.

Increased demand for our motors during 1999 with the resultant pressure on our production capacity led to delay and some inconvenience to all concerned.

We decided to rectify that situation and have now opened a new plant at Tver which will mean greater facility in the production of large bulk orders and greater speed in filling your requirements.

We look forward to receiving your future orders knowing that we

can offer a better service.

Yours sincerely,

Mr S. Basukin

Chief Manager

Letter XVIII

10 Oсtober 2000

Mr Sedov

The Director

V/O Stankoimport

Foreign Trade

Association

34/65 ul.Obrucheva

Moscow 117839,

Russia

Mr Sedov,

We have devoted ourselves for many years to Foreign Trade transactions, and at present we are trying to enlarge our activities with your country.

Our main interests are Raw Materials and Manufactured Products and we have specialized lines in chemicals, oils and fats, general food products and textiles.

We are both willing to import those items which could be more or less related with one of those groups, and export from the United States the products which may be more important to the present economic status of your country.

We should be very happy to learn about the items in which you are interested, in order to start a good and profitable relationship between ourselves. We have in mind a trip to your country soon, and we should like to have good commercial connections to work things out in the best possible way for the benefit of both sides.

We are looking forward with much interest to hearing from you soon.

 

Yours faithfully

 

J. Hudson

Export Manager

"Brown and Co.Ltd"

 

Letter XIX

10 March 2000

Mr Brown

The Director

Brown and Co.

Chemical Plant

34, High Street

London, E.C.B.

England

Dear Mr Brown,

We have received your letter of March 2, this year, with the request to deliver equipment for a chemical plant.

We have considered your request and write to inform you that we are ready to conduct negotiations on this problem. At the same time we would like to draw your attention to the fact that our objedinenije sells licences on know-how which go along with deliveries of complete equipment.

As you know these lines of cooperation are widely used all over the world. In the agreement on the transfer of know-how we guarantee additional profit for a license and the output of produce of high quality, i.e. in accordance with technical specifications.

If you find our offer of some interest we shall prepare materials for patenting (description, drawings) the equipment taking into account the requirements of your patent office.

Awaiting your reply.

Yours faithfully

John Liverstone

Executive director