Agreement
for Sale of a Ship

AGREEMENT
is made at ……. this …….. day of ……… between M/s. AB & Co.
Ltd., a company registered under the companies Act, 1956, having its registered
office at …………….. hereinafter referred to as ‘the Owner’ of the One
Part and M/s. XYZ & Co. Ltd., a company registered under the said Act and
having its registered office at ………. hereinafter referred to as the ‘Purchaser
of the Other Part.

WHEREAS

1.     The owner owns a
seagoing ship of the class of ……… built at ……… having a registered
tonnage and other particulars, which are given in the Schedule hereunder
written.

2.     The owner has agreed
to sell to the purchaser the said ship on the following terms and conditions.

NOW
IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:

1.     The owner agrees to
sell and the Purchaser agrees to buy the said ship more particularly described
in the schedule hereunder written, fully equipped with all necessary parts
together with everything belongings to her on abroad and shore and including
wireless and electronic installations and nautical instruments, at the price of
Rs. …….. out of which a sum of Rs. ……. has been paid by the purchaser
to the owner on the execution of this agreement as earnest and in part payment
of the said price (receipt whereof the owner hereby admits) and the balance
will be paid against delivery of possession of the said ship as hereinafter
stated.

2.     The sale shall be
completed on the ……. day of …… time being essence of the contract.

3.     The owner shall give
all facilities to the purchaser to inspect the said ship at the port of
delivery namely ………… provided that the inspection shall be without any
opening up of any part thereof and without putting the owners to any costs.
During inspection the owner shall make available to the purchaser the log book
for the voyage and the deck and all other document and papers relating to the
said ship.

4.     The owner shall also
allow to the purchaser inspection of the bottom of the ship and of those parts
thereof which are under the water level and if so required by the purchaser the
owner shall arrange to place the said ship in a dry dock at the port of
delivery. If the rudder, propeller, bottom and other parts of the ship under
water are found damaged or defective the owner shall make good the damage or
defects at its costs and to the satisfaction of the purchaser so as to obtain a
clear certificate of class. Whilst the ship will be kept in the dry dock the
owner will arrange to cause the tackle and the shaft drawn should the same be
condemned or found defective so as to affect the ship’s clean certificate of
class and it shall be renewed or made good at the owner’s expenses to the
satisfaction of the purchaser or his authorized representative. The cost of
putting the ship in the dry dock will be borne by the owner if any parts are
found damaged or defective otherwise the costs will be borne by the purchaser.

5.     The Owner shall
satisfy the purchaser that the said ship is not mortgaged or there are no other
encumbrances thereon whatsoever and that the ship is registered in the name of
the owner only and there is no other sharer therein.

6.     The ship will be sold
along with the provisions, bunkers, unused oil and other stores on the said
ship lying and so also the spare parts, space equipment including spare tackle
and shaft, spare propellers belonging to the ship whether on the ship or
outside and existing at the time of inspection by the purchaser but the costs
of the said articles and things above referred to in this clause will be paid
by the purchaser separately and at the market rate.

7.     After the ship is
inspected and the purchaser is satisfied with the condition of the ship and as
well as to the title of the owner free from encumbrances and claims as provided
above the sale shall be completed.

8.     The sale shall be
completed on the purchaser paying the balance of the price as aforesaid and
other charges as provided in clause 6 above by a Bank draft and the owner
handing over possession of the said ship to the purchaser on ‘as is where is
basis’.

9.     On delivery of
possession of the ship the owner shall get the registration of the ship in his
name deleted from the ship register and deliver a certificate of such deletion
to the purchaser. The owner shall also deliver the certificates for the hire,
engine, anchor, and other parts as well as the log books and plans relating to
the ship in the possession of the owner.

10.  The owner hereby
covenants that the said ship is free from any encumbrances and claims and
agrees to indemnify and keep indemnified the purchaser against all claims to
the said ship, and all loss, damages, costs, charges and expense that may be
incurred or suffered by the purchaser on account of such claims.

11.  Until completion of
sale as aforesaid, the ship shall be at the risk of the owner.

12.  This agreement is
subject to the approval of the Govt. of India for the transfer of the ship by
the owner to the purchaser and for which approval the owner shall apply to the
Govt. within two weeks from the date hereof and the owner shall furnish all
information as may be required by the Govt. for such approval. If the Govt.
refuses to grant the approval for transfer this agreement shall stand cancelled
and in that event the owner shall return the earnest money forthwith to the purchaser
and each party shall pay its costs of and incidental to this agreement.

13.  If on inspection of
the ship the purchaser is not satisfied with the condition thereof or if the
title of the said owner to the said ship is not clear and absolute or if there
is any encumbrance on the said ship or if there is prohibition found against
transfer of the ship under the rules or policy of the Govt. or if the owner
fails to complete the sale in spite of the purchaser’s readiness to complete
the same, the purchaser shall be entitled to cancel this agreement by fifteen
days notice and on such cancellation the owner shall return the earnest money
to the purchaser forthwith and until such return it will carry interest at the
rate of Rs. …. Percent per annum till payment and will be a charge on the
said ship.

14.  If the purchaser
fails to complete the sale, without any of the reasons aforesaid, the owner
will be entitled to cancel this agreement by fifteen days notice and on such
cancellation the earnest money paid by the purchaser will stand forfeited to
the owner.

15.  Subject to what is
herein otherwise provided, the cost of stamp duty if any and other out of
pocket expenses of and incidental to this agreement will be borne by the
parties in equal shares, each party bearing the cost of its legal advisor.

16.  In the event of any
dispute arising between the parties hereto and of whatsoever nature relating to
this agreement, the same will be referred to the arbitration of two
arbitrators, one to be appointed by each party hereto and the arbitration will
be governed by the Arbitration Act, 1940.

THE SCHEDULE ABOVE
REFERRED TO:

Signed
and Delivered for the )

withinnamed
Owner AB & Co. Ltd. )

by
its Managing Director, Mr. ……)

duly
authorized by Board of )

Directors
resolution dated ……. )

in
the presence of …… )

Signed
and Delivered for the )

withinnamed
Purchaser XYZ & Co. )

Ltd.
by its Managing Director )

Mr.
….. duly authorized by Board of )

Directors
resolution dated ……. )

in
the presence of …… )

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