Treaty Room - Treaty
Project No: IND-118
ISTISNA'A AGREEMENT
BETWEEN
THE
GOVERNMENT OF THE
REPUBLIC OF INDONESIA
AND
ISLAMIC DEVELOPMENT BANK
CONCERNING
THE DEVELOPMENT AND UPGRADING OF ISLAMIC UNIVERSITY OF
ALAUDDIN MAKASSAR PROJECT IN INDONES lA
D:\FAgns\lstisna'a\IND-118(1ST).nf-mr- IO/ln006 3:29 PM
ISTISNA'A AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE ISLAMIC DEVELOPMENT BANK
THIS AGREEMENT is entered into on _!QJQ.2!1427H (corresponding to
_Q2_/_1Q_l2006G) between the Government of the Republic of Indonesia (hereinafter
refeITed to as the "Purchaser") and the Islamic Development Bank (hereinafter referred
to as the "Vendor'').
WHEREAS,
A)
The Purchaser has requested the Vendor to construct for it the Development and
Upgrading of Is lamic University of Alauddin Makassar Project described in
Annex-I to this Agreement (hereinafter referred to as the "Works") for use in the
Project described in Annex-II to this Agreement;
B)
The Vendor has agreed to construct the Works for the Purchaser for a total cost
not exceeding US$ 25,861,000/- (United States Dollars Twenty Five Million
Eight Hundred and Sixty One Thousand) (which is approximately equivalent to
ID 17,713,000/-) only for a Sale Price to be determined in accordance with the
provisions of this Agreement and which shall be paid by the Purchaser to the
Vendor in 12 (Twelve) years starting after a Gestation Period of 3 (Three) years
upon the terms and conditions set out in this Agreement.
C)
The terms and conditions referred to in Paragraph (B) hereof have been
communicated to and accepted by the Purchaser;
NOW, THEREFORE, the Vendor and the Purchaser hereby agree as follows:
Article-I
DEFINITIONS - INTERPRETATION
1.1
In this Agreement, unless the context othe1wise requires, the fo llowing terms
shall have the meaning appearing against each of them hereunder:
Agency Agreement:
The agreement of even date between the Vendor
and the Purchaser whereby the Purchaser shall act
as the Vendor's agent in selection of the Contractor
and supervision of construction of the Works.
Works:
The Works described in Annex-I hereto.
2
Capital Cost:
The total cost of the Construction of the Works
which shall include the price payable to the
Contractor under the Contract and any other costs
or expenses incurred by the Vendor in or m
connection with the Construction of the Works.
Contract:
The contract for the construction of the Works
concluded on behalf of the Vendor by the
Purchaser with the Contractor.
Contractor :
The contractor who shall be entrusted with the
construction of the Works.
Consultant:
The consultant who shall be entrusted with the
supervision of the Works to be perfonned under
the Contract as indicated in the Consultancy
Agreement.
Consultan cy Agreement:
The agreement with Consultant for the provision of
consultancy services pertaining to the Works to be
concluded by the Purchaser on behalf of the
Vendor.
Effective date of
Agreement:
The date on which the Vendor declares this
Agreement effective in accordance with ArticleXIII hereof.
Gestation Period :
The period commencing on the Date of First
Disbursement and ending 36 (Thirty Six) months
thereafter.
Islamic Dina r and "ID" :
The unit of account of the Vendor determined in
accordance with Article 4(1) of the Articles of
Agreement of the Vendor. one Islamic Dinar being
equivalent to one Special Drawing Right of the
International Monetary Fund.
Proj ect:
The project described in Annex II hereto.
Sale Price:
The Sale Price of the Works payable by the
Purchaser to the Vendor in accordance with
Article-IX hereof.
3
1.2
Tax:
Any tax, levy, impost, duty or other charge of
similar nature (including without limitation any
penalty payable in connection with any failure to
pay or delay in paying any of the same).
US Dollar and "USS'':
The lawful currency of the
America.
United States of
In this Agreement:
(a)
Unless the context otherwise requires, words denoting the singular
include the plural and vice-versa, words denoting persons include
corporations and partnerships; and references to a specified Annex,
Appendix, Article or Section is a reference to that Annex, Appendix,
Article or Section of this Agreement.
(b)
Words and expressions defined in the Agency Agreement and not
defined herein shall have the same meaning as given in the Agency
Agreement.
(c)
The Article and Section headings are inserted for convenience of
reference only and shall not be used to define, interpret or limit any of
the provisions of this Agreement.
Article-//
PREAMBLE AND ANNEXES
PART OF THE AGREEM ENT
The Preamble and the Annexes to this Agreement shall be an integral part thereof.
Article-III
CONSTRUCTION OF THE WORKS
3.1
The Vendor agrees to have the Works constructed in accordance with the terms
and conditions of this Agreement and the Purchaser agrees to take over the
Works on the terms and conditions set out in this Agreement and to pay the Sale
Price.
3.2
For the avoidance of any doubt. the Purchaser agrees that the Vendor will have
the Works constructed by the Contractor to be selected in accordance with the
relevant provisions indicated in the Agency Agreement.
3.3
The Executing Agency responsible for the implementation of the Project on
behalf of the Purchaser shall be the Ministry of Religious Affairs of the Republic
of Indonesia. The Executing Agency shall implement the Project through a
Project Management Unit (PMU) consisting of authorized personnel of the
4
Islamic Unjversity of Alauddjn Makassar, Indonesia.
Article-JV
TIME FOR COMPLETION OF THE WORKS
Subject to Articles VI and X hereof, the construction of the Works will be completed
withln 3 (Three) years from the date of the First Disbursement.
Artic/e-V
TERMINATION OF THE AGREEMENT
5.1
Subject to Section 13.2 hereof, the Pm-chaser may request the Vendor to
terminate this Agreement and cancel the Approved Amount or any part thereof
at any time before the signature of the Consultancy Agreement or the Contract.
5.2
Unless Disbursement has been made from the Approved Amount before
termination, if the Approved Amount is cancelled pursuant to Article XII hereof,
the Agreement shall deemed to be automatically terminated.
5.3
Before signature of the Consultancy Agreement or the Contract, the Vendor
may, by notice to the Purchaser, termjnate this Agreement in any of the
fo llowing cases:
(a)
Failure of the Purchaser to discharge its obligations to pay any amount
due from it to the Vendor, or to any other affiliated body of the Vendor,
under any agreement other than this Agreement;
(b)
An extraordinary situation shall have arisen which (i) shall make it, in
the opinion of the Vendor, improbable that the Purchaser would be able
to fulfil its obligations under this Agreement, or (ii) which prevents the
attainment of the purposes for which this Agreement is entered into;
(c)
A representation made by the Purchaser or any statement furnished and
intended to be relied upon by the Vendor in processing the Project for
approval or for entering into this Agreement, shall have been incomplete
or incorrect in any material respect;
The Agreement shall continue to be terminated until the event or events wruch
gave rise to such tennination shall have ceased to exist or until the Vendor shall
have notified the Purchaser that the undertaking of the Vendor to construct the
Works has been restored, whichever is earlier; provided, however, that in the
case of any such notice of restoration, the undertaking to construct the Works
shall be restored only to the extent and subject to the conditions specified in such
notice, and no such notice shall affect or impair any right, power or remedy of
the Vendor in respect of any other or subsequent event described in this Section.
5.4
Neither the Vendor nor the Purchaser shall have any further obligation to the
other from the date of cancellation of the Agreement under Section 5.1 , 5.2 or
5
5.3 of this Article, provided that such tennination shall not affect any obligation
incw-red or right accrued to any party before such tem1ination.
5.5
Notwithstanding the termination of the Agreement, the Purchaser shall continue
to co-operate and assist the Vendor in recovering from the Contractor such part
of the Contract Price and any other amount that may have been Disbursed by the
Vendor before termination of the Contract.
