Table of ContentsI.Overview of the partner country''''s economy...41.Basic information:...42.Saudi Arabia’s economic situation...5II.Analysis of economic sectors with the strength of Saudi
Overview of the partner country's economy
Basic information
- Country name: Saudi Arabia - Capital: Riyadh
- Location: Saudi Arabia is a sovereign Middle East nation, occupying the central region of the Arabian Peninsula in Southwest Asia Saudi Arabia is bordered by 8 nations:
Jordan, Iraq in the North; Kuwait, Qatar, Bahrain, and United Arab Emirates in the East; Oman and Yemen in the South The Persian and Oman Gulf is in the East and the Red Sea is to the West of Saudi Arabia
- Climate: There are three climatic zones in the kingdom:
Steppe along the western highlands, forming a strip less than 100 miles (160 km) wide in the north but becoming almost 300 miles (480 km) wide at the latitude of Mecca.
A small area of humid and mild temperature conditions, with long summers, in the highlands just north of Yemen
- Population: Approximately 37.042.108 (5/9/2023) - Land Area: 2,149,690 km²
- Official Language: Arabic - Ethnic Group: 90% Arab; 10% Afro - Arab - Currency: Riyal (SAR)
- Institution: Saudi Arabia is a monarchy Saudi Arabia is governed according to Islamic Law, a Basic Law connecting the rights and responsibilities of the government promulgated by royal decree in 1992.
Even though about half of the Kingdom’s workforce of 13 million is expat, business culture in Saudi Arabia dances to a decidedly local tune Most decision-makers are Saudi and people doing business can expect unrivaled Arabian hospitality, canceled appointments, cordial chat, and hard bargaining in equal measure Flexibility, open-
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Group 6 – Class: 47K01.4 mindedness, and a calm demeanor are essential when going into battle for business in Saudi Arabia.
Meetings and office environments in Saudi Arabia, while business-like, tend to be flexible and cordial affairs Meetings likely have no agenda (or anyone to take minutes) and don’t take it personally if the appointment starts late, or they cancel it at the last minute.
When it comes to the business end of negotiations, Saudi thinking becomes hard to read Communication becomes more about body language and other non-verbal cues.
Saudi Arabia’s economic situation
Figure 1: Saudi Arabia’s Industry Sector (2021)
- Agriculture: 2.3% GDP, 2% employment (geographical and climatic constraints -> import most of agriculture and food products) Since 5% of the country is desert or semi-desert, only 1.45% of the land is cultivated.
Here are some of the largest desert areas, and this is a sign of an unfavorable climate for agricultural development.
Group 6 – Class: 47K01.4 - Industrial: 45.5% GDP, 25% employment (Dominated by non-manufacturing activities
– oil drilling – accounts for 87% export and 70% government revenues) The crude oil field in Ghawar can pump 4.77 million times the Olympic pool (the tank's capacity is about 2.5 million liters of water) This is the world's largest crude field, with an estimated 75 billion barrels of crude oil still waiting to be mined.
Saudi Arabia's oil and gas sector totalled $335.4 billion, contributing 45% of GDP, more than the total GDP of Morocco, Rwanda, Tonga and Iraq.
- Services: 52.2% GDP, 73% employment (Dominated by tourism, financial and banking services and the insurance sector)
A significant portion of the country's GDP is contributed by sectors such as construction, real estate, and tourism, which are heavily reliant on government spending, primarily funded through oil revenues Saudi Arabia boasts a wealth of attractions, including historical and religious monuments, coastal resorts, archaeological sites, world heritage locations, and ecotourism destinations Tourism plays a vital role in the Saudi Arabian economy, serving as a major source of revenue. b Some Economic and Trade indexes in Arab Saudi:
Table 1: Economic and Trade indexes in Saudi Arabia
Global Competitive Index: 39/140 (2020)Corruption Perceptions Index: 54/180 (2020)Economic Freedom: 83/ 180 (2020)
Analysis of economic sectors with the strength of Saudi Arabia
Saudi Arabia´s Main Exports
Group 6 – Class: 47K01.4 Saudi Arabia is home to the Muslim world’s holiest cities and also some of the world’s most extensive oil reserves It remains one of the foremost powerful countries in the Middle East by virtue of controlling vast oil fields, having the most land mass in the Arabian Peninsula, and having considerable military might compared to other countries in the region In 2021, Saudi Arabia was the number 18 economy in the world in terms of GDP (current US$), the number 26 in total exports, the number 32 in total imports, the number 39 economy in terms of GDP per capita (current US$) and the number 31 most complex economy according to the Economic Complexity Index (ECI).
