Freight forwarding contract

FREIGHT FORWARDING CONTRACT No. ____

Moscow“___” ____________ 20___

ITG Transport Company, hereinafter referred to as the “Forwarder”, represented by its General Director ________________________________________, acting under the Articles of Association, of the one part, and _______________________________________________________, hereinafter referred to as the “Client”, represented by its General Director _________________________________________, acting under the Articles of Association, of the other part, hereinafter jointly referred to as the “Parties”, have concluded this Freight Forwarding Contract on the following terms:

1. SUBJECT OF THE CONTRACT

1.1. Under this Contract the Forwarder undertakes, for a fee, on the instructions of and at the expense of the Client, to arrange the performance of freight forwarding services connected with the carriage of the Client's cargo in containers and/or rail wagons by rail, road, sea and other modes of transport within the territory of the Russian Federation, and the Client undertakes to pay for the Forwarder's services.

1.2. Freight forwarding services are provided to the Client on the basis of instructions given to the Forwarder in the form of requests, which form an integral part of this Contract (hereinafter the “Request”). The template Request has been agreed by the Parties in Appendix 1 to the Contract and, in any event, the Request must contain accurate and complete information on the nature of the cargo, its marking, weight and volume, and the number of packages.

Each Request shall be drawn up and signed by the Parties in writing on paper; however, a Request may also be submitted by facsimile or electronic communication using the details specified in clause 11 of the Contract.

The Forwarder shall consider the Request within 2 (two) business days of receiving it and shall return it to the Client in writing on paper or by facsimile or electronic communication using the details specified in clause 11 of the Contract, either endorsed as approved or with a refusal to approve the freight forwarding services to be provided, stating the reasons for the refusal.

2. RIGHTS AND OBLIGATIONS OF THE FORWARDER

2.1. The Forwarder shall provide the services in accordance with this Contract, the terms of the Request, the Client's instructions and the requirements of the Civil Code of the Russian Federation, the Federal Law “On Freight Forwarding Activities”, the Rules of Freight Forwarding Activities and other regulatory legal acts of the Russian Federation.

2.2. Where necessary, in accordance with the terms of the Request and the Client's instructions, the Forwarder shall:

– agree with the carriers the terms of carriage and storage of the cargo, the time of transhipment from one mode of transport to another and other matters necessary for the carriage;

– complete the customs and other formalities required for the carriage;

– conclude contracts with carriers and other persons involved in the carriage and settle payments for the carriage of the cargo with carriers and other persons, either in the name of the Client or in its own name but at the Client's expense.

The Forwarder is entitled to engage third parties to perform its obligations.

2.3. The Forwarder is entitled not to begin performing its obligations under the Contract until the Client has provided the necessary documents and information on the properties of the cargo, the conditions of its carriage and other information needed for the Forwarder to perform its obligations. If the information provided is incomplete, the Client shall, at the Forwarder's request, supply the necessary additional data in the manner provided for the submission of a Request in clause 1.2 of the Contract.

2.4. The Forwarder shall pay duties and charges in good time and bear other expenses connected with the carriage of the cargo, its handling at ports (transhipment points) and other operations with the cargo that are necessary to perform the Request.

2.5. The Forwarder shall provide the Client with information on the progress of the carriage of the cargo.

2.6. On the instructions of the Client and at its expense, within the powers granted by the Client's power of attorney, the Forwarder shall represent the Client's interests before state and other authorities in connection with the performance of this Contract.

2.7. The Forwarder is entitled to depart from the Client's instructions only where this is necessary in the Client's interests and where, due to circumstances beyond its control, the Forwarder was unable to ask the Client in advance, in the manner provided for the submission of a Request in clause 1.2 of the Contract, for its consent to such a departure, or to receive a reply to its enquiry within 24 hours.

If the Client's instructions are inaccurate or incomplete or do not conform to the Contract, and the Forwarder was unable, due to circumstances beyond its control, to clarify them, the Forwarder shall provide the forwarding services acting in the Client's interests.

2.8. If, while the freight forwarding services under the Contract are being provided, the cost of freight, rail or other tariffs increases, the Forwarder shall immediately notify the Client of such changes, and the Client undertakes to reimburse the Forwarder's expenses incurred as a result of them.

2.9. The Forwarder is entitled to retain cargo in its possession until its fee has been paid and the expenses it has incurred in the Client's interests have been reimbursed, or until the Client provides adequate security for the performance of its obligations to pay the fee and reimburse those expenses. In this case the Client shall also pay the costs associated with retaining the property.

The Client shall be liable for any deterioration of the cargo caused by its retention by the Forwarder in the cases provided for in this clause of the Contract.

