Memorandum of Understanding for Dispute Settlement Agreement

This agreement is made and entered

on............................................................................between Siemens Pvt
represented by hereinafter referred to as “Siemens”, Ethiopia represented by
the hereinafter referred to as “Siemens PVt” on one side:
AND

Wale electromechanical contractor hereinafter referred to as on the other

part.

Whereas; Siemens and Wale had a sub-contract agreement based on the

contract agreement between Siemens and the EAE for the Airport Project.

Whereas; in connection with this sub-contract agreement the

parties ................................ .

Adress of the Compannies

Name of the Contracting Firm: Siemens Ethiopia

Address: Africa Avenue ( Bole Road ),
Friendship City Center,
7th Floor, P.O. Box 5505 Addis Ababa,
Representative: Mr. Eliab Tilahun

Wale Electromechanical Contractor

Sub contract amount

Mediation Form
1) This is a form of negotiation between the parties with the intervention
of a neutral third party, the mediator.
2) This mediator takes the parties through the process, listening to their
respective cases sometimes together, sometimes on their own with a
view to guiding them towards a settlement of their own making.
3) If one party fails to honor the terms of the settlement agreement the
only course of action open to the non-defaulting party is to sue on that
agreement,

Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor 1

 4) If a settlement is reached in Mediation it suffers from two drawbacks.
Neither party will necessarily get its legal rights and the settlement
may only be enforceable by suing on it.
5) If the parties agree, there is then a settlement by consent. It may be
oral, but it is obviously best if recorded in writing and, indeed, the
mediation agreement may say ‘no settlement until set down in writing
and signed etc.’
6) The courts can enforce a settlement agreement, as any other contract
- maybe as damages, but could be specific enforcement.
7) If one party fails to honor the terms of the settlement agreement the
only course of action open to the non-defaulting party is to sue on that
agreement, which admittedly should be quicker and cheaper than
arbitrating or litigating on the substantive issues in dispute.

Claim procedures followed

1) Instituted a court case against Siemens Pvt, for the payment of a sum
of Birr 420,000, dated………………(420,000 which inludes interim
payment and additonal exceted works not payed under the previous
installations)
2) The court issued ruling order to Siemens on ………….. Through a three
man mediators representing each parties. The third and chair mediator
will be chosen the other two. The nominated mediators
are..................................)

Ground for the mediation .

1. The court ruling and
2. following the parties verbal agrement to settle amicablly under cluase
36

Procedure and Agreed decisions

1) Along side the court ruling, now therefore, the parties have agreed to
settle their enforced court cases through amicable arrangements.
2) both parties met on March …..2009 and agreed mutually to solve their
differences through a private dialogue.
3) The parties agreed to bring the final stage to the selected mediators
named by the court.
4) The mediators prepared a final settlement agreement based on the
details reached by both parties
5) The parties will take the final agreed, signed and sealed document to
the court for final enforcement.
6) The court ruling thereafter will be binding on both parties.
7) Before court appearance it is agreed by both parties to bring to end
and finalize any standing technical issues.
8) The only outstanding issue resulting from this mutual agreement shall
be only the final payment due to Wale.

Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor 2

 9) Siemens shall pay any agreed outstanding amount indicated in this
document in bank checque payable from account held by the court.
10) The bank seeing to the court release order is authorized to pay
the amount approved in checque.
11) Any outstanding rectification works for works Wale completed to
make redy for provisional acceptance terms.
12) The details of the communication did existedhave beenprivately
analyzed by both parties and here mnot included as attachment
13) This dispute settlement shall not relief both parties from any
responsibilities stated in the contract agreement until the final
acceptance day.

Conclusion

Both representatives conducted a meeting in the Siemens manager office on

the issues that brought the disagremnt
on ..........................................................

Initial Claim by Siemens and The Contracting parties have been thorouly
investigated acording to the Contract agreement signed, technical
specification and drawings submitted to the parties.

Accordingly, both parties have agreed that, after signing of this Settlement
Agreement Wale to have no other claims out of or in connection with the
subcontrsct Agreement or any right to institute a case against Siemens Pvt in
this matter.

This Settlement Agreement shall enter into force on the date it is signed by
the duly representative of the parties to this agreement and it is signed in
three originals.

In witness thereof the parties have affixed their signatures hereinunder in the
presence of witness.

Siemens Pvt Ltd Wale Engineering

represented by Mr. represented by Mr.

Date: Date:

__________________ ________________________

Witness

1.
2.
3.

Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor 3

 Attchments

Claims by Siemens and Wale Initial Claims Accepted Dropped WALLE'S Initial COMMENT Final Response

Siemens WALE Rmark 1 Remark2

1 Damaged and Lost Items

1 Siemens to contact EAE for posible future

. Damage to 3 shallow bases at APH 5,5 5,57 - OK, but bring the whole shallow use as spare, if accepted to by EAE deduct
1 25( no3@150€@birr12.39) 75.50 5.50 base the cost.