Unlike the United Arab Emirates that has diversified their economy to rely less on their oil reserves Saudi Arabia focuses most of its energy on very specific exports including: a Crude Oil:
The country is heavily reliant on crude petroleum exports to sustain the country’s GDP Saudi Arabia has 18% of the world’s known oil reserves and is the world’s largest exporter of the commodity In fact, petroleum makes 70% of their export revenue and according to the Organization of Petroleum Exporting Countries (OPEC) the nation produced an average 10.3 million barrels of crude oil per day out of which 7.4 million barrels were exported per day Much of what the country exports is oil in its crude form
Figure 2: Main oil importers of Saudi Arabia
The main oil importers of Saudi oil include China which takes 13.6%, followed by Japan with 11.3%, India with 10.7%, the United States takes 9.8% while South Korea takes 9.1% and Singapore 4.7% Their total export revenue is approximately
$182 billion and crude oil is the major contributor to that figure. b Refined Petroleum:
Saudi Arabia keeps some of the oil it produces to refine it into oil products including diesel, fuel oil and gasoline which it not only uses domestically it also exports to other countries The Saudis exported $26.2 billion worth of refined petroleum oil products amounting to 3.3% of the total refined oil exports worldwide However, it still remains among the 15% top exporters of refined petroleum products globally.
The reason for this may be because the Kingdom of Saudi Arabia is reducing the amount of crude oil it’s producing They also consume a lot of their own refined oil products to run their industries since they are wholly reliant on oil and its products to run manufacturing, production and assembly plants all over the country. c Propylene Polymers:
Group 6 – Class: 47K01.4 Among the countries that Saudi Arabia exports Propylene polymers are China and Turkey To Turkey the revenue generated in 2018 from the exportation of propylene polymers was $853 million and from China it was $379 million in the same period.
Other significant markets for Saudi propylene polymers include neighboringUnited Arab Emirates and Kuwait as well as Singapore, India, Italy, Mexico,Germany and Egypt Propylene polymers are the 84th most traded commodity in the world market and Saudi Arabia tops the list as the biggest exporter of the commodity.
Saudi Arabia´s Main Imports
Vehicles are a major import commodity in Saudi Arabia making them the leading import product in the country Even though the import of cars fell by 20.5% in 2018 the figures were still impressive reaching 440,922 units The Kingdom of Saudi Arabia imports everything from four-wheel drives that are reliable in the desert landscape to sedans, heavy duty trucks vehicles, buses and cars for disabled members of society True to form is one of the Middle East’s leading importers of vehicles across its multiple ports.
Saudi Arabia has access to over 400 million customers for the vehicles they import not only domestically but all over the MENA region which comprises the Middle East and North Africa The MENA region comprises 17 countries and since the nation is a signatory to the Greater Arab Free Trade Agreement (GAFTA) this allows them to do business in the area duty free This is another revenue channel for the Saudi government as they currently have monopoly of the vehicle market in the region They use Ro-Ro cargo although some affluent people prefer containers for some of their more expensive vehicles. b Pharmaceuticals:
Saudi Arabia spent $5.53 billion in 2018 on pharmaceutical imports The country accounts for 59% of the Gulf region’s imports of pharmaceuticals and by
Group 6 – Class: 47K01.4 2023 they are expected to be importing $8.5 billion worth of pharmaceuticals as their medical industry continues to grow.
The country’s vision for 2030 is to grow the public and private sector and develop the life sciences industry and pharmaceuticals The country is only able to produce 30% of their pharmaceutical products locally and their growing population is one of the reasons why they have such a high need for the importation of pharmaceuticals.
They have tapped into the generic market in order to keep up with supply for their domestic demand American, European and Indian companies have established a presence in the country to tap into the domestic demand and they are already producing antibiotics, treatment for diabetes, anticoagulants and cardiovascular drugs The country is opening its doors to such companies that will help it mitigate their need to import by creating all types of drugs from vaccines toAP.
Saudi Arabia´s Technology
Saudi Arabia is rapidly emerging as a robust ecosystem for digital entrepreneurship The Kingdom has developed a deep understanding of leveraging digital transformation and magnifying its impact The country’s conscious effort to progress has contributed to becoming a tech hub of the future.
Published annually by the World Intellectual Property Organization, the Global Innovation Index (GII) ranks countries based on their innovation capabilities and outcomes Saudi Arabia has been making significant investments in innovation, with a focus on developing its technology and knowledge-based economy The country's Vision 2030 plan includes a strong emphasis on innovation and technology, which has helped boost its rankings in the GII by 15 places in 2022
Saudi Arabia has recently launched several initiatives aimed at making the country one of the most technologically advanced in the world by investing heavily in building an innovation ecosystem to bring digital transformation to its operations, aiming to build a culture of innovation.
Saudi Arabia boasts an impressively young and tech-savvy population of 33 million, positioning the country to become the Silicon Valley of the Middle East Two-thirds of the Kingdom's population are under the age of 35 This offers a great opportunity for technology to embed itself in the nation’s progress as the population has a strong appetite for digital services, making it attractive to investors.
Saudi Arabia has attracted more than $9 billion in investments in future technologies.
