Arbitration Deed of Agreement

DEED OF AGREEMENT

Date: 4th June 2009Location: Mizoram, India

Parties Involved

First Party:

• Name: Zoram Industrial Development Corporation Limited (ZIDCO)

• Address: Tuikual A, J.Lalhmingliana Building, Aizawl - 796 001, Mizoram

• Representative: Shri Zohmangaiha, Chairman/Managing Director.

Second Party:

• Name: M/s Ravi Gulgulia

• Address: 11 Mile Moushmai, Jorabat/Ri-bhoi, Meghalaya

• Representative: Shri Ravi Gulgulia, Proprietor.

Background and Agreement Purpose

• Coal Distribution Policy: A newly established framework from the Ministry of Coal, Government of India, aimed at efficiently distributing coal to various states based on need and entitlement.

• Government of Mizoram Intent: Committed to leveraging the state's coal quota, the intent is to ensure that efficient procurement and management of coal resources occur through ZIDCO.

Agreement Purpose

• The goal of this agreement is for ZIDCO to act as a facilitator for coal procurement via its exclusive handling agent, M/s Ravi Gulgulia, streamlining the procurement process while ensuring compliance to meet regulatory requirements and maximize resource utilization.

Key Responsibilities of Parties

First Party Obligations

• Necessary Consents: ZIDCO is tasked with securing all relevant official consents and approvals necessary for coal procurement, ensuring adherence to regulations and maintaining operational integrity.

• Approvals: ZIDCO must provide all requisite approvals to the Second Party, ensuring smooth execution of procurement duties without undue delays.

• Exclusivity: ZIDCO shall guarantee that no other agreements are established with alternative agents regarding similar procurement services throughout the duration of this contract.

Second Party Responsibilities

• Financial Requirements:

  • Security Deposit: The Second Party must secure a bank guarantee corresponding to the allocated coal quota, reinforcing financial commitment towards the procurement.

• Non-Release Policy: In the event that ZIDCO fails to release the security deposit within a stipulated period of 30 days, the Second Party possesses the right to cancel the guarantee and seek compensation for any resultant disputes with M/s Coal India Limited.

Procurement and Disposal of Coal

• Procurement Framework:

  • The Second Party will be responsible for the comprehensive handling of coal, which includes defined procedures for the timely lifting and transportation of coal sourced from Coal India Ltd.

• Open Market Sales:

  • Procedures for sales to the open market are outlined, mandating that proper notification is provided to the First Party regarding sales activities and procedures for unsold stock management are clearly defined.

• Sales Regulations: The agreement includes a strict policy preventing sales to entities within Mizoram unless proper notification has been duly made and acknowledged.

Compliance and Storage Details

• Regulatory Compliance:

  • All parties must ensure adherence to relevant laws, regulations, and standards that govern coal procurement, handling, and sales processes.

• Storage Arrangements:

  • The Second Party is required to establish adequate storage facilities in proximity to coal companies to enhance operational efficiency, thereby mitigating risks associated with transportation delays and ensuring timely availability of coal.

Financial Transactions

• Delivery Terms:

  • All financial transactions related to coal procurement will occur on a pre-payment basis, determined by a transparent pricing mechanism based on derived rates.

• Transport and Handling Charges:

  • A comprehensive outline of settlement policies will be presented to cover transportation costs, handling fees, and the obligations of buyers in fulfilling these costs as agreed upon in this contract.

Pricing and Costing Structures

• Pricing Agreement:

  • Delivery Price Calculation: A detailed formula for calculating delivery prices will be defined, encompassing all associated costs including logistics and handling fees.

  • Sales Price Calculation: A distinct formula for determining sales prices will be established, factoring in all market conditions, competition, demand, and fluctuations in associated costs.

Rights to Inspect

• Inspection Rights: ZIDCO reserves the right to conduct inspections of depots operated by the Second Party and may request relevant documentation to ensure compliance and operational transparency.

Contract Term and Renewal

• Contract Duration: The duration of this contract is directly tied to the validity of the "Fuel Supply Agreement," including a built-in clause that allows for extension or renewal based on specific conditions.

• Security Payments Post-Termination: Detailed provisions outlining payments due upon termination of the agreement, in the event of non-renewal of the Fuel Supply Agreement, ensuring financial obligations are met.

Force Majeure Clause

• Definition: This clause addresses unforeseen events beyond the control of either party that could impact the fulfillment of their contractual obligations, with examples such as natural disasters, war, and governmental actions provided for clarity.

Termination Conditions

• Conditions for Termination: Clearly specified events that could lead to the termination of this agreement are laid out, including defaults or failures to meet obligations, with outlined responsibilities post-termination to ensure a smooth transition.

Mutual Responsibilities and Claims

• Clauses elaborating on the responsibilities of both parties in the case of mutual agreement upon claims for damages or losses that arise post-termination, ensuring fairness and accountability.

Waivers and Consents

• Waiver Conditions: Specific conditions under which waivers may apply are presented, clarifying that such waivers do not impact the overall validity of the agreement should any provision be deemed invalid.

Invalid Provisions

• Provision Handling: Established procedures for addressing any invalid or unenforceable clauses within the agreement to ensure that the remainder of the document remains intact and enforceable as intended.

Governing Law and Arbitration

• Legal jurisdiction governing this agreement is established, including specified methods through which any disputes arising may be resolved, whether through arbitration, mediation, or legal proceedings.

Final Reminders

• Document Execution: This agreement will be officially executed, with all necessary copies distributed to both parties, including provision for witness signatures to validate the contract formally.