Article-VI
ACCEPTANCE OF THE WORKS
BY THE PURCHASER
-
The Purchaser shall be deemed to have irrevocably accepted the Works for all purposes
thereof when he signs the Final Acceptance Certificate.
Article-VII
OWNERSHIP AND RISK
The title to and the risk in the Works shall pass to the Purchaser on the signing of the
Final Acceptance Certificate.
Article-VIII
CONDITIO OF THE WORKS
8.1
8.2
Without prejudice to the foregoing, the Vendor shall not have any responsibility
or liability whatsoever to the Purchaser or any other person or entity, with
respect to:
(a)
any liability, loss or damage caused (or alleged to be caused) directly or
indirectly by the Works or by any inadequacy thereof or deficiency or
defect therein or by any other circumstances in connection therewith:
(b)
in respect of the use or operation of the Works or any risks relating
thereto;
(c)
any interruption of service. loss of business or anticipated profit or
consequential damages.
The Vendor undertakes to assign to the Purchaser the benefit of any guarantee,
condition or warranty relating to the Works which may have been given by the
Contractor to the Vendor and which had been examined and accepted by the
Purchaser and all other conditions or warranties as may be implied by law or
recognized by custom in favour of the Vendor. In addition. the Vendor shall take
such other action as the Purchaser shall reasonably request to enable the
Purchaser to claim against the Contractor.
6
Article-IX
PAYMENT OF THE SALE PRICE
9.1
The Sale Price shall be equal to the Capital Cost of the Works plus a mark-up of
5.1 % (Five point One per cent) per annum.
9.2
The Purchaser shall pay the Sale Price in 24 (Twenty Four) semi-annual
consecutive instalments, the first of which shall become due and payable 6 (Six)
months from the end of the Gestation Period. The Vendor shall send the Sale
Price Payment Schedule to the Purchaser shortly after the issue of the Final
Acceptance Certificate.
9.3
Subject to Section 9.6 hereof. each payment to be made by the Purchaser to the
Vendor hereunder shall be made in any convertible currency acceptable to the
Vendor for value on the due date to the account of the Vendor or in such other
manner as the Vendor may from time to time notify the Purchaser in writing.
9.4
Any payment due hereunder shall be deemed to have been duly paid when any of
the ｦｯ ｬ ｯｶＮｾ
ｮｧ＠
banks confirms to the Vendor the receipt of such payment in the
Vendor's account with it:
(a)
If such payment is made in U.S. Dollars:
Account No. GB 14 GULF 4053 0700 1591 11
Gulflntemational Bank B.S.C.
One Knightsbridge
London SW l X 7XS
United Kingdom
SWIFT CODE: GULFGB2L
(b)
If such payment is made in Pounds Sterling:
Account No.122432 GBP2520 01
Gulf International Bank B.S.C.
One Knightsbridge
London SW IX 7XS
United Kingdom
Telex No. 8812889/8813326 GIBANK G
SWIFT CODE: GULFGB2L
(c)
If such payment is made in EURO Currency:
Account No. 096965 00 1 51
Unjon De Banques Arabes Et Francaises (UBAF)
92523 Paris, Neuilly Cedex France
Telex No. 610334 UBAF
SWIFT CODE: UBAFRPPXXX
7
9.5
If any payment falls due hereunder on a day which is not a business day,
payment shall be made on the next following business day.
9.6
The Islamic Dinar is the unit of account for each and every sum at any time due
from the Purchaser hereunder. If for the purposes of this Agreement it is
necessary to convert any sum in Islamic Dinars into any other currency or vice
versa, the applicable rate of exchange shall be that detennined by the Vendor.
The Vendor will nonnally make such conversion on the basis of the prevailing
rate of exchange for the Special Drawing Right of the International Monetary
Fund (The IMF), as advised by the IMF, on the day on which such payment is
made.
9.7
All payments made by the Purchaser hereunder shall be made free and clear of
and without deduction of, or on account of, any tax, set-off, counter-claim or
other matter. If the Purchaser is required by law to make any deduction or
withholding from any sum payable by it hereunder, the sum payable by it in
respect of which such deduction or withholding is required to be made shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, the Vendor receives and retains (free from any
liability in respect of any such deduction or withholding) a net sum equal to the
sum which it would have received and so retained had no such deduction or
withholding been made.
Artic/e-X
REPRESENTATIONS
The Purchaser represents that:
1)
it has power to enter into this Agreement and to perform its obligations
hereunder and all action required to authorize the execution of this Agreement
and the performance by the Purchaser of its obligations hereunder has been duly
taken;
2)
the obligations expressed to be assumed by the Purchaser in this Agreement are
legal and valid obligations binding on the Purchaser in accordance with the
terms hereof;
3)
the execution of this Agreement and the Purchaser's perfonnance of its
obligations hereunder do not constitute and will not result in any breach of any
agreement, treaty or law;
4)
all acts, conditions and things (including exchange control consents) required by
the laws of Indonesia to be done, fulfilled and performed in order:
8
(i)
to enable the Purchaser lawfully to enter into and perform the obligations
expressed to be assumed by it in this Agreement;
(ii)
to ensure that the obligations expressed to be assumed by it in this
Agreement are legal, valid and enforceable; and
(iii)
to make this Agreement admissible in evidence in Indonesia without
further steps or fonnalities have been done, fulfilled and performed in
strict compliance with the laws and Constitution of Indonesia;
5)
no action or administrative proceeding of or before any court or agency which
might have a material adverse effect on the financial condition of the Purchaser
has been initiated or threatened;
6)
under the Jaws of Indonesia in force at the date hereof, the claims of the Vendor
against the Purchaser under this Agreement will rank at least pari passu with the
claims of all other unsecured creditors for any indebtedness of the Purchaser;
Article-XI
EVENTS OF DEFAULT
l I. I
11.2
If one of the events specified in this Section (events of default) shall have
happened and be continuing then the Vendor by notice to the Purchaser, may
declare the whole or part of the Sale Price to be, and the same shall thereupon
become, immediately due and payable (anything in this Agreement
notwithstanding) without any further notice:
(a)
default shall have occurred in the payment of any of the Sale Price
instalments and such default shall have continued for a period of 15
(Fifteen) days.
(b)
default [other than the default specified in (a) above] shall have occurred
in the performance of any obligation of the Purchaser under this
Agreement and any such default shall have continued for a period of 30
(Thirty) days.
(c)
any representation or warranty confirmed or made by the Purchaser in
connection with the execution and delivery of this Agreement, or in
connection with any request for disbursement under this Agreement,
shall be found to have been incorrect in any material respect and shall
continue to be incorrect for a period of 30 (111irty) days after notice
thereof shall have been given to the Purchaser by the Vendor;
(d)
any provision
unenforceable.
of this
Agreement
becomes
invalid,
illegal
or
If any Event of Default or any event which. with lapse of time or notice and
lapse of time, would become an Event of Default shall have happened, the
9
Purchaser shall immediately give the Vendor notice thereof by telex or facsimile,
specifying the nature of such Event of Default or such event and any steps the
Purchaser is taking to remedy the same.
11.3
No course of dealing and no delay in exercising, or omission to exercise, any
right, power or remedy accruing to the Vendor upon any default under this
Agreement or any other agreement shall impair any such right, power or remedy
or be construed to be a waiver thereof or an acquiescence therein; nor shall the
action of the Vendor in respect of any such default, or any acquiescence by it
therein, affect or impair any right, power or remedy of the Vendor in respect of
any other default.
Article-XII
CANCELLATION OF THE APPROVED AMOUNT
12. l
If the Contract is not signed within 180 (One Hw1dred and Eighty) days from the
Effective Date of this Agreement. the Vendor may by notice to the Pmcbaser
cancel the Approved Amount, unless it is satisfied by the Purchaser's
j ustification for such delay.