The Saudi government created an environment conducive to innovation This includes investing in research and development, establishing supportive policies, and creating a culture of innovation within the government itself.
One example of Saudi Arabia's investments in the tech future is the Saudi Vision Cable, which spans 1,160,000 meters and is the first ever high-capacity submarine cable in the Red Sea.
Saudi Arabia has also recently inaugurated one of the largest and most significant projects to date: Center3 Company, the new digital regional center for the Middle East and North Africa (MENA) The company will serve as the owner of all stc Group digital infrastructure assets, including data centers, submarine cables, international points of presence, and internet exchange points.
The relationship between Saudi Arabia and Vietnam
Group 6 – Class: 47K01.4 Date of establishment of diplomatic relations: October 21, 1999.
Political relations: Vietnam opened its Embassy in Riyadh in April 2007, Saudi Arabia opened its Embassy in Hanoi in December 2008. a Trade relations between Vietnam and Saudi Arabia:
Saudi Arabia is one of the economies with the largest scale in the Middle East region of Asia, and is one of the largest partners with Vietnam with two-way trade turnover in 2022 reaching $2,7 billion (Increased 32,4% since 2021) The structure of trade between the two countries is mutually beneficial, as the primary export goods of each country do not conflict with each other Vietnam primarily exports natural goods to Saudi Arabia, including coconuts, nuts, cashews, and fish filets, alongside electronic products, footwear, and wood products In return, Saudi Arabia exports abundant resources such as raw plastic materials (Ethylene Polymers, Propylene Polymers, etc.), liquefied natural gas, chemicals, and fertilizers to Vietnam.
Figure 4: Proportion of import-export turnover with Saudi Arabia compared to Vietnam's in the period 2014 – 2018
Saudi Arabia plays a significant role as a trading partner for Vietnam within theMiddle East region In recent times, Vietnam's economic and trade collaboration with Saudi Arabia has displayed encouraging progress Vietnam and Saudi Arabia
Group 6 – Class: 47K01.4 also share a strong bond, as evidenced by their diplomatic relations since 1999.
Over the years, the two countries have consistently supported each other in international and regional forums One of the agreements that symbolizes this relationship is the Agreement on Avoiding Double Taxation, which was signed in April 2010 Moreover, an increasing number of Saudi Arabian enterprises have shown interest in and a desire to enhance cooperation with Vietnam in various fields, including trade, investment, energy, seaports, Halal food, tourism, and innovation in recent years. b Investment relations between Vietnam and Saudi Arabia:
Vietnam and Saudi Arabia are two dynamic and developing economies in the Southeast Asian and Middle Eastern regions, both undergoing significant economic restructuring towards modernization and sustainability, which is why Saudi Arabia is the 79th largest investor in Vietnam, and many large Saudi Arabian conglomerates and investment funds have effectively implemented numerous direct and indirect investment projects in Vietnam, particularly in the real estate, energy, and steel sectors A notable example is the pioneering Zamil Steel project (steel production), which has enjoyed a successful 25-year journey and continues to thrive Not only that, the Saudi Fund for Development has also funded preferential loans to 13 Vietnamese projects.
In conclusion, the relation between Vietnam and Saudi Arabia is not just marked by economic cooperation, but also in many more fields and factors And this both- way relationship creates various opportunities and values for both countries The bond between these two nations has evolved over the years, with both Vietnam and Saudi Arabia consistently supporting each other So it is important for each party to further develop and tighten this bond, and use this as an opportunity to overcome the obstacles in the international market. c Labor cooperation
- Vietnam began sending laborers to work in Saudi Arabia in August 2003, but significant development in this labor export sector occurred after the Vietnamese government agreed to expand the program in late 2006.
Group 6 – Class: 47K01.4 - By the end of 2019, approximately 10,000 Vietnamese laborers were working in Saudi
Arabia, mainly in sectors such as construction, industry, and services.
- The family assistance program was the most attractive sector for Vietnamese export labor, with over 8,000 workers involved, according to the Overseas Labor Management Department.
- Starting from 2020, due to the complex developments of the Covid-19 pandemic, labor export activities from Vietnam to Saudi Arabia had to be temporarily suspended.
While this is an opportunity for Vietnamese labor, there are still various challenges and concerns, including geographical distance, cultural differences, climate, language This is still a field to be exploited for mutual benefits between two countries. d Cooperation in tourism:
Saudi Arabia is one of the wealthiest countries globally, and its citizens have a significant interest in tourism, with around 10 million citizens travelling abroad annually prioer to 2020 (Their tourists primarily favored locations in South Asia).
However, Vietnam's limited visibility in the Saudi Arabian market is attributed due to the lack of promotion and tourism offerings And the potential of the tourism factor of Vietnam has not been fully realized. e Cooperation in the field of culture and society:
Saudi Arabia supports Vietnam’s cultural and social development alongside with economic cooperation:
- The SFD is involved in rural infrastructure projects in certain Vietnamese regions.