3. RIGHTS AND OBLIGATIONS OF THE CLIENT

3.1. The Client shall pay the fee due to the Forwarder and reimburse the expenses incurred by it in the Client's interests in the manner provided in section 4 of this Contract.

3.2. The Client shall provide the Forwarder in good time with full, accurate and reliable information on the properties of the cargo, the conditions of its carriage and other information needed for the Forwarder to perform its obligations under the freight forwarding contract, as well as the documents required for customs and sanitary control and other types of state control, including shipping and accompanying documents, certificates, sanitary and epidemiological conclusions, customs declarations, copies of sale and purchase contracts relating to the cargo and other similar documents required to arrange the carriage.

Dangerous, perishable and other cargo requiring special carriage conditions is accepted by the Forwarder only if the Client provides written information on the conditions of its transportation.

The Client shall issue the Forwarder with a power of attorney if one is required for the performance of its obligations.

3.3. Where the Client itself or its counterparties perform individual operations, or part of the operations, along the cargo's route (loading the cargo into a vehicle, unloading it from a vehicle, securing it inside a vehicle, carriage, transhipment, storage, and other work and/or services connected with the carriage of the Client's cargo), the Client shall be responsible for the quality and timing of those operations and undertakes to ensure that the relevant documents and/or information are passed to the Forwarder in good time.

3.4. The Client shall confirm that it is ready to receive or load the cargo at its warehouse, provide access for the Forwarder's vehicles to the place where the containers are loaded or unloaded, carry out the loading and unloading of the containers with its own labour and equipment (unless otherwise expressly agreed in the Request), and check that the goods being loaded correspond to those stated in the Request. The Client shall properly secure the cargo inside the container. The securing of the cargo must comply with the requirements of the Rules for the Carriage of Goods by Rail in General-Purpose Containers in the case of multimodal (combined) transport, and with the requirements of the Rules for the Carriage of Goods in Containers by Sea.

3.5. The Client shall ensure that the consignment documents are completed correctly in accordance with the rules for the carriage of goods and the Forwarder's instructions, or shall provide the Forwarder with all necessary information where the Forwarder prepares the consignment documents on the Client's instructions.

3.6. The Client shall reimburse the Forwarder for expenses incurred in the Client's interests (payment of rail and other tariffs, carriage charges, fines and other similar expenses) which were not provided for in the Contract and not agreed in advance by the Parties (clause 2.7 of the Contract) but were necessary in the course of forwarding the cargo, or were incurred in order to keep the cargo safe or to prevent even greater expenses from arising.

3.7. The Client shall reimburse the Forwarder in full for its expenses relating to enforced idle time, the payment of fines, additional charges and penalties, as well as any other similar expenses of the Forwarder incurred as a result of the Client's failure to perform, or improper performance of, its obligations under this Contract.

The Client shall also reimburse all expenses of the Forwarder incurred as a result of the consignor's or consignee's refusal to accept the cargo, irrespective of the place, time and reasons for such refusal.

3.8. If the Client cancels the carriage after the Forwarder has taken any steps to perform its obligations under this Contract, the Client shall reimburse the Forwarder for all expenses actually incurred in connection with the performance of the Client's Request.

4. PAYMENT PROCEDURE

4.1. Within 3 (three) business days of the Request being approved, the Forwarder shall send the Client an invoice for its fee for the freight forwarding services.

The Forwarder's fee for the freight forwarding services does not include the expenses incurred by the Forwarder in the Client's interests, nor any other documented expenses which the Client is obliged to reimburse to the Forwarder under this Contract. The Forwarder shall send the Client invoices for the reimbursement of expenses incurred under this Contract as and when they arise.

The Client shall pay all of the Forwarder's invoices within 3 (three) banking days of receiving them by facsimile or electronic communication, unless the Parties have agreed another way of sending invoices.

The Forwarder shall begin or continue performing its obligations under this Contract only after the Client has paid in full the invoices sent to it.

4.2. Payments under this Contract shall be made in Russian roubles by transferring funds to the bank accounts specified in clause 11 of the Contract.

4.3. Upon completion of the carriage of the cargo and performance of the Request, the Forwarder shall provide the Client with service acceptance certificates and VAT invoices in the form and within the time limits established by the current legislation of the Russian Federation.

4.4. If an approved Request is cancelled, the Client shall notify the Forwarder in writing in the manner provided for the submission of a Request in clause 1.2 of the Contract. The notice of cancellation shall state the date and number of the approved Request being cancelled and, where the Request is cancelled only in part, the number of units of rolling stock (the weight of the cargo) concerned.

