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May 08, 1971
RICE LOAN AGREEMENT BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE REPUBLIC OF CHINA
Note: This Agreement entered into force May 8, 1971.KNOW ALL MEN BY THESE PRESENTS: WHEREAS, the Government of the Republic of China and the Government of the Republic of the Philippines, in the spirit of the friendly relations and cooperation between their countries, have a common desire to enhance the prosperity and stability of their countries and the area;
Reference: This Agreement is also published in X DFA TS No. 1, p. 33.
WHEREAS, both Governments recognize the validity of a regional approach in the solution of the problem of temporary shortage in supply of the staple cereal in a country within the region;
WHEREAS, the Government of the Republic of China, cognizant of the rice problems presently confronting the Republic of the Philippines as a result of several destructive typhoons that visited the Philippines last year, hereby voluntarily offers to extend a Rice Loan for stabilization purposes to alleviate the situation, to be repaid over a ten-year period in the form of rice;
WHEREAS, the Government of the Republic of the Philippines is grateful for the offer so generously extended by her neighbor, the Government of the Republic of China, and desires to accept this offer;
NOW THEREEORE, the undersigned representatives of both Govern-ments hereby agree as follows:
The Government of the Republic of China (hereinafter referred to as the "LENDER") hereby agrees to supply FIFTY THOUSAND (50,000) metric tons of Milled Rice to the Government of the Republic of the Philippines (hereinafter referred to as the "BORROWER") in accordance with the following terms and conditions;
1. Commodity:
Milled Taiwan Tsai Lai Rice, first (July/August) crop of 1970, of the specifications as follows:
a) Milling degree: about 90 percent equivalent to the standard sample submitted by the Taiwan Food Bureau;
b) Broken kernels: 25 percent Maximum;
c) Moisture: 14 percent Maximum;
d) Yellow and/or damaged kernels: 2 percent Maximum;
e) Chalky kernels: 5 percent Maximum;
f) Foreign matters: 0.5 percent Maximum; and
g) Other varieties: 5 percent Maximum.
2. The rice shall be in good condition, freshly milled, and free from infestation at the time of shipment.
3. Quantity:
50,000 M/T (Fifty Thousand Metric Tons Net)
4. Packing:
To be packed in new, sound bags of 50 kilograms net capacity.
5. Delivery:
a) Shipments shall be effected on the basis of FOB Keelung stowed;
b)The "BORROWER" shall charter vessels and submit to the "LENDER" a full detailed and acceptable shipping schedule not later than 10 days after the effectiveness of this agreement.
c) The first shipment shall be commenced within 15 days after the receipt of acceptable standby letter of credit in accordance with Item 3 of Article II, and the last shipment shall not be later than July 30, 1971;
d)The "BORROWER" shall advise the name of ETA Keelung of each vessel to the "LENDER" by cable at least 7 days ahead of the proposed shipment;
e) Loading term: Customary Quick Despatch (C.O.D.), understood to be about 200 M/T per Hatch per Weather Working Day, Sundays, Holidays excepted, unless used, and total loading rate shall be about 1,000 M/T per Weather Working Day. There will be no demurrage and despatch;
f) Partial shipments shall be allowed;
g) Dunnage, P.V.C. cloth, Strawmats and Wooden Ventilator etc., shall be for ship's owner or BORROWER'S Account;
k) Tally men shall be hired by the Ship's owner or by the "BORROWER" and shall be for their account;
i) For ship's quick despatch, overtime work and the relevant charges shall be paid by the Ship's owner or by the "BORROWER";
j) If the "BORROWER" fails to charter vessels and effect shipments within the period specified hereinabove, the "LENDER" is at liberty to deliver and stow the rice at Keeking Harbor Bureau's warehouse and shall be considered completed or fulfilled the DELIVERY as evidenced by the said warehouse's receipt or certificate. Any excess warehouse expenses and losses incurred after the shipping deadline shall be for the account of the "BORROWER" and at their risk;
k) "LENDER" shall sew all bags damaged during loading with jute twine and replace all badly damaged bags.