- Saudi Arabia offers favorable loans through the Saudi Economic Development Fund to support impoverished areas in Vietnam.
- Saudi Arabia provides sponsorship and support to Vietnamese people affected by floods and the Covid-19 pandemic.
- Cultural exchange activities between Vietnam and Saudi Arabia have been intensified,including the organization of Vietnam Cultural Days in Saudi Arabia in February 2019,with the assistance of the King Abdulaziz World Cultural Center.
Group 6 – Class: 47K01.4The SFD has funded prefential loans to 13 different Vietnamese projects ($14.5 million in Phu Yen project; $22.6 million in building 4 communes in Quang Tri province; $25.5 million for medical equipment for a general hospital and a health center in Bac Kan, )
Evaluate companies in the food industry, select partners (with backup choices)
Market potential for cashew nuts in Saudi Arabia
Saudi Arabia is the largest agricultural market in the GCC region Due to population growth, increase in people's income levels and high presence of supermarkets and hypermarkets have increased purchasing power and access to agricultural products However, due to climate and harsh conditions, the agricultural industry here is not very developed, only 1.5% of the land area can be cultivated Saudi Arabia has to import most agricultural products and food, and this is a good opportunity for agricultural products Vietnam approaches this market.
Figure 5: Correlation between GDP and cashew consumption volume of Saudi Arabia
Group 6 – Class: 47K01.4 Vietnamese agricultural products are now present in the Kingdom of Saudi Arabia, including typical products such as: rice, tea, pepper, cashew nuts, fruits, With cashew products, Saudi Arabia Saudi Arabia is the largest cashew consuming country in the Middle East region Cashews are considered a luxurious snack and are used as an ingredient in many traditional dishes In addition, cashews are often used as toppings on desserts and as cake ingredients The use of cashews in savory dishes is also growing significantly, helping to bring attractive flavors to dishes rice like Kabsa or Mandi Consumption is boosted when cashew prices in 2023 are still about 20% lower than the 5-year average price In the Middle East, at a lower price, cashews are used to partially replace other food items, such as meat
Figure 6: Kabsa Rice Figure 7: Mandi Rice
Another factor contributing to the growth in demand for cashews in the region is that consumers in the Middle East are also becoming more health conscious and some are choosing to add more plant-based protein to their diets The return of tourism after the pandemic has brought another boost to consumption, as cashews are offered as snacks and ingredients in gourmet meals at tourist establishments.
Group 6 – Class: 47K01.4 Vietnam and India are the two countries that process up to 80% of the world's cashew nuts The Middle East (mainly Saudi Arabia) imported 84,900 tons of cashew nuts in 2022 During the first 4 months of the year In 2023, the Middle East region's cashew nut imports from Vietnam will reach 17,190 tons, up 22% over the same period last year
Figure 8: Cashew imports (January to April 2022, 2023) of the Middle East from Vietnam and India
Figure 9: Vietnam's cashew export situation to Saudi Arabia (2015-2021)
In recent years, the value of cashew exports from Vietnam to Saudi Arabia has tended to increase rapidly, especially in 2021, the export value of this item has exceeded 38 million USD, more than 6 times higher compared to 2015.
Tariffs and basic regulations of imported cashew nuts in Saudi Arabia
In Vietnam, regarding export taxes, both VAT and export taxes for cashew nuts are exempt.
Group 6 – Class: 47K01.4 In Saudi Arabia, import tax for cashew nuts remains at 5% and is not subject to the New Tax Increase Regulations Import valorem tax is levied on the CIF value.
Saudi Arabia complies with the WTO customs valuation agreement (Article VII of GATT), which regulates customs valuation methods Imports are subject to customs surcharges, port fees, cargo service fees and import inspection taxes. b Basic regulations:
Cashew nuts should meet specific quality and safety standards established by the SFDA These standards may include limits on pesticide residues, aflatoxin levels, and other contaminants It's essential to ensure that the cashew nuts you intend to import comply with these standards.
Cashew nuts exporting businesses need to meet standards-compliant products and services due to Halal certification – Halal standards Halal certification does not address the technical factors, i.e no quality requirements, only the manufacturing process, raw materials must meet the requirements of Halal.
Therefore, businesses that have been granted HACCP or ISO 22000: 2005 will be easier to obtain Halal certification.
Country of origin (CoO) must be indicated on all imported goods by Arabic or English unless impracticable because of size or nature of the goods In such cases, the items may have a country of origin clearly stated on the packaging or box CoO must be specified in a way that cannot be broken and destroyed, whether by printing, engraving, embossing, sewing or other permanent methods Shipments that do not comply with CoO requirements may be re-exported or destroyed at the importer's expense In certain cases, shipments that do not comply with CoO requirements may be corrected by the importer in customs or warehouse within two weeks, subject to payment of a fine.