12.2
Ln the event that the Contractor fai ls to fulfil any of its obligations under the
Contract and the Pmchaser, in consultation with the Vendor, terminates the
Contract in accordance with its terms, such termination shall after 60 (Sixty)
days from such termination operate as a cancellation of any amount remaining
un-disbursed from the Approved Amow1t, unless the Vendor shall otherwise
agree.
Article-XIII
EFFECTIVENESS OF THE AGREEMENT
Th.is Agreement shall not be effective Lmless and until the Purchaser furnishes the
Vendor with Legal Opinion from the Counsel to the Purchaser substantially in the form
provided in Annex-III hereto;
Article-XIV
TERMINATION OF AGREEMENT FOR FAILURE
TO BECOME EFFECTIVE
If the Agreement shall not have entered into effect within 6 (Six) months from the date
of signature, the Agreement and all obligations of the parties thereunder shall terminate,
unJess the Vendor, after consideration of the reasons for the delay, shall establish a later
date for the purposes of this Section. The Vendor shall promptly inform the Purchaser of
such later date or the term ination of the Agreement, as the case may be.
10
/(II
Article-XV
WAIVER
Failure of the Vendor to exercise or assert any of its rights under this Agreement or its
delay in the same or its failure to exercise or assert any remedy it may have against the
Purchaser or its delay in the same, shaU not prejudice such right or remedy and shall not
be construed as a waiver of such light or remedy.
Article-XVI
GOVERNING LAW - SETTLEMENT OF DISPUTES
16.1
This Agreement shall be governed by, and be construed in accordance with
Islamic Shariah.
16.2
Any dispute between the parties to this Agreement and any claim by such party
against the other party arising w1der the Agreement which could not be settled
amkably by the parties within 60 (Sixty) days from the date of notice from one
party to the other, shall be submitted to arbitration by an Arbitral Tribunal as
hereinafter provided:
(a)
The parties to such arbitration shall be the Vendor on one side and the
Purchaser on the other side.
(b)
The Arbitral Tribunal shall consist of three arbitrators appointed as
follows:
One arbitrator shall be appointed by the Vendor, the second arbitrator
shall be appointed by the Purchaser and the third arbitrator (hereinafter
referred to as "the Referee") shall be appointed by agreement of the
parties, or if they shall not agree, by the Secretary General of the
Organization of Islamic Conference (OIC). The Referee shall be a lawyer
specialized in international finance or a banker with knowledge of
Islamic finance transactions. If either party shall fail to appoint an
arbitrator, such arbitrator shall be appointed by the Secretary General of
OIC. In case any arbitrator appointed in accordance with this Section
shall resign, die or become unable to act, a successor arbitrator shaU be
appointed in the same manner as herein prescribed for the appointment
of the original arbitrator and such successor shall have all the powers and
duties of such original arbitrator.
(c)
An arbitration proceedings may be instituted under this Section upon
notice by the party instituting such proceedings to the other party. Such
notice shall contain a statement setting forth the nature of the dispute or
claim to be submitted to arbitration, the nature of the relief sought, the
name of the arbitrator appointed by the party instituting the proceedings
11
and the name of a proposed Referee. Within 30 (Thirty) days after the
giving of such notice, the other party shall notify to the party instituting
the proceedings the name of the arbitrator appointed by such other party
and its agreement or disagreement to the appointment of the proposed
Referee.
(d)
If within 60 (Sixty) days after the giving of such notice instituting the
arbitration proceedings the parties shall not have agreed upon a Referee
or the party to whom notice of arbitration is given fails to appoint an
arbitrator, any party may request the appointment of the second arbitrator
or a Referee (as the case may be) as provided in paragraph (b) of this
Section.
(e)
The Arbitral Tribunal shall convene at such time and place as shall be
determined by the Referee. Thereafter, the Arbitral Tribunal shall
determine where and when it shall sit.
(f)
Subject to the provisions of this Section, and except as the parties shall
otherwise agree, the Arbitral Tribunal shall decide all questions relating
to its competence and shall determine its procedure. All decisions of the
Arbitral Tribunal shall be by a majority vote.
(g)
The Arbitral Tribunal shall afford to all parties a fair hearing and shall
render its award in writing. An award signed by a majority of the Arbitral
Tribunal constitutes the award of such Tribunal. A signed counterpart of
the award shall be transmitted to each party. Any award rendered in
accordance with the provisions of this Section shall be final and binding
upon the parties to this Agreement. Each party shall abide by and comply
with any such award rendered by the Arbitral Tribunal in accordance
with the provisions of this Section.
(h)
The parties shall fix the amount of the remuneration of the arbitrators
and such other persons as shall be required for the conduct of the
arbitration proceedings. If the parties shall not agree on such amount
before the Arbitral Tribunal shall convene, the Arbitral Tribunal shall fix
such amount as shall be reasonable under the circumstances. The Vendor
and the Purchaser shall each defray its own expenses in the arbitration
proceedings. The costs of the Arbitral Tribunal shall be divided between
and be borne equally by the Vendor and the Purchaser. Any question
concerning the division of the costs of the Arbitral Tribunal or the
procedure for payment of such costs shall be determined by the Arbitral
Tribunal.
(i)
The provisions for arbitration set forth in this Section shall be in lieu of
any other procedure for the detennination of disputes between the
parties to this Agreement or any claim by any such party against the other
party arising under this Agreement.
12
U)
1f within 30 (Thirty) days after counterparts of the award shall be
delivered to the parties the award sha!J not be complied with, any party
may enter judgement upon, or institute proceedings to enforce the award,
in any court of competent jurisdict1on against the other party, may
enforce such judgement by execution or may pursue any other
appropriate remedy against such other party for the enforcement of the
award or the provisions of this Agreement.
(k)
Service of any notice or process in connection with any proceedings
under this Section or in connection with any proceedings to enforce any
award rendered pursuant to this Section may be made in the manner
provided in Article-XVI of this Agreement. The parties to this
Agreement waive any and alJ other requirements for the service of any
such notice or process.
Article-XVII
NOTICES
17.1
Any notice or request to be given or to be made by a party to the other under this
Agreement or in connection therewith shall be in writing and may be given by
telex or letter. Such notice or request shall be deemed to have been duly given or
made when it shall be delivered by band or mail or sent by telex or telefax to the
other party at its address specified in Section 16.2 hereof or any other address as
it may designate by notice to the other party.
17.2
For the purposes of Section 16.1 hereof, the parties have given their addresses as
follows:
For th e Purchaser:
(i) Ministiy of Finance
Directorate General of Treasury
P.O. Box: 139
Jalan Lapangan Banteng Timur 2-4
Jakarta Pusat (10710) Indonesia
Tel (62 21) 386-5330
Fax (62 21) 381-2859
(ii) Ministry of Religious Affairs
JI. Lapangan Banteng Barat No. 3-4
Jakarta Pusat ( 10710) Indonesia
Tel: (62 21) 3519734
Fax: (62 21) 3812344
13
(iii) UIN Alauddin
JI. Sultan Alauddin No. 63
Makassar 9022 1 Indonesia
Tel: (62 411) 864924
Fax: (62 2 1) 86 49 23
For The Islamic Development Bank
P.O. Box: 5925
Jeddah - 21432
Kingdom of Saudi Arabia
Telex: 601137 ISDB SJ
Cable: BANKISLAMI JEDDAH
Fax:636687 1
lN WITNESS WHEREOF, the parties hereto have signed this Agreement on the date
mentioned in the Preamble to this Agreement.