1
. Transformer 150W lost for APH 2,3 2,38 - OK, but handover document if Siemens can verify by the receiving
2 Mast(no1@2378.0 birr each) 87.68 7.68 where? document Wale pays

1 Transformer 300W damage on

. earthling terminal (no1@3118.31 3,1 3,11 - OK, but handover document it was installed and operational. It is agreed
3 each) 18.31 8.31 where? Seiemens verify on field
Siemen claimed 15 out of the 43. now
agreed further to verify that the damage
Lost Primary connectors or wrong whther due to wale workmanship. But Wale
1 installation (10 add. connectors of - Not Acceptable. Am I handed over affirmed that he already lost for a complete
. total 174 are considered) 4,7 and lost it, if so handover document rinstalltion cost so Siemens should drop its
4 no15@birr316.27) 44.05 4,744.05 where? case

1 Damaged Cable and repair for 2

. positions 15kV( 2no@130 - I have done that, but why are you
5 €@12.39 rate each) 3,221.40 charging me Euro 130 a kit?

1 - I can cooperate if you ask me but

. Receipt for Drilling Machine 3,0 I am not responsible as you have no
6 outstanding 00.00 3,000.00 evidence. WALE agreed to present

Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor 4

1
. Cable Lugs purchase missing 3 - I was buying from my pocket tape
7 receipt 00.00 300.00 therefore I can't refund anything Siemens dropped the Case d

2 Rectification and relocated Works

1) if the contractor has objected the rainy effect on the
slot at the time of installation ? 2) recent site order given
to Wale and if h has refused to do so? 3) the contractor
should have taking into consideration the traffic cases )
2 rectified and promptly informed the client after wards.
. Rectification work for slots (labor) 5,6 - when material arrive? (Aug 7) But Wale Agreed as the contract Clause
1 (meters87.62@ birr65 each) 95.30 5,695.30 check if he delayed …………….inforcemen

2 Rectification of exposed secondary

. cable at edge of asphalt(50m@ 1,2
2 birr25 each) 50.00 1,250.00 - OK but evidence

2 Rectification work for APH lights 1) Ato Getachew fixed the bulbs where beforehand WALA
. 300m barrette 07(300metres @ 9 aligned the light REH so why? 2) who finally did the job?
3 LS ) 48.45 948.45 what is this? Siemens dropped the Case d

2 Rectification work Fixing of 12

. Runway End Lights(no12@birr216
4 each) 2,592.00 what is this? Siemens dropped the Case d
you owe
2 Rectification work on wrongly me
. installed connectors (no174@ 17,4 17,400.0 - infact you are the ones you owe 174X25bi
5 birr100 each) 00.00 0 me 174X25birr rr Siemens dropped the Case d

2 Realignment of 7 Light REH

. between Taxiway E and D( no7@ 3 35
6 birr 50 each 50.00 0.00 - OK Wale Agreed as the contract Clause
1) Siemens by the own will started the
collection and damping of the wastes
Agreed requiring early completion clearing the area
on to make free air traffic movement, 2)
figures in Siemens did the job at its own sped and
bewtwee staff. But should the contractor did the work
2 n the two after the main work completion the day will b
. 5,0 2,94 proposal much les the than indicated in the claim by
7 Wastage collection from site 40.00 1,980.00 0.00 - I have done this job myself s Siemens.

Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor 5

 -
B Claims by Wale 47,959.49

5,97 Siemens and Wale agreed to call a meeting and get the
1 cost of additional sand and gravel 5,970.00 0.00 check letter final approval

unit price addtional sand 5,77

2 231m3@birr25= 5,775.00 5.00
Payment regarding unsolved Variation submitted to EAE,
Siemens should to take the initiative to communicate
promptly with EAE for approval.
The final differentiated measurements shall be disclosed
and make the payment accordingly to wale. Wale

3 Old Duct Clearing variation No 8 40,275.00

Siemens earlier received payment for normal soil
condition. Wale claimed for rock condition and Siemens is
expected to push for final approval from EAE
Siemens and Wale working for the approval. shall reply
responsively to additional Informations required to help
4 Variation no 9 45,902.34 facilitate the approval by Siemens to EAE

4 Others

Wale agreed to renew. Siemens facilitates the process

Performance bond guarantee required by the surety office.
1 renewal 10% the contract price as per the sub contract agreement
5 % from the PAC payment shall be deducted shall be
deducted
as per the sub contract agreement
2 Retention 5%

both share the responsibility

3 PAC & FAC responsibilities as per the sub contract agreement

Share of liquidated damage if any until now EAE has not booked any claim if so
4 by EAE if any as per the sub contract agreement

Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor 6


for damage on Main Distribution
Board (Contract price
5 650.000Birr@10%
Damage on low voltage cable from
6 MDB to Old terminal
1 Damaged Cable and repair for 2
0 positions 15kV
7 Bricks taken from EAE (1200 pcs)
1 Receipt for Drilling Machine
1 outstanding
1 273,732.3
2 Payments
Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor
- damage acknowledged but I have rectified and will
rectify any problems therefore you shouldn't hold my
65,000.0 payment
65,000.00 0 declined to withhold the amount at PAC level
any thereafter damage shall be rectified by both parties
and identify the problem
Wale confirmed the initial proper 1) even if connected to the terminal it is not
installation. Siemens functional( one line) already AAAAPE claimed to be
acknowledged. corrected and needs to investigate who is responsible?
to be seen monitored the PAC period
during excavation labors of WALA identified it and
installed and until now functional repaired in what form was the repair? Is it to standard?
to be seen if any claim is forwarded from the property
- No one have asked for it owner.
yes I will bring said WALA wale should produce and submit the receipt to Siemens
-
1st payment 0 OK
-
400,000.0
2nd payment 0 OK
7
Settlement_Agreement_between Siemens Pvt_Wale Electromechanical Contractor 8