- Regulations on packaging and labeling
Packaging and Storage: Cashew nuts should be packaged and stored in a manner that ensures they remain safe, withstand handling rough, high temperature and high humidity and afford protection against pilferage and free from contamination during transportation and storage
Labeling: Imported cashew nuts must adhere to Saudi Arabia's labeling requirements Labels should be in Arabic or include an Arabic translation and should include information such as the product name, ingredients, manufacturing and expiration dates, and nutritional information.
Marking requirements: according to SASO standards or applicable Regional or International Standards (e.g IEC / ISO / GSO / EN /ASTM) in Arabic or English.
All signs relating to warnings and safety instructions must be in Arabic or Arabic and English Instructions for use or leaflets must be in Arabic or in both Arabic and English.
- Refer to other regulations at: Link 1 Link 2,
Evaluating the companies in the cashew product industry
Company Reven ue Business activities
1 Cropses Foodstuff Trading CO LLC - Saudi Arabia https://cropses.com/
Specialized in supplying the highest quality food products such as nuts, seeds, spices, and more in their varieties.
Cropses works closely with suppliers from
To continue to offer the finest products for our suppliers and to be strongly present in the Gulf market, supported by an excellent client service team and a set
Pros: One of the famous spice and nuts trading companies.
Cons: Its products focus more on a wide range of almonds than cashew nuts.
USA, China, India, Turkey, Indonesia, Vietnam, and others around the world to distribute products in the
European market The company is well- connected with producers, growers, retailers, and distributors from around the world, offering top-grade products from their country of origin. of ethics that makes every deal a success project, for us, our partners, and customers, as well. activities are mainly in the
Europe, so the branch in Saudi Arabia only accounts for a small market share.
2 Al Jameel International Group http://aljameelfood.c om/
Headquartered in Jeddah, Saudi Arabia with over 500 dedicated employees The company focuses
Vision: To be the pioneer in providing ready-made and processed food products
Pros: One of the most important leaders in wholesale trading of nuts,spices, pulses,
Group 6 – Class: 47K01.4 on the distribution of products, including nuts, spices, pulses, coffee, with an annual trade quantity of
100,000 tons It imports goods from more than 50 countries worldwide and channeled into various sectors, serving wholesalers, manufacturing facilities, retail companies such as supermarkets, and numerous other clients. to meet the needs of the community and customers locally and internationally.
Providing high quality food products superior to competitors and competitive prices that meet the needs and desires of the consumer through our qualified staff, and in line with our values and the values of our society.
The company has a considerable trade quantity of 100.000 tons annually with various partners including Vietnam.
Cons: Because the company has a very diverse product portfolio, cashew products only account for a small percentage, so the opportunity to export cashew nuts to the company will be difficult to achieve in large quantities.
DALLA FOR FOOD FACTORY CO
Bahrain Dalla for Food Factory was established in 1974, and has
Vision: To become a globally recognized
Pros: It is one of the leaders in the packed food industry
Group 6 – Class: 47K01.4 https://www.mehrab global.com/home grown to be one of the leaders in the packed food industry since.
They have a wide range of products including spices, coffee, lentils, nuts and tea etc.
The company sources the best quality dry roast nuts such as cashews, almonds and pistachio from countries such as India, Vietnam,
All products are supplied to a leading chain of hotels, restaurants and supermarkets in Bahrain and neighboring establishment, particularly by satisfying credible Safety and Quality Management requirements, such as GMP, HACCP and ISO
This is aimed at setting up a credible growth model that makes our products and services available throughout the globe.
Mission:To continue to provide world- class products and services for our clients and to secure a strong brand combined with many safety requirements.
The company also imports from many countries including Vietnam.
Cons: Due to the company's extensive range of products,cashew-related items make up only a modest portion.
Group 6 – Class: 47K01.4 countries presence in the region.
4 BAJA Trading Est https://baja.com.sa/
Baja was founded in 1997, Riyadh, Saudi Arabia It is considered one of the most important leading institutions in the production of all kinds of nuts
& coffee Baja is an industrial commercial institution that imports, produces, packs and sells nuts and coffee Baja has many branches and private outlets that sell and distribute its products to mini markets, supermarkets and
Vision: To be the top renowned food company in the MENA region.
Mission: To bring enjoyment to consumers at all the moments through premium quality everyday food.
Pros: It is one of the leading local companies that produces nuts, coffee, tea It has many branches so it can facilitate the delivery of large volumes of products, including cashews to its branches and outlets.
Cons: The company currently does not have products specifically for cashews, only cashews mixed with other types of nuts, so the number of imported cashew
Group 6 – Class: 47K01.4 hypermarkets nuts may not be large.