On the basis of the notice of cancellation received, the Forwarder shall refund the amounts received in proportion to the extent of the cancellation. If, by the time the notice of cancellation is received, the Forwarder has made advance payments towards the planned carriage (payment of rail and other tariffs, payment for the services of the forwarder's agents, payment for other services or advances for other expenses connected with the planned carriage), settlement with the Client for the refund of the amounts received, in proportion to the extent of the cancellation, shall be made only after the Forwarder has completed the corresponding settlements with third parties and recovered the amounts it paid towards the carriage that did not take place.

5. LIABILITY OF THE PARTIES

5.1. The Parties bear property liability under the Contract in accordance with the rules of Russian law.

5.2. The Client is liable, including in property terms, for losses caused to the Forwarder by improper securing of the cargo in a container or wagon, and by incorrect or inaccurate information stated by the Client in the transport and accompanying documents.

The Client shall reimburse the Forwarder's expenses in the amount of five times the rail tariff if a fine is imposed on the Forwarder for incorrect information stated by the Client in the Request or in the accompanying documents.

5.3. If invoice payment deadlines are missed, the Client shall pay a penalty of 0.05 per cent of the invoice amount for each calendar day of delay, where the Forwarder makes a corresponding demand.

5.4. The Forwarder is not liable for damage to the cargo inside a container or wagon caused by the properties of the cargo itself, defective packaging, or failure to observe the conditions for stowing and securing the cargo in the container or wagon laid down in the Rules for the Carriage of Goods by Rail in General-Purpose Containers and Wagons.

5.5. In carrying out the carriage, the Forwarder is not liable for the condition of cargo that arrives at the Client in sound vehicles or containers with intact seals.

5.6. If the Client fails to perform, or performs improperly, its obligations under the Contract, the Forwarder is entitled to suspend the performance of its own obligations under this Contract.

5.7. If circumstances arise that prevent the services under this Contract from being provided — such as a refusal by railway stations or sea and river ports to accept the cargo for reasons attributable to the Client or its counterparties (breach of the rules, standards and GOSTs governing loading, unloading, carriage, transhipment, storage, insurance and the preparation of consignment documents, or failure to perform other obligations under this Contract), or detention of the cargo for those reasons by customs, border or other cargo control authorities at port stations — the Forwarder is released from performing its obligations under this Contract, and the Client is liable for the consequences of such circumstances and shall reimburse all expenses incurred by the Forwarder as a result.

5.7. If the Parties engage third parties to perform work, each Party is liable for the performance of work (provision of services) and other actions under this Contract by those persons as for its own actions.

6. FORCE MAJEURE

6.1. The Parties are released from liability for the partial or complete failure to perform their obligations under this Contract if it results from circumstances of force majeure and those circumstances directly affected the performance of this Contract. The Parties' obligations are reinstated once the force majeure circumstances cease. The Party for which performance of its obligations under the Contract has become impossible shall notify the other Party of the onset and the cessation of the above circumstances within 5 days by fax, email or telegram. Otherwise, that Party forfeits the right to rely on those circumstances.

7. SETTLEMENT OF DISPUTES

7.1. The relations arising out of this Contract are governed by the law of the Russian Federation.

7.2. All disputes arising in the course of performance of this Contract shall be settled through negotiations.

7.3. All disputes, disagreements or claims arising out of or in connection with this Contract, including those concerning its performance, breach, termination or invalidity, shall be settled by the Commercial Court of the City of Moscow.

8. CONFIDENTIALITY

8.1. All information provided by the Parties to each other under this Contract is deemed confidential. The Parties shall take all necessary measures to prevent its disclosure to third parties.

8.2. Information may be disclosed to third parties only where they are engaged in activities that require knowledge of such information, and only to the extent necessary to achieve the relevant aims and objectives.

9. TERM OF THE CONTRACT

9.1. The Contract comes into force on the date of signature and is valid until 31 December 20___, and as regards settlements until they are fully completed. If neither Party gives notice of termination at least 30 calendar days before that date, the Contract is extended for each subsequent calendar year on the same terms.

10. MISCELLANEOUS

10.1. Any notices from the Client concerning amendments to the cargo documents are accepted only from the consignor named in the relevant fields of the Request.

10.2. In all matters not covered by this Contract, the Parties are guided by the current legislation of the Russian Federation.

10.3. All appendices and supplementary agreements to this Contract form an integral part of it.

10.4. While arranging the carriage of the cargo, the Parties exchange the necessary documents (Requests, invoices, etc.) on paper and also by facsimile or electronic communication; such documents form an integral part of this Contract and have the same legal force as it.

10.5. This Contract and the appendices and supplements to it are executed in 2 (two) counterparts of equal force.

11. DETAILS AND SIGNATURES OF THE PARTIES