FOR AND ON BEHALF OF THE FOR AND ON BEHALF OF THE
GOVERNMENT OF THE REPUBLIC ISLAMIC DEVELOPMENT BANK:
OF INDONESIA:
DR. SALIM SEGAF AL-JUFRIE, MA
DR. AHMAD MOHAMED ALI
AMBASSADOR EXTRAORDINARY AND
PLENIPOTENTIARY OF REPUBLIC OF
INDONESlA TO THE KINGDOM OF
SAUDI ARABlA
PRESlDENT- IDB
14
/II(
ANNEX-I
DESCRIPTION OF THE WORKS
Islamic University of Alauddin Makassar facility at Samata, Gowa will become
the main campus after completion of the proposed Project, housing the teaching
and laboratory facilities for all faculties as well as related support buildings,
student dormitories and university administration block. Civil works would
involve construction of a built-up area of approx. 58, 100 square meters in
Samata campus comprising seven new faculty buildings, supporting buildings
and in-campus infrastructure (roads, adequate car parking spaces, landscaping,
drainage, and instaUation of utilities). Main components are shown below:
1.
Seven faculty buildings comprising built up area of 37,000 1112
LL
Auditorium /Multipurpose hall (4,000 rn 2),
111.
Research Centre and Library: (4,500 m 2);
iv.
Polyclinic: (600 m 2 )
v.
Student Donnitories (3,500 m2),
vi.
Cafeteria and Cooperative Centre (2,000 m2).
Gunang Sari Campus will become a centre mainly for various training programs
and research activities. A new seven storied building will be constructed as a
training centre comprising built up area of about 6,000 m2 •
Construction of Student Centre and Rectorate Building, renovation of five
existing faculty buildings at Samata Campus as well as renovation of existing
university club, auditorium and the mosque buildings at Gunang Sari Campus
would be carried out through Government resources.
**********
15
ANNEX-II
DESCRIPTION OF THE PROJECT
TI1e objective of proposed Project is to upgrade and expand the academic and research
facilities as well as curricula of Islamic University of Alauddin Makassar to carryout
quality education and advanced training in modem science faculties in addition to the
traditional faculties of Islamic Studies and Shariah. The Project of upgrading
Alauddin Makassar into a modern Islamic University comprises construction of seven
faculty buildings and training center, suppo11ing buildings, campus infrastructure,
renovation of existing buildings, procurement of equipment and furniture, upgrading
of the curriculum, and capacity building for the staff of the Islamic University of
Alauddin Makassar.
The scope of the Project is aimed to cover the following activities:
a. Civil works;
b. Equipment and Furniture;
c. Consultancy Services;
d. Capacity Building of Faculty/Staff ;
e. Academic Curriculum Development
f.
Project Management Unit (staff and equipment);
g. Project Financial Auditing;
h. Project Start-up Workshop.
***********
16
)/)/
ANNEX-ID
FORM OF OPINION OF COUNSEL TO
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
(THE PURCHASER)
Date:
I
- -I- ---
To:
The Islamic Development Bank,
P.O.Box: 5925 JEDDAH 21432,
Kingdom of Saudi Arabia.
Dear Sirs,
ln my capacity as Counsel to the Government of the Republic of Indonesia (the
''Purchaser"), I have examined originals (or copies) certified or otherwise identified to
my satisfaction of the Istisna'a Agreement and the Agency Agreement dated as of
_ _/ _ _/
(the 'Agreements'') providing for the Development and Upgrading
of Islamic University of Alauddin Makassar Project (the Works) by the Islamic
Development Bank (the Vendor) for the Purchaser in an amount of US$ 25,861,000/(United States Dollars Twenty Five Million Eight Hundred and Sixty One Thousand)
(which is approximately equivalent to ID 17,713,000/-) only and appointing the
Purchaser as the Vendor's Agent for supervision of the Works and the sale thereof to the
Purchaser and such other documents as I have deemed necessary or appropriate as a
basis for the opinions expressed herein.
The opinions expressed herein are limited to questions ansmg under the laws of
Indonesia and its political subdivisions. and I do not purport to express an opinion on
any question arising under the law of any other jurisdiction.
All terms defined in the Agreement and used but not defined herein have the meanings
given to them in the Agn::i::ment.
Subject to the foregoing, it is my opinion that:
(a)
The Purchaser has the power and authority to own its property, to conduct its
business as currently conducted and to consummate the transactions
contemplated in the Agreement.
(b)
The Purchaser has taken all necessary action to authorize the execution and
delivery of the Agreements and all other documents to be executed and delivered
by it in connection with the Agreement, the performance of its obligations under
the Agreements and the consummation of the transactions contemplated in the
17
Agreement.
(c)
The Agreements have been duly executed and delivered by the Purchaser and
constitute, legal, valid and binding obligations of the Purchaser enforceable
against the Purchaser in accordance with their tenns. subject to applicable
insolvency, moratorium and similar laws affecting creditors' rights generally.
(d)
All goverrunentaJ authorizations and actions of any kind necessary to authorize
or required for the validity or enforceability of the obligations contemplated
under the Agreements against the Purchaser have been obtained or performed
and are valid and subsisting in fu ll force and effect.
(e)
No event has occurred and is continuing that constitutes. or that, with the giving
of notice or the lapse of time or both, would constitute, a default under any
agreement or instrument evidencing any obligation of the Purchaser and no such
event will occur upon the making of any disbursement under the Agreements.
(f)
No consent or approval of. or notice to, any creditor of the Purchaser is required
by the terms of any agreement or instrument evidencing any obligations of the
Purchaser for the execution or delivery of, or the performance of the obligations
of the Purchaser under the Agreements or the consummation of the transactions
contemplated in the Agreements, and that execution, delivery, performance and
consummation will not result in any breach or violation of, or constitute a default
under, the charter or by-laws of the Purchaser or any agreement, instrument,
judgement or order known to me, or any statute, rule or regulation, applicable to
the Purchaser or to any of its property.
(g)
There are no actions or proceedings pending or. to my knowledge, threatened the
adverse determination of which might have a materially adverse effect on the
financial condition of the Purchaser or impair the ability of the Purchaser to
perfonn its obligations under, or affect the validity or enforceability of, the
Agreements.
(h)
The Purchaser has good title to its property free and clear of all liens and other
encumbrances, and its obligations under the Agreement rank at least pari passu
with all its other unsecured obligations.
(i)
The execution and delivery of the Agreements are not subject to any tax, duty,
fee or other charge. including. without limitation, any registration or transfer tax,
stamp duty or similar levy, imposed by or within Indonesia or any political
subdivision or taxing authority thereof or therein.
G)
The Purchaser waive its immunity on grounds of sovereignty in respect of any
action or proceeding relating in any way to the Agreement that may be brought
in the court of Indonesia. Notwithstanding the foregoing, the law on State
Treasury (Law Number I Year 2004) prohibits the attachment of property or
asset owned by the Purchaser.
18
(k)
The execution and deUvery of the Agreements by the Purchaser and perfonnance
of its obligations there-under constitute commercial transactions.
(I)
The choice by the parties to the Agreements of the Principles of Islamic Shariah
as governing Jaw is legal, valid and binding.
(m)
It is not necessary to insure that legality, validity, enforceability or admissibility
in evidence in the courts of Indonesia of the Agreements that they be filed,
recorded, registered or enrolled with any court or government agency of or in
Indonesia or stamped with any stamp or similar transaction tax.
(n)
It is not necessary under the laws and Constitution of Indonesia in order to
enable the Vendor to enforce its rights under the Agreements or by reason of the
execution of the Agreements or the performance by the Vendor of its obligations
there-under that the Vendor should be licensed, qualified or entitled to carry on
business in Indonesia.
(o)
the Vendor will not be deemed to be resident, domiciled to carry on business or
subject to taxation in Indonesia by reason only of the execution, performance
and/or enforcement of the Agreements, the Construction of the Works by the
Vendor and the sale thereof to the Purchaser pursuant to the Agreements, and no
withholding taxes will be imposed on any amounts otherwise receivable by the
Vendor w1der the Agreements.
Unless and until I give the Vendor notice of any change in this opinion before the
disbursement of funds under the Agreement, you and your Counsel may rely on this
opinion at all times from the date hereof to and including such disbursement as if this
opinion were dated on and as of the day of, and delivered at, each such time.