5 Bayara Saudi Arabia Limited Group https://bayara.com/
Bayara is one of the leading manufacturers of nuts, dried fruits and spices across the Middle East and Africa region They import natural raw materials directly from the best countries of origin and trusted supply chain partners across 45 countries The company processes around 23,000 Tons of goods every year by using the latest technologies and adhering to the highest global safety standards to preserve
Vision: To be the most trusted brand for your everyday cooking essentials & healthy indulgence.
Mission: To protect our existing business by securing and leading our core categories in terms of sales, quality, and innovation in every channel To develop our company through brand building, new product development in
This is the chosen partner.
Bayara is a subsidiary, 100% owned by Savola Group, listed on the NASDAQ stock exchange.The Savola Group is the largest corporation in the Arab foodstuff and retail sector The company will be evaluated in detail in the next section.
Group 6 – Class: 47K01.4 flavor and quality In 2021,
Savola Group, one of the largest food conglomerates in the MENA region. cooking essentials & impulse categories and territory expansion in the MEA region.
Table 2: Companies in the cashew product industry
Potential partner
General introduction
- Company’s name: Bayara Saudi Arabia Ltd - Founded year: 2017
- Address: New Industrial City 2 Riyadh, 11547 Saudi Arabia - Website: https://bayara.com/
- E-mail: info.bayara@savola.com - Brach: Food Manufacturing and Wholesale trade - Business products: Raw nuts, dates, seeds, dried fruits, sweets, cooking ingredients such as herbs, spices and legumes.
History of the company's formation
Gyma Food Industries was founded in 1992 Since then, they have strived to achieve newer heights and realized the potential of becoming one of the most celebrated brands in the GCC food industry within a span of 3 decades Bayara’s key channels are Consumer Goods, Shop in Shop & Food Service Bayara - the regional trademark, reflects and focuses on local markets highlighting the purpose of bringing natural ingredients from around the world to every table and building relationships with families through the love of genuine good food flavored with life.
Group 6 – Class: 47K01.4 - In 1992, Bayara was established in the UAE as Gyma Food Industries, selling healthy snacks including raw and nuts, dates, seeds, dried fruits, and sweets, along with cooking ingredients such as herbs, spices and legumes.
- In 2013, Gyma Food Industries rebranded itself using Bayara as a trademark and a brand name for the company Expanded Dubai Investment Park facilities from 6,000 sqm to 12,000 sqm.
- In 2017, Bayara entered the Saudi Arabian market, establishing Bayara Saudi Arabia Ltd, strengthening its footprint in the region’s biggest market.
- In 2021, The Savola Group, through its subsidiary Savola Foods Company, fully acquired Bayara Holdings Limited from Levant Capital and the other shareholders in an all cash deal amounting to $260 million, equivalent to approximately 975 millionSaudi Riyals This acquisition is a step towards realizing Savola Foods’ strategy to focus on value added growth and expansion opportunities in food categories, targeting the younger population.
Company size
Bayara was established in the UAE in 1992 as a trading company, has undergone substantial growth and expansion over the years The company had many facilities in Dubai Investment Park Riyadh, Saudi Arabia, reflecting its commitment to serving diverse markets With an employee base of more than1,000 dedicated personnel, Bayara has established a strong footprint, boasting over350 Shop in Shop counters Furthermore, the company's reach extends beyond its local borders, as it exports substantial quantities of products, including nuts, dates,and innovative spice mixes, to various destinations These exports span across regions such as Oman, Bahrain, East African countries, and even at the crossroads of Europe and Asia, primarily in Georgia.
Mission
- To protect the existing business by securing and leading the company’s core categories in terms of sales, quality, and innovation in every channel.
- Develop the company through brand building, new product development in cooking essentials & impulse categories and territory expansion in the MEA region.
Oriented development
To be the most trusted brand for your everyday cooking essentials & healthy indulgence, Bayara has always been improving the universal experience of eating,while always focusing on the importance of people and are committed to providing our best by demonstrating wellness in our consumer's lives The company's commitment to sustainable and environmentally friendly practices are an integral part of Bayara's DNA, as they continue to drive efforts towards the responsible sourcing of raw materials, ensuring that manufacturing and production processes utilize proper waste recycling methods.
Value and reputation of partners
Recently, Bayara has paid stronger attention to values related to consumer health, environmental responsibility, energy saving and partner friendliness The company has achieved famous food safety certificates:
With the scale and influence along with Bayara's commitments, it can be seen that this is a potential partner with great prestige and influence If Vinh Tam wants to gain deep access to the demanding Middle Eastern market, establishing a close trade partnership with Bayara is a wise thing to do.
Product information
- Name of product: Binh Phuoc cashew nuts.
- Name of company: Vinh Tam Pharmaceutical Limited Liability Company
According to the US Department of Agriculture, 100g of raw cashew nuts contain about 554 calories To be healthy every day, we should only consume a maximum of 120g of cashew nuts If consuming more than that, it may lead to unwanted weight gain.