6. Inspection:
The rice shall be inspected prior to delivery by an internationally recognized superintendence agency appointed by the "BORROWER" and acceptable to the "LENDER", to determine whether or not they conform to the quantity, quality and packing as stipulated herein. Upon the effectiveness of this agreement, the "BORROWER" shall appoint the said inspector and notify the "LENDER" of such appointment in writing. Such appointed inspector's certificate of weight, quality and packing issued at loading port (Keelung Harbor Bureau's warehouse if required by the "LENDER" in accordance with Item 4-(j) of Article I) shall be final. Inspection fee shall be for the account of the "LENDER". The inspector shall issue complete reports on quality and quantity of the rice delivered on completion of the loading. The "LENDER" shall be furnished with ten copies of such reports.
7. Insurance:
Insurance shall be taken out by the "BORROWER" and at their expenses, and shall include theft, pilferage and nondelivery (TPND) risk and a warehouse-to-warehouse clause.
REPAYMENT BYTHE REPUBLIC OF THE PHILIPPINES
The Government of the Republic of the Philippines, in consideration of the rice loan extended by the Government of the Republic of China, hereby agrees to repay this loan in accordance with the following terms and conditions:
1. Commodity:
At least the equivalent of milled Taiwan Tsai Lai Rice of the following specifications:
a) Milling degree: About 90 percent equivalent to the standard sample submitted by the Government of the Republic of the Philippines;
b) Broken kernels: 25 percent Maximum;
c) Moisture: 14 percent Maximum;
d) Yellow and/or damaged kernels: 2 percent Maximum;
e) Chalky kernels: 5 percent Maximum;
f) Foreign matters: 0.5 percent Maximum; and
g) Other varieties: 5 percent Maximum'.
The rice shall be in good condition, freshly milled and free from infestation at the time of shipment.
The quality of the rice to be repaid by the "BORROWER" shall be subject to final acceptance by the "LENDER".
In the event the rice offered by the "BORROWER" in repayment is of lesser or better quality than milled Taiwan Tsai Lai Rice, based on the specifications contained in this section, the "LENDER" and the "BORROWER" shall agree on the quantities, quality and grades of such rice to be used as repayment.
2. Quantity:
Fifty thousand (50,000) metric tons net of rice equivalent to milled Taiwan Tsai Lai Rice, or more or less depending on the application of the provisions of the immediately preceding paragraph.
In addition, interest in the form of milled rice shall also be repaid as specified in Item 3 herein below.
3. Terms of Repayment and Guarantee:
The total quantity comprising the shipments shall be payable, in equivalent quantity, grade and quality of rice, C.I.F. Taiwan, over a period of ten (10) years, at 7.5 percent interest or increment per annum, with a grace period of three (3) years counted from the date of last loading to complete 50,000 metric tons, in seven (7) equal annual installments, together with interest earned during the period immediately preceding the due of each installment. The first installment shall be due within the one-year period following the expiration of the three-year grace period.
For purposes of the preceding paragraph, it is understood that interest or increment during and immediately after the three-year grace period shall be repaid within one year from the close of such grace period.
It is understood that the "BORROWER" shall have the option to repay, without penalty, any and all amounts due to the "LENDER" under this agreement.
The "BORROWER" shall provide security or guaranty for the payment of the above obligations in the form as follows:
a) An irrevocable, divisible and assignable standby letter of credit shall be opened by the Philippine National Bank within 5 days after the effectiveness of this agreement, acceptable to the Central Bank of China.
Said L/C shall be up to the aggregate amount of US$10,000,635.75 (each US$130.77) sufficient to cover the procurement of the same quantity of rice (including interest) with equivalent quality delivered to the "BORROWER" by the "LENDER" and all the relevant expenses, charges incurred which may be advanced by the "LENDER" for the account of the "BORROWER" under this agreement.
The issuing bank of said L/C must engage themselves to pay immediately to the "LENDER" without recourse the full amount or portion thereof pro rata to the amount of default of agreement, upon receipt of "LENDER's" written statement certifying that "BORROWER" has failed to fulfill the above contractual obligations at any installments, accompanied by LENDER'S simple receipt or sight draft (s) drawn on issuing bank.