Yours truly,
***********
19
ISTISNA'A AGREEMENT
BETWEEN
THE
GOVERNMENT OF THE
REPUBLIC OF INDONESIA
AND
ISLAMIC DEVELOPMENT BANK
CONCERNING
THE DEVELOPMENT AND UPGRADING OF ISLAMIC UNIVERSITY OF
ALAUDDIN MAKASSAR PROJECT IN INDONES lA
D:\FAgns\lstisna'a\IND-118(1ST).nf-mr- IO/ln006 3:29 PM
ISTISNA'A AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE ISLAMIC DEVELOPMENT BANK
THIS AGREEMENT is entered into on _!QJQ.2!1427H (corresponding to
_Q2_/_1Q_l2006G) between the Government of the Republic of Indonesia (hereinafter
refeITed to as the "Purchaser") and the Islamic Development Bank (hereinafter referred
to as the "Vendor'').
WHEREAS,
A)
The Purchaser has requested the Vendor to construct for it the Development and
Upgrading of Is lamic University of Alauddin Makassar Project described in
Annex-I to this Agreement (hereinafter referred to as the "Works") for use in the
Project described in Annex-II to this Agreement;
B)
The Vendor has agreed to construct the Works for the Purchaser for a total cost
not exceeding US$ 25,861,000/- (United States Dollars Twenty Five Million
Eight Hundred and Sixty One Thousand) (which is approximately equivalent to
ID 17,713,000/-) only for a Sale Price to be determined in accordance with the
provisions of this Agreement and which shall be paid by the Purchaser to the
Vendor in 12 (Twelve) years starting after a Gestation Period of 3 (Three) years
upon the terms and conditions set out in this Agreement.
C)
The terms and conditions referred to in Paragraph (B) hereof have been
communicated to and accepted by the Purchaser;
NOW, THEREFORE, the Vendor and the Purchaser hereby agree as follows:
Article-I
DEFINITIONS - INTERPRETATION
1.1
In this Agreement, unless the context othe1wise requires, the fo llowing terms
shall have the meaning appearing against each of them hereunder:
Agency Agreement:
The agreement of even date between the Vendor
and the Purchaser whereby the Purchaser shall act
as the Vendor's agent in selection of the Contractor
and supervision of construction of the Works.
Works:
The Works described in Annex-I hereto.
2
Capital Cost:
The total cost of the Construction of the Works
which shall include the price payable to the
Contractor under the Contract and any other costs
or expenses incurred by the Vendor in or m
connection with the Construction of the Works.
Contract:
The contract for the construction of the Works
concluded on behalf of the Vendor by the
Purchaser with the Contractor.
Contractor :
The contractor who shall be entrusted with the
construction of the Works.
Consultant:
The consultant who shall be entrusted with the
supervision of the Works to be perfonned under
the Contract as indicated in the Consultancy
Agreement.
Consultan cy Agreement:
The agreement with Consultant for the provision of
consultancy services pertaining to the Works to be
concluded by the Purchaser on behalf of the
Vendor.
Effective date of
Agreement:
The date on which the Vendor declares this
Agreement effective in accordance with ArticleXIII hereof.
Gestation Period :
The period commencing on the Date of First
Disbursement and ending 36 (Thirty Six) months
thereafter.
Islamic Dina r and "ID" :
The unit of account of the Vendor determined in
accordance with Article 4(1) of the Articles of
Agreement of the Vendor. one Islamic Dinar being
equivalent to one Special Drawing Right of the
International Monetary Fund.
Proj ect:
The project described in Annex II hereto.
Sale Price:
The Sale Price of the Works payable by the
Purchaser to the Vendor in accordance with
Article-IX hereof.
3
1.2
Tax:
Any tax, levy, impost, duty or other charge of
similar nature (including without limitation any
penalty payable in connection with any failure to
pay or delay in paying any of the same).
US Dollar and "USS'':
The lawful currency of the
America.
United States of
In this Agreement:
(a)
Unless the context otherwise requires, words denoting the singular
include the plural and vice-versa, words denoting persons include
corporations and partnerships; and references to a specified Annex,
Appendix, Article or Section is a reference to that Annex, Appendix,
Article or Section of this Agreement.
(b)
Words and expressions defined in the Agency Agreement and not
defined herein shall have the same meaning as given in the Agency
Agreement.
(c)
The Article and Section headings are inserted for convenience of
reference only and shall not be used to define, interpret or limit any of
the provisions of this Agreement.
Article-//
PREAMBLE AND ANNEXES
PART OF THE AGREEM ENT
The Preamble and the Annexes to this Agreement shall be an integral part thereof.
Article-III
CONSTRUCTION OF THE WORKS
3.1
The Vendor agrees to have the Works constructed in accordance with the terms
and conditions of this Agreement and the Purchaser agrees to take over the
Works on the terms and conditions set out in this Agreement and to pay the Sale
Price.
3.2
For the avoidance of any doubt. the Purchaser agrees that the Vendor will have
the Works constructed by the Contractor to be selected in accordance with the
relevant provisions indicated in the Agency Agreement.
3.3
The Executing Agency responsible for the implementation of the Project on
behalf of the Purchaser shall be the Ministry of Religious Affairs of the Republic
of Indonesia. The Executing Agency shall implement the Project through a
Project Management Unit (PMU) consisting of authorized personnel of the
4
Islamic Unjversity of Alauddjn Makassar, Indonesia.
Article-JV
TIME FOR COMPLETION OF THE WORKS
Subject to Articles VI and X hereof, the construction of the Works will be completed
withln 3 (Three) years from the date of the First Disbursement.
Artic/e-V
TERMINATION OF THE AGREEMENT
5.1
Subject to Section 13.2 hereof, the Pm-chaser may request the Vendor to
terminate this Agreement and cancel the Approved Amount or any part thereof
at any time before the signature of the Consultancy Agreement or the Contract.
5.2
Unless Disbursement has been made from the Approved Amount before
termination, if the Approved Amount is cancelled pursuant to Article XII hereof,
the Agreement shall deemed to be automatically terminated.
5.3
Before signature of the Consultancy Agreement or the Contract, the Vendor
may, by notice to the Purchaser, termjnate this Agreement in any of the
fo llowing cases:
(a)
Failure of the Purchaser to discharge its obligations to pay any amount
due from it to the Vendor, or to any other affiliated body of the Vendor,
under any agreement other than this Agreement;
(b)
An extraordinary situation shall have arisen which (i) shall make it, in
the opinion of the Vendor, improbable that the Purchaser would be able
to fulfil its obligations under this Agreement, or (ii) which prevents the
attainment of the purposes for which this Agreement is entered into;
(c)
A representation made by the Purchaser or any statement furnished and
intended to be relied upon by the Vendor in processing the Project for
approval or for entering into this Agreement, shall have been incomplete
or incorrect in any material respect;
The Agreement shall continue to be terminated until the event or events wruch
gave rise to such tennination shall have ceased to exist or until the Vendor shall
have notified the Purchaser that the undertaking of the Vendor to construct the
Works has been restored, whichever is earlier; provided, however, that in the
case of any such notice of restoration, the undertaking to construct the Works
shall be restored only to the extent and subject to the conditions specified in such
notice, and no such notice shall affect or impair any right, power or remedy of
the Vendor in respect of any other or subsequent event described in this Section.
5.4
Neither the Vendor nor the Purchaser shall have any further obligation to the
other from the date of cancellation of the Agreement under Section 5.1 , 5.2 or
5
5.3 of this Article, provided that such tennination shall not affect any obligation
incw-red or right accrued to any party before such tem1ination.
5.5
Notwithstanding the termination of the Agreement, the Purchaser shall continue
to co-operate and assist the Vendor in recovering from the Contractor such part
of the Contract Price and any other amount that may have been Disbursed by the
Vendor before termination of the Contract.