Cashew nuts are good for the eyes:
Cashew nuts contain high levels of lutein and zeaxanthin, which act like antioxidants, so when used regularly, they will help protect the eyes from minor damage, especially for the elderly, and even reduce the risk of cataracts.
Cashew nuts improve muscle and nerve system health:
Cashew nuts are rich in magnesium, which is important for bone and joint development It also helps maintain blood pressure, helps maintain nerve function and keeps bones strong
Cashew nuts help improve oral health:
Phosphorus in cashews is essential for the healthy development of teeth and bones as well as assisting in protein synthesis, carbohydrate and fat absorption, and maintaining cell health.
Using cashew nuts helps reduce cholesterol accumulation in the gallbladder and helps prevent gallstone formation.
Cashew nuts help strengthen the immune system:
Cashews contain zinc which plays an important role in strengthening the immune system, fighting infections, synthesizing proteins and healing wounds Especially for
Group 6 – Class: 47K01.4 pregnant women, zinc also helps maintain a healthy body for the fetus and the first years of the child's life.
+Cashew nuts have weight loss effects:
Using cashews will help replace animal fats with monounsaturated fats and has helped control body weight and reduce fat and cholesterol accumulation Cashew nuts also contain antioxidants and vitamin E that help prevent aging, beautify skin and hair, and are very good for women.
Cashew nuts contain large amounts of monounsaturated fats, linoleic and palmitoleic acids Using cashew nuts every day will help lower cholesterol levels and eliminate factors that cause cardiovascular disease
In addition, cashew nuts also have other benefits such as: preventing and supporting cancer treatment, good for the brain and pregnant women,
- Vinh Tam’s commitments to quality:
Clean standard cashew nuts are harvested from the garden without going through intermediaries.
Committed to cashew nuts being drug-free and preservative-free.
The processing process is in accordance with food safety regulations.
Make sure the cashews are processed for enough time to help bring out the flavor, and have enough deliciousness.
Beautifully packaged unbroken whole cashews that can be given as gifts.
Reasonable price, ensuring the best market standard class 1 products.
Commitment to cashew nuts with silky skin, smooth kernels, even, crispy, not scorched, easy to peel.
Cashew nuts ensure standards of not being rotten, not damaged, moldy, absorbing cashew oil
Contract Analysis
This contract is made and signed on the date 15/09/2023 BETWEEN:
Company name: Vinh Tam Company Address: 122 Thanh Xuan 22 st, Thanh Xuan Ward, District 12, Ho Chi Minh City Fax (Tel): +84976 479 602 Email: thaoduocvinhtam@gmail.com Represented by: Mr Nguyễn Phi Hùng Position: Chief Executive Officer
Bank name: Vietcombank Account No: 0911000009837 Swift code: BFTVVNVX AND:
Company name: Bayara Saudi Arabia Limited Group Address: New Industrial City 2 Riyadh, 11547 Saudi Arabia Fax (Tel): +9714 8857478 Email: info.bayara@savola.com Represented by: Jean-Marc LOURAU Position: Chief Executive Officer
Bank name: Saudi National Bank Account No: 1234567891011 Swift code: NCBKSAJE101 In this Contract, Party A and Party B may be referred to individually as "Party" and collectively as "Parties".
The two Parties mutually agree to sign a Cashew Export Contract (“Contract”) with the following contents:
ARTICLE 1: NAME OF COMMODITY, QUANTITY, QUALITY, SPECIFICATIONS
1.1 According to the terms agreed in this Contract, Party A will deliver the goods as described below (hereinafter referred to as “Goods”) to Party B:
1.2 Name of commodity: HS 080132 Dried cashew nuts, shelled, crop 2022 1.3 Quantity: 5.000 Mts ± 5% max
Color: white, ivory white, light ivory, light yellow or light ash gray
Nut count: 180-200 Nuts/ Kg (min)
Defective: 0.25 % (max) 1.5 Specification applied and sampling procedure: according to VINACAS’ Specification of Dried raw cashew nuts in shells (version 2016, TCCS:01/2016/HHD)
Inspection company at the loading port (Cat Lai Port, Ho Chi Minh city) Name: AIM Control
Address: 9th Floor, 117 Nguyen Du Street, District 1, Ho Chi Minh City, Vietnam.
Inspection company at the discharge port (Jubail Commercial Port, Jubail city) Name: Saudi Food and Drug Authority (SFDA)
Address: Riyadh 13513 - 7148, Saudi Arabia Contact: +966112038222
ARTICLE 2: PRICE AND PAYMENT METHOD:
In figures:1500 USD/ Mt, CIF Jubail Commercial Port, Saudi Arabia Incoterms®
In words: One thousand and five hundred US dollars only per metric ton, CIF Incoterms 2010
Total value: 7,500,000 USD (In words: Seven million and five hundred US dollars only).
50% of the total contract price shall be paid as advance payment by T/T within 20 working days from the receipt of Commercial Invoice and Bank guarantee of 50% of the total contract volume.