In case the amount of the said L/C is not sufficient to cover the said procurement, the "BORROWER" will unconditionally increase the L/C's amount as required by the "LENDER". Said L/C will expire on December 31, 1982. In case any claim is not settled before its expiration, the validity of L/C shall be automatically extended until any or all claims have been fully settled.
b) Other security or guaranty, if any, as may be additionally required by the "LENDER".
4. Delivery:
a) Shipments shall be effected on the basis of CIF Keelung and properly stowed away on warehouse at the unloading port, and for the account of the "BORROWER".
b) The "BORROWER" shall charter vessel for its own account and shall inform the "LENDER" of a full and acceptable shipping schedule based on the schedule of deliveries hereinafter specified.
c) The schedule of shipments under the terms of this Article II shall be as follows:
On or before January 31, 1975 January 31, 1976 January 31, 1977 January 31, 1978 January 31, 1979 January 31, 1980 January 31, 1981 Total
The "BORRO WE R" shall be advised the same and ETA Keelung of each vessel to the "LEXDER" by cable, at least seven (7) days in advance of shipment.
d) Partial shipments shall be allowed.
e) Dunnage, P.V.C. cloth, Strawmats and Wooden Ventilator, etc., shall be for Shipowner's or "BORROWER'S" account.
f) Tally men shall be hired by Shipowner or "BORROWER" and for their account.
g) For ship's quick dspatch, overtime work and the relevant labor charges shall be paid by Shipowner or "BORROWER".
h) "BORROWER" shall sew all bags damaged during loading and unloading with jute twine and replace all badly damaged bags.
5. Packing:
To be packed in new, sound polypropylene bags of 50 kilograms net capacity.
6. Inspection:
The rice shall be inspected prior to delivery and after stowed away on warehouse at the unloading port by an internationally recognized superintendence agency appointed by the "LENDER" and acceptable to the "BORROWER", to determine whether or not they conform to the quantity, quality and packing as stipulated therein. Within three years after the effectiveness of this agreement, the "LENDER" shall appoint the said inspector and notify the "BORROWER" of such appointment in writing. Such appointed inspector's certificate of quality and packing issued at loading port shall be final but the final inspection for quantity shall be based on the certificate of quantity issued on warehouse at the unloading port by said inspector. Inspection fee shall be for the account of the "BORROWER". The inspector shall issue complete report on quality and packing of the rice delivered on completion of the loading and reports of quantity' on completion of stowing at unloading port's warehouse. The "BORROWER" shall be furnished with ten (10) copies of such reports.
7. Insurance:
Insurance shall be taken out by the "BORROWER" and at its expense, and shall include theft, pilferage and non-delivery (TPND) risks and a warehouse-to-warehouse clause.
MISCELLANEOUS PROVISIONS
1. Arbitration:
Any claims arising in respect of any shipment made under this agreement shall be settled between the signatories to this agreement. In the event the claims cannot be amicably settled between the parties such claim shall be settled in Taipei by arbitration, through the two arbitrators, one of whom shall be appointed by the "LENDER" and one arbitrator by the "BORROWER". In case either party fails to make this appointment within thirty (30) days after being called upon to do so by the other party, the arbitrator appointed by such other party shall act as sole arbitrator as though appointed by the consent of both parties, and the arbitration shall be held and shall proved accordingly. In case both parties appointed an arbitrator, but both arbitrators fail to agree, they shall both agree on a third arbitrator and the arbitration shall be held and shall proceed accordingly. 2. Force Majeure:
Nondelivery of all or any part of the rice caused by war, blockade, evolution, insurrections, riots, mobilization, strikes, lock-outs, Acts of God, plague or other epidemic, destruction of goods by fire or flood, or any other causes beyond control of the "LENDER" shall constitute as a cancellation or extension of this agreement to the extent of such nondelivery.
3. Effectiveness:
The present Agreement, drawn up in duplicate in English, shall enter into force on the date of signature.
IN WITNESS WHEREOF, the representatives of the two GOVERNMENTS have signed the present Agreement.
DONE at Manila, Philippines, this 8th day of May of the year one thousand nine hundred and seventy-one.
For and on behalf of the
(Sgd.) J.D. DRILON, JR.
(Sgd.) CESAR A. VIRATA
(Sgd.) MATEO DE DIOS