Article-VI
ACCEPTANCE OF THE WORKS
BY THE PURCHASER
-
The Purchaser shall be deemed to have irrevocably accepted the Works for all purposes
thereof when he signs the Final Acceptance Certificate.
Article-VII
OWNERSHIP AND RISK
The title to and the risk in the Works shall pass to the Purchaser on the signing of the
Final Acceptance Certificate.
Article-VIII
CONDITIO OF THE WORKS
8.1
8.2
Without prejudice to the foregoing, the Vendor shall not have any responsibility
or liability whatsoever to the Purchaser or any other person or entity, with
respect to:
(a)
any liability, loss or damage caused (or alleged to be caused) directly or
indirectly by the Works or by any inadequacy thereof or deficiency or
defect therein or by any other circumstances in connection therewith:
(b)
in respect of the use or operation of the Works or any risks relating
thereto;
(c)
any interruption of service. loss of business or anticipated profit or
consequential damages.
The Vendor undertakes to assign to the Purchaser the benefit of any guarantee,
condition or warranty relating to the Works which may have been given by the
Contractor to the Vendor and which had been examined and accepted by the
Purchaser and all other conditions or warranties as may be implied by law or
recognized by custom in favour of the Vendor. In addition. the Vendor shall take
such other action as the Purchaser shall reasonably request to enable the
Purchaser to claim against the Contractor.
6
Article-IX
PAYMENT OF THE SALE PRICE
9.1
The Sale Price shall be equal to the Capital Cost of the Works plus a mark-up of
5.1 % (Five point One per cent) per annum.
9.2
The Purchaser shall pay the Sale Price in 24 (Twenty Four) semi-annual
consecutive instalments, the first of which shall become due and payable 6 (Six)
months from the end of the Gestation Period. The Vendor shall send the Sale
Price Payment Schedule to the Purchaser shortly after the issue of the Final
Acceptance Certificate.
9.3
Subject to Section 9.6 hereof. each payment to be made by the Purchaser to the
Vendor hereunder shall be made in any convertible currency acceptable to the
Vendor for value on the due date to the account of the Vendor or in such other
manner as the Vendor may from time to time notify the Purchaser in writing.
9.4
Any payment due hereunder shall be deemed to have been duly paid when any of
the ｦｯ ｬ ｯｶＮｾ
ｮｧ＠
banks confirms to the Vendor the receipt of such payment in the
Vendor's account with it:
(a)
If such payment is made in U.S. Dollars:
Account No. GB 14 GULF 4053 0700 1591 11
Gulflntemational Bank B.S.C.
One Knightsbridge
London SW l X 7XS
United Kingdom
SWIFT CODE: GULFGB2L
(b)
If such payment is made in Pounds Sterling:
Account No.122432 GBP2520 01
Gulf International Bank B.S.C.
One Knightsbridge
London SW IX 7XS
United Kingdom
Telex No. 8812889/8813326 GIBANK G
SWIFT CODE: GULFGB2L
(c)
If such payment is made in EURO Currency:
Account No. 096965 00 1 51
Unjon De Banques Arabes Et Francaises (UBAF)
92523 Paris, Neuilly Cedex France
Telex No. 610334 UBAF
SWIFT CODE: UBAFRPPXXX
7
9.5
If any payment falls due hereunder on a day which is not a business day,
payment shall be made on the next following business day.
9.6
The Islamic Dinar is the unit of account for each and every sum at any time due
from the Purchaser hereunder. If for the purposes of this Agreement it is
necessary to convert any sum in Islamic Dinars into any other currency or vice
versa, the applicable rate of exchange shall be that detennined by the Vendor.
The Vendor will nonnally make such conversion on the basis of the prevailing
rate of exchange for the Special Drawing Right of the International Monetary
Fund (The IMF), as advised by the IMF, on the day on which such payment is
made.
9.7
All payments made by the Purchaser hereunder shall be made free and clear of
and without deduction of, or on account of, any tax, set-off, counter-claim or
other matter. If the Purchaser is required by law to make any deduction or
withholding from any sum payable by it hereunder, the sum payable by it in
respect of which such deduction or withholding is required to be made shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, the Vendor receives and retains (free from any
liability in respect of any such deduction or withholding) a net sum equal to the
sum which it would have received and so retained had no such deduction or
withholding been made.
Artic/e-X
REPRESENTATIONS
The Purchaser represents that:
1)
it has power to enter into this Agreement and to perform its obligations
hereunder and all action required to authorize the execution of this Agreement
and the performance by the Purchaser of its obligations hereunder has been duly
taken;
2)
the obligations expressed to be assumed by the Purchaser in this Agreement are
legal and valid obligations binding on the Purchaser in accordance with the
terms hereof;
3)
the execution of this Agreement and the Purchaser's perfonnance of its
obligations hereunder do not constitute and will not result in any breach of any
agreement, treaty or law;
4)
all acts, conditions and things (including exchange control consents) required by
the laws of Indonesia to be done, fulfilled and performed in order:
8
(i)
to enable the Purchaser lawfully to enter into and perform the obligations
expressed to be assumed by it in this Agreement;
(ii)
to ensure that the obligations expressed to be assumed by it in this
Agreement are legal, valid and enforceable; and
(iii)
to make this Agreement admissible in evidence in Indonesia without
further steps or fonnalities have been done, fulfilled and performed in
strict compliance with the laws and Constitution of Indonesia;
5)
no action or administrative proceeding of or before any court or agency which
might have a material adverse effect on the financial condition of the Purchaser
has been initiated or threatened;
6)
under the Jaws of Indonesia in force at the date hereof, the claims of the Vendor
against the Purchaser under this Agreement will rank at least pari passu with the
claims of all other unsecured creditors for any indebtedness of the Purchaser;
Article-XI
EVENTS OF DEFAULT
l I. I
11.2
If one of the events specified in this Section (events of default) shall have
happened and be continuing then the Vendor by notice to the Purchaser, may
declare the whole or part of the Sale Price to be, and the same shall thereupon
become, immediately due and payable (anything in this Agreement
notwithstanding) without any further notice:
(a)
default shall have occurred in the payment of any of the Sale Price
instalments and such default shall have continued for a period of 15
(Fifteen) days.
(b)
default [other than the default specified in (a) above] shall have occurred
in the performance of any obligation of the Purchaser under this
Agreement and any such default shall have continued for a period of 30
(Thirty) days.
(c)
any representation or warranty confirmed or made by the Purchaser in
connection with the execution and delivery of this Agreement, or in
connection with any request for disbursement under this Agreement,
shall be found to have been incorrect in any material respect and shall
continue to be incorrect for a period of 30 (111irty) days after notice
thereof shall have been given to the Purchaser by the Vendor;
(d)
any provision
unenforceable.
of this
Agreement
becomes
invalid,
illegal
or
If any Event of Default or any event which. with lapse of time or notice and
lapse of time, would become an Event of Default shall have happened, the
9
Purchaser shall immediately give the Vendor notice thereof by telex or facsimile,
specifying the nature of such Event of Default or such event and any steps the
Purchaser is taking to remedy the same.
11.3
No course of dealing and no delay in exercising, or omission to exercise, any
right, power or remedy accruing to the Vendor upon any default under this
Agreement or any other agreement shall impair any such right, power or remedy
or be construed to be a waiver thereof or an acquiescence therein; nor shall the
action of the Vendor in respect of any such default, or any acquiescence by it
therein, affect or impair any right, power or remedy of the Vendor in respect of
any other default.
Article-XII
CANCELLATION OF THE APPROVED AMOUNT
12. l
If the Contract is not signed within 180 (One Hw1dred and Eighty) days from the
Effective Date of this Agreement. the Vendor may by notice to the Pmcbaser
cancel the Approved Amount, unless it is satisfied by the Purchaser's
j ustification for such delay.
