TERMINATION FOR THE SUBCONTRACTOR’S DEFAULT
- If the SUBCONTRACTOR:
- fails to proceed with the Subcontract Works or a part thereof with due diligence;
- except for the reasons set forth in Clause 24, fails, refuses or is unable, at any time to execute the Subcontract Works or part thereof or to perform any of its other obligations in accordance with the Subcontract or to provide ample Materials, Plant, SUBCONTRACTOR’s Equipment, tools and consumables, services or workers to execute the Subcontract Works at the rate deemed sufficient by the CONTRACTOR to reasonably assure that the SUBCONTRACTOR will complete the Subcontract Works within the Time for Completion;
- refuses or neglects to remove defective Materials, Plant, SUBCONTRACTOR’s Equipment, tools and consumables, or to make good defective works for which the SUBCONTRACTOR is responsible under the Subcontract;
- has assigned, transferred or sub-subcontracted any part of the Subcontract or any right or interest herein in breach of Clause 25.1;
- fails to proceed in accordance with the Schedule;
- fails to comply with Clause 19.4 and Clause 32.6;
- fails to promptly pay for Materials, Plant, SUBCONTRACTOR’s Equipment, tools and consumables, workers or any portion of the Subcontract Works or persistently disregards laws, ordinances or instructions of the CONTRACTOR; or
- declares bankruptcy or enters into a deed of arrangement with its creditors or receivership, goes into liquidation, or more generally becomes insolvent,
(each of which events shall be a SUBCONTRACTOR Default Event)
then, in any such event, and if the SUBCONTRACTOR fails to remedy the failure within seven (7) Days from receipt of the CONTRACTOR’s notice to that effect (except for in case of paragraph h) of this Clause 16.1), the CONTRACTOR shall be entitled to forthwith take over the Subcontract Works or part thereof, expel the SUBCONTRACTOR therefrom and terminate the Subcontract or a part thereof without need for legal proceedings or a court decision and without thereby releasing the SUBCONTRACTOR from any of its obligations or liabilities under the Subcontract or affecting the rights and powers conferred on the CONTRACTOR by the Subcontract.
On the day on which termination under this Clause 16.1 becomes effective, the CONTRACTOR shall retain all amounts which are then due and payable to the SUBCONTRACTOR. The CONTRACTOR shall be entitled to retain and use, at no expense to the CONTRACTOR, the SUBCONTRACTOR’s Materials, Plant, SUBCONTRACTOR’s Equipment, tools and consumables or other facilities to complete the Subcontract Works and/or may employ any other subcontractor to complete the Subcontract Works.
- For the avoidance of doubt termination of the SUBCONTRACTOR’s employment shall not affect the requirement to maintain the On Demand Bonds which, other than as expressly provided in the Subcontract, the SUBCONTRACTOR shall maintain until such time as the SUBCONTRACTOR has no further obligations and/or liabilities under the Subcontract, following which (and subject to there being no outstanding claims on it) the On Demand Bonds shall be returned to the SUBCONTRACTOR within fourteen (14) Days of the SUBCONTRACTOR’s request.
- In the event of termination for a SUBCONTRACTOR Default Event, the SUBCONTRACTOR shall be liable for and the CONTRACTOR shall be entitled to offset against any monies otherwise becoming due to the SUBCONTRACTOR under this Subcontract, the amount of any costs, losses, damages and expenses which have been incurred by reason of any breach of or failure to observe any of the provisions of the Subcontract by the SUBCONTRACTOR or on account of any liability attached to the CONTRACTOR by reason of any action or inaction of the SUBCONTRACTOR which results in such liability being attached to the CONTRACTOR. If the amount due by the SUBCONTRACTOR in accordance with the above exceeds the amount retained by the CONTRACTOR, the SUBCONTRACTOR shall pay the balance to the CONTRACTOR within fifteen (15) Days of the CONTRACTOR’s request for such payment. The SUBCONTRACTOR’s delayed payment shall bear interest at standard annual rate of the CONTRACTOR’s country plus five percent (5%). Without prejudice to the foregoing, In the event of termination for a SUBCONTRACTOR Default Event, the CONTRACTOR shall be entitled to call on the On Demand Bonds in such amount as it estimates, in good faith, to be the amount for which the SUBCONTRACTOR has or will have a liability to the CONTRACTOR as a result of termination.