to Act as Technical or Management Adviser
AGREEMENT is made at............... this... day of................ between M/s.
ABC Co. Ltd., a Company registered under the Indian Companies Act, 1956, having
its registered office at... hereinafter referred to as the Indian company of
the One Part and M/s. XYZ Co. Ltd., a Company Incorporated under the laws in
force in (Name of country) having its registered office at.....................
hereinafter referred to as the Foreign Company of the Other Part.
the Indian Company is carrying on the business of
manufacturing................. and owns a large factory/ factories
WHEREAS as the manufacturing process In the Indian Company's factories is
highly technical and complicated and the production turnover of the Indian
Company is very large and requires also administrative skill, the Indian
Company approached the Foreign Company, who is carrying on business at... as
technical and management advisers to different companies carrying on more or
less similar business all over the world for collaboration to act as technical
and management adviser.
WHEREAS after some negotiations the Foreign Company has agreed to act as the
technical and management advisers of the Indian Company on the following terms
and conditions and it is proposed to record the same in a formal agreement.
WHEREAS this agreement has been approved by the Government of India and the
Reserve Bank of India on the terms and conditions a copy of which is hereto
IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS. --
1. The Indian Company
hereby appoints the Foreign Company as the technical and management adviser of
the Indian Company.
2. The Foreign Company
agrees to depute Its technical and management experts not exceeding... in
number fully qualified as regards the business carried on by the Company to
advise the India Company as to the technical matters relating to the machinery
installed by the Indian Company in its factories at......... and relating to
-the quality of production as well as regarding the management of the
3. The Office of the
said experts will be at the registered office of the Indian Company
at.......... and the experts will attend to the office work during the Company's
working hours except when they are on a visit to the factories.
4. The Indian Company
will arrange for spacious residential accommodation of the experts befitting
their position and in a good locality of the city where the registered office
of the Indian Company Is situate at the cost of the Indian Company.
5. The said experts will
visit the factories of the Indian Company as and when they think necessary or
required but at least once in a week and the Indian Company shall make
arrangements for their overnight stays at such place or places.
6. The said experts will
also visit the factory or factories for giving advice and assistance whenever
required by the Indian Company or by the local manager of the factory.
7. The experts will use
and make available all their expertise in carrying on the production in the
said factories in an efficient manner and also make all suggestions for the
efficient management of the factories.
8. The Foreign Company
will make available all the know-how including all literature, formulae, drawings,
and other material to the said experts to enable them to advise the Indian
Company and to use their expert knowledge in solving any problem as to the
running of the machinery and plant and as to the manufacture of the products.
9. Apart from the
expenses required to be incurred for the residence and household purposes of
the said experts and their family members namely wives and children and their
travelling expenses, the Indian Company shall pay to the Foreign Company for
the services to be rendered by the Company and Its experts as follows (Include
the list of expenses).
personal expenses of the experts and their families for food and other normal
amenities shall not, however, exceed Rs.......... per month per expert. All
payments to be made by the Indian Company to the Foreign Company and its
experts will be subject to the approval of the Government of India and/or
Reserved Bank of India and will he made as stipulated by the said authorities.
10. If the Indian Company
feel that the services rendered by the Foreign Company and Its experts are not
satisfactory or necessary, the Indian Company will have the right to cancel
this agreement by giving to the Foreign Company three months' prior notice to
11. During the period of
this agreement the experts deputed by the Foreign Company will not give any
advice or other help or guidance to any other Company or person in India.
12. The experts deputed
by the Foreign Company will not be treated as the employees of the Indian
Company and will not be entitled to any of the benefits given to the regular
employees of the Indian Company. However the experts will be given off-time or
casual leave for such days and at such times as may be agreed upon between the
expert and the Managing Director of the Indian Company from time to time.
13. The Letter of
Approval issued by the Govt. of India herein recited and hereto annexed shall
be deemed to form part of this Agreement and if any term of this agreement is
found inconsistent with or contrary to any term and/or condition contained in
the said letter, the same will be treated as null and void.
14. The duration of this
agreement will be........ Months/years subject to what is herein otherwise
provided. The said period may be extended by mutual consent.
15. This agreement will
be treated as terminated on the happening of any of the events below mentioned.
a. If any party hereto
commits breach of any provisions of this agreement and the party who is alleged
to have committed breach is served with a notice by the other party three
months prior to the intended date of termination by the other party and the
former party has failed to amend the breach within the said period.
b. If any event happens
which will make the performance of this agreement impossible including any
force majeure event.
c. If either the Indian
Company or the Foreign Company goes into either voluntary or compulsory
liquidation according to or under the law by which it is governed.
d. If the parties hereto
mutually agree to terminate this Agreement.
16. All sanctions,
approvals, permissions, licences and other requirements of the Government of
India and of any statutory authorities required for giving effect to all the
terms and conditions of this agreement shall be obtained by the Indian Company.
17. In the event of any
dispute or difference arising between the parties hereto as to the rights and
obligations under this agreement or as to any claim, monetary or otherwise of
one party against the other or as to the interpretation and effect of any terms
and conditions of this agreement such dispute or difference shall be referred
to Arbitration of a common Arbitrator if agreed upon, otherwise to two or more
Arbitrators, one to be appointed by each of the parties to this agreement and
such Arbitrator shall be governed by the Indian Arbitration & Conciliation
Act, 1996. The venue for such Arbitration shall be................. in India.
18. The validity of this
agreement and the effect or meaning of the term hereof will be decided
according to the Indian Law.
19. Any communication by
one party to the other shall he made by registered post through airmail, with
acknowledgement due or by telex o fax or cable. In case the communication is
made by telex or fax or cable the same will be subsequently but immediately
thereafter confirmed b, written communication sent by registered post as
aforesaid. Any evidence showing the communication was posted or telex, fax or
cable communication was made will be sufficient to prove the posting or sending
20. In this agreement the
expression 'know-how' shall include technical information such as inventories
formulae processes, engineering and manufacturing skill, scientific data,
calculations,' specifications, drawings standards, sketches and all other
relevant information and knowledge.
WITNESS WHEREOF the parties have put their respective seals the day and year
first hereinabove written.
common seal of M/s. ABC Co. Ltd., is hereunto affixed pursuant to the
resolution of the Board of Directors dated................ in the presence of
Mr........................,a Director duly authorised in that behalf
common seal of M/s. XYZ & Co. Ltd., is hereunto affixed pursuant to the
resolution of the Board of Directors dated................. in the presence of
Mr................... a Director, duly authorised in that behalf.