12.2
Ln the event that the Contractor fai ls to fulfil any of its obligations under the
Contract and the Pmchaser, in consultation with the Vendor, terminates the
Contract in accordance with its terms, such termination shall after 60 (Sixty)
days from such termination operate as a cancellation of any amount remaining
un-disbursed from the Approved Amow1t, unless the Vendor shall otherwise
agree.
Article-XIII
EFFECTIVENESS OF THE AGREEMENT
Th.is Agreement shall not be effective Lmless and until the Purchaser furnishes the
Vendor with Legal Opinion from the Counsel to the Purchaser substantially in the form
provided in Annex-III hereto;
Article-XIV
TERMINATION OF AGREEMENT FOR FAILURE
TO BECOME EFFECTIVE
If the Agreement shall not have entered into effect within 6 (Six) months from the date
of signature, the Agreement and all obligations of the parties thereunder shall terminate,
unJess the Vendor, after consideration of the reasons for the delay, shall establish a later
date for the purposes of this Section. The Vendor shall promptly inform the Purchaser of
such later date or the term ination of the Agreement, as the case may be.
10
/(II
Article-XV
WAIVER
Failure of the Vendor to exercise or assert any of its rights under this Agreement or its
delay in the same or its failure to exercise or assert any remedy it may have against the
Purchaser or its delay in the same, shaU not prejudice such right or remedy and shall not
be construed as a waiver of such light or remedy.
Article-XVI
GOVERNING LAW - SETTLEMENT OF DISPUTES
16.1
This Agreement shall be governed by, and be construed in accordance with
Islamic Shariah.
16.2
Any dispute between the parties to this Agreement and any claim by such party
against the other party arising w1der the Agreement which could not be settled
amkably by the parties within 60 (Sixty) days from the date of notice from one
party to the other, shall be submitted to arbitration by an Arbitral Tribunal as
hereinafter provided:
(a)
The parties to such arbitration shall be the Vendor on one side and the
Purchaser on the other side.
(b)
The Arbitral Tribunal shall consist of three arbitrators appointed as
follows:
One arbitrator shall be appointed by the Vendor, the second arbitrator
shall be appointed by the Purchaser and the third arbitrator (hereinafter
referred to as "the Referee") shall be appointed by agreement of the
parties, or if they shall not agree, by the Secretary General of the
Organization of Islamic Conference (OIC). The Referee shall be a lawyer
specialized in international finance or a banker with knowledge of
Islamic finance transactions. If either party shall fail to appoint an
arbitrator, such arbitrator shall be appointed by the Secretary General of
OIC. In case any arbitrator appointed in accordance with this Section
shall resign, die or become unable to act, a successor arbitrator shaU be
appointed in the same manner as herein prescribed for the appointment
of the original arbitrator and such successor shall have all the powers and
duties of such original arbitrator.
(c)
An arbitration proceedings may be instituted under this Section upon
notice by the party instituting such proceedings to the other party. Such
notice shall contain a statement setting forth the nature of the dispute or
claim to be submitted to arbitration, the nature of the relief sought, the
name of the arbitrator appointed by the party instituting the proceedings
11
and the name of a proposed Referee. Within 30 (Thirty) days after the
giving of such notice, the other party shall notify to the party instituting
the proceedings the name of the arbitrator appointed by such other party
and its agreement or disagreement to the appointment of the proposed
Referee.
(d)
If within 60 (Sixty) days after the giving of such notice instituting the
arbitration proceedings the parties shall not have agreed upon a Referee
or the party to whom notice of arbitration is given fails to appoint an
arbitrator, any party may request the appointment of the second arbitrator
or a Referee (as the case may be) as provided in paragraph (b) of this
Section.
(e)
The Arbitral Tribunal shall convene at such time and place as shall be
determined by the Referee. Thereafter, the Arbitral Tribunal shall
determine where and when it shall sit.
(f)
Subject to the provisions of this Section, and except as the parties shall
otherwise agree, the Arbitral Tribunal shall decide all questions relating
to its competence and shall determine its procedure. All decisions of the
Arbitral Tribunal shall be by a majority vote.
(g)
The Arbitral Tribunal shall afford to all parties a fair hearing and shall
render its award in writing. An award signed by a majority of the Arbitral
Tribunal constitutes the award of such Tribunal. A signed counterpart of
the award shall be transmitted to each party. Any award rendered in
accordance with the provisions of this Section shall be final and binding
upon the parties to this Agreement. Each party shall abide by and comply
with any such award rendered by the Arbitral Tribunal in accordance
with the provisions of this Section.
(h)
The parties shall fix the amount of the remuneration of the arbitrators
and such other persons as shall be required for the conduct of the
arbitration proceedings. If the parties shall not agree on such amount
before the Arbitral Tribunal shall convene, the Arbitral Tribunal shall fix
such amount as shall be reasonable under the circumstances. The Vendor
and the Purchaser shall each defray its own expenses in the arbitration
proceedings. The costs of the Arbitral Tribunal shall be divided between
and be borne equally by the Vendor and the Purchaser. Any question
concerning the division of the costs of the Arbitral Tribunal or the
procedure for payment of such costs shall be determined by the Arbitral
Tribunal.
(i)
The provisions for arbitration set forth in this Section shall be in lieu of
any other procedure for the detennination of disputes between the
parties to this Agreement or any claim by any such party against the other
party arising under this Agreement.
12
U)
1f within 30 (Thirty) days after counterparts of the award shall be
delivered to the parties the award sha!J not be complied with, any party
may enter judgement upon, or institute proceedings to enforce the award,
in any court of competent jurisdict1on against the other party, may
enforce such judgement by execution or may pursue any other
appropriate remedy against such other party for the enforcement of the
award or the provisions of this Agreement.
(k)
Service of any notice or process in connection with any proceedings
under this Section or in connection with any proceedings to enforce any
award rendered pursuant to this Section may be made in the manner
provided in Article-XVI of this Agreement. The parties to this
Agreement waive any and alJ other requirements for the service of any
such notice or process.
Article-XVII
NOTICES
17.1
Any notice or request to be given or to be made by a party to the other under this
Agreement or in connection therewith shall be in writing and may be given by
telex or letter. Such notice or request shall be deemed to have been duly given or
made when it shall be delivered by band or mail or sent by telex or telefax to the
other party at its address specified in Section 16.2 hereof or any other address as
it may designate by notice to the other party.
17.2
For the purposes of Section 16.1 hereof, the parties have given their addresses as
follows:
For th e Purchaser:
(i) Ministiy of Finance
Directorate General of Treasury
P.O. Box: 139
Jalan Lapangan Banteng Timur 2-4
Jakarta Pusat (10710) Indonesia
Tel (62 21) 386-5330
Fax (62 21) 381-2859
(ii) Ministry of Religious Affairs
JI. Lapangan Banteng Barat No. 3-4
Jakarta Pusat ( 10710) Indonesia
Tel: (62 21) 3519734
Fax: (62 21) 3812344
13
(iii) UIN Alauddin
JI. Sultan Alauddin No. 63
Makassar 9022 1 Indonesia
Tel: (62 411) 864924
Fax: (62 2 1) 86 49 23
For The Islamic Development Bank
P.O. Box: 5925
Jeddah - 21432
Kingdom of Saudi Arabia
Telex: 601137 ISDB SJ
Cable: BANKISLAMI JEDDAH
Fax:636687 1
lN WITNESS WHEREOF, the parties hereto have signed this Agreement on the date
mentioned in the Preamble to this Agreement.
FOR AND ON BEHALF OF THE FOR AND ON BEHALF OF THE
GOVERNMENT OF THE REPUBLIC ISLAMIC DEVELOPMENT BANK:
OF INDONESIA:
DR. SALIM SEGAF AL-JUFRIE, MA
DR. AHMAD MOHAMED ALI
AMBASSADOR EXTRAORDINARY AND
PLENIPOTENTIARY OF REPUBLIC OF
INDONESlA TO THE KINGDOM OF
SAUDI ARABlA
PRESlDENT- IDB
14
/II(
ANNEX-I
DESCRIPTION OF THE WORKS
Islamic University of Alauddin Makassar facility at Samata, Gowa will become
the main campus after completion of the proposed Project, housing the teaching
and laboratory facilities for all faculties as well as related support buildings,
student dormitories and university administration block. Civil works would
involve construction of a built-up area of approx. 58, 100 square meters in
Samata campus comprising seven new faculty buildings, supporting buildings
and in-campus infrastructure (roads, adequate car parking spaces, landscaping,
drainage, and instaUation of utilities). Main components are shown below:
1.
Seven faculty buildings comprising built up area of 37,000 1112
LL
Auditorium /Multipurpose hall (4,000 rn 2),
111.
Research Centre and Library: (4,500 m 2);
iv.
Polyclinic: (600 m 2 )
v.
Student Donnitories (3,500 m2),
vi.
Cafeteria and Cooperative Centre (2,000 m2).
Gunang Sari Campus will become a centre mainly for various training programs
and research activities. A new seven storied building will be constructed as a
training centre comprising built up area of about 6,000 m2 •
Construction of Student Centre and Rectorate Building, renovation of five
existing faculty buildings at Samata Campus as well as renovation of existing
university club, auditorium and the mosque buildings at Gunang Sari Campus
would be carried out through Government resources.
**********
15
ANNEX-II
DESCRIPTION OF THE PROJECT
TI1e objective of proposed Project is to upgrade and expand the academic and research
facilities as well as curricula of Islamic University of Alauddin Makassar to carryout
quality education and advanced training in modem science faculties in addition to the
traditional faculties of Islamic Studies and Shariah. The Project of upgrading
Alauddin Makassar into a modern Islamic University comprises construction of seven
faculty buildings and training center, suppo11ing buildings, campus infrastructure,
renovation of existing buildings, procurement of equipment and furniture, upgrading
of the curriculum, and capacity building for the staff of the Islamic University of
Alauddin Makassar.
The scope of the Project is aimed to cover the following activities:
a. Civil works;
b. Equipment and Furniture;
c. Consultancy Services;
d. Capacity Building of Faculty/Staff ;
e. Academic Curriculum Development
f.
Project Management Unit (staff and equipment);
g. Project Financial Auditing;
h. Project Start-up Workshop.
***********
16
)/)/
ANNEX-ID
FORM OF OPINION OF COUNSEL TO
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
(THE PURCHASER)
Date:
I
- -I- ---
To:
The Islamic Development Bank,
P.O.Box: 5925 JEDDAH 21432,
Kingdom of Saudi Arabia.
Dear Sirs,
ln my capacity as Counsel to the Government of the Republic of Indonesia (the
''Purchaser"), I have examined originals (or copies) certified or otherwise identified to
my satisfaction of the Istisna'a Agreement and the Agency Agreement dated as of
_ _/ _ _/
(the 'Agreements'') providing for the Development and Upgrading
of Islamic University of Alauddin Makassar Project (the Works) by the Islamic
Development Bank (the Vendor) for the Purchaser in an amount of US$ 25,861,000/(United States Dollars Twenty Five Million Eight Hundred and Sixty One Thousand)
(which is approximately equivalent to ID 17,713,000/-) only and appointing the
Purchaser as the Vendor's Agent for supervision of the Works and the sale thereof to the
Purchaser and such other documents as I have deemed necessary or appropriate as a
basis for the opinions expressed herein.
The opinions expressed herein are limited to questions ansmg under the laws of
Indonesia and its political subdivisions. and I do not purport to express an opinion on
any question arising under the law of any other jurisdiction.
All terms defined in the Agreement and used but not defined herein have the meanings
given to them in the Agn::i::ment.
Subject to the foregoing, it is my opinion that:
(a)
The Purchaser has the power and authority to own its property, to conduct its
business as currently conducted and to consummate the transactions
contemplated in the Agreement.
(b)
The Purchaser has taken all necessary action to authorize the execution and
delivery of the Agreements and all other documents to be executed and delivered
by it in connection with the Agreement, the performance of its obligations under
the Agreements and the consummation of the transactions contemplated in the
17
Agreement.
(c)
The Agreements have been duly executed and delivered by the Purchaser and
constitute, legal, valid and binding obligations of the Purchaser enforceable
against the Purchaser in accordance with their tenns. subject to applicable
insolvency, moratorium and similar laws affecting creditors' rights generally.
(d)
All goverrunentaJ authorizations and actions of any kind necessary to authorize
or required for the validity or enforceability of the obligations contemplated
under the Agreements against the Purchaser have been obtained or performed
and are valid and subsisting in fu ll force and effect.
(e)
No event has occurred and is continuing that constitutes. or that, with the giving
of notice or the lapse of time or both, would constitute, a default under any
agreement or instrument evidencing any obligation of the Purchaser and no such
event will occur upon the making of any disbursement under the Agreements.
(f)
No consent or approval of. or notice to, any creditor of the Purchaser is required
by the terms of any agreement or instrument evidencing any obligations of the
Purchaser for the execution or delivery of, or the performance of the obligations
of the Purchaser under the Agreements or the consummation of the transactions
contemplated in the Agreements, and that execution, delivery, performance and
consummation will not result in any breach or violation of, or constitute a default
under, the charter or by-laws of the Purchaser or any agreement, instrument,
judgement or order known to me, or any statute, rule or regulation, applicable to
the Purchaser or to any of its property.
(g)
There are no actions or proceedings pending or. to my knowledge, threatened the
adverse determination of which might have a materially adverse effect on the
financial condition of the Purchaser or impair the ability of the Purchaser to
perfonn its obligations under, or affect the validity or enforceability of, the
Agreements.
(h)
The Purchaser has good title to its property free and clear of all liens and other
encumbrances, and its obligations under the Agreement rank at least pari passu
with all its other unsecured obligations.
(i)
The execution and delivery of the Agreements are not subject to any tax, duty,
fee or other charge. including. without limitation, any registration or transfer tax,
stamp duty or similar levy, imposed by or within Indonesia or any political
subdivision or taxing authority thereof or therein.
G)
The Purchaser waive its immunity on grounds of sovereignty in respect of any
action or proceeding relating in any way to the Agreement that may be brought
in the court of Indonesia. Notwithstanding the foregoing, the law on State
Treasury (Law Number I Year 2004) prohibits the attachment of property or
asset owned by the Purchaser.
18
(k)
The execution and deUvery of the Agreements by the Purchaser and perfonnance
of its obligations there-under constitute commercial transactions.
(I)
The choice by the parties to the Agreements of the Principles of Islamic Shariah
as governing Jaw is legal, valid and binding.
(m)
It is not necessary to insure that legality, validity, enforceability or admissibility
in evidence in the courts of Indonesia of the Agreements that they be filed,
recorded, registered or enrolled with any court or government agency of or in
Indonesia or stamped with any stamp or similar transaction tax.
(n)
It is not necessary under the laws and Constitution of Indonesia in order to
enable the Vendor to enforce its rights under the Agreements or by reason of the
execution of the Agreements or the performance by the Vendor of its obligations
there-under that the Vendor should be licensed, qualified or entitled to carry on
business in Indonesia.
(o)
the Vendor will not be deemed to be resident, domiciled to carry on business or
subject to taxation in Indonesia by reason only of the execution, performance
and/or enforcement of the Agreements, the Construction of the Works by the
Vendor and the sale thereof to the Purchaser pursuant to the Agreements, and no
withholding taxes will be imposed on any amounts otherwise receivable by the
Vendor w1der the Agreements.
Unless and until I give the Vendor notice of any change in this opinion before the
disbursement of funds under the Agreement, you and your Counsel may rely on this
opinion at all times from the date hereof to and including such disbursement as if this
opinion were dated on and as of the day of, and delivered at, each such time.
Yours truly,
***********
19