50% of the balance shall be paid by D/P against Bill of Lading at arrival in Buyer’s port.
3.1 Specific payment methods are as follows:
Before delivery: The exporter gets an advance of 50% of the value of the shipment, equivalent to 3,750,000 USD (In words: Three million seven hundred and fifty thousand US dollars only).
After delivery: The importer only receives the documents and goods when completely pays 50% left of the shipment, equivalent to 3,750,000 USD (In words:
Three million seven hundred and fifty thousand US dollars only).
3.2 The seller must provide the following documents: a Full set 3/3 original B/Ls.
Each document below has to be presented in three copies: b The Seller's signed commercial invoice. b Certificate of origin issued by Vietnam Chamber of Commerce and Industry (VCCI) b Certificate of quality and quantity issued by the Manufacturer b Insurance certificate (all risks as prescribed in Article 8 of this Contract). b Packing list issued by the Seller. b A - Institute cargo clauses (ICC-A) insurance policy issued by Bao Viet Insurance Company
Party A shall discount on price for Party B upon occurrence of any of the following cases:
Outturn: lower than 01 Lbs : 1000 USD/ Mt lower than 02 Lbs : 600 USD/ Mt
Nut count: More than 01 : 11,0 USD/Nut/ Mt
Moisture: Higher than 01% : 1482 USD/ Mt
Defective: The defective goods shall be directly deducted on quantity of goods based on assessment results of an independent quality inspection company at the arrival port.
4.2.1 Party B has right to reject cargoes upon occurrence of any of the following cases:
Outturn: lower than 40 Lbs/ 80 kgs
Nut count: More than 10 Nuts/ kg
Moisture: Higher than 12 % 4.2.2 If anything in Item 3.1 of Article 3 (“Discount”) is occurred and Party A does not perform discount which leads to prolong in resulting further damages of goods as Item 3.2.1 of Article 3, orParty A has any other act of violation, Party B has right to reject the cargo; at the same time,Party A is obliged to resolve all issues relating to the cargo and has full responsibilities for the cargo, even if the cargo has been declared with Vietnam Customs and subject to ownership for Party B.
4.2.3 Party B has a right to reject the cargo according to Item 3.2.2 of this Article; however, depending on some circumstances, Party B can accept receiving goods and Party A has to discount and bear penalty and compensate losses and/ or other sanctions as prescribed by current legal regulation of Vietnam's Commercial Law.
ARTICLE 5: SPECIFICATION OF PACKING AND SPECIFICATION OF CONTAINER
New jute bag, steady, not torn.
No use of recycled bags ever containing substances which are unsuitable for food hygiene (e.g.fertilizers, chemicals etc).
Container has to be assuredly clean and not rusted.
ARTICLE 6: SHIPMENT MODE AND TIME OF SHIPMENT
6.1 Partial shipment: Not allowed 6.2 Tran-shipment: Not allowed 6.3 Delivery: + 5000 metric tons delivered before 01/11/2023 6.4 Loading time: Before 01/10/2023
6.5 Loading port: Cat Lai Port, Ho Chi Minh city, Vietnam 6.6.
Discharge port: Jubail Commerce Port, Jubail centre city, Saudi Arabia 6.7 Delivery terms: according to Item 1 of Article 2 (CIF @ Incoterms® 2010) 6.8 Shipping Documents:
Order Document name Quantity Language Remarks
1 Master Bill of Lading 3 English Issued by the shipping company.
2 Phytosanitary Certificate issued by Authorized official
2 English Issued by the competent authority of the country of origin.
7.1 The seller commits to charter a container ship from reputable ship owners in the market with temperature-controlled storage facilities, the ship's age is not more than 05 years.
7.2 Charter period: extend for 30 days, encompassing loading at the bustling port of Cat Lai, Ho Chi Minh city, Vietnam, and unloading at the bustling port of Jubail, Jubail city Saudi Arabia
8.1 The goods must be insured by a company legally established and capable of insuring all risks to the goods.
8.2 Risks covered: Any risk of loss or damage included in Insurance Clause A of ICC 8.3 Insurance period: from loading time to unloading time at buyer’s premise 8.4 Insurance conditions will be subject to Clause A of ICC
8.5 Insurance beneficiary: Buyer When a risk occurs, the claim is paid at Bao Viet Insurance company.
9.1 The seller must inspect the goods before delivery (1st inspection) All costs are borne by the Seller.
9.2 The second inspection is performed by the Buyer, all costs are borne by the Buyer.
9.3 If there is a difference between two tests, the result of the second inspection is decisive.
10.1 Within 10 days after signing the Contract, the Seller must open a guarantee contract with a value of 10% of the total fair value (750,000USD) stated in Article 2 of this Contract.
10.2 The contract performance guarantee is valid until 30 days after the end of the warranty period and will be returned to the Seller after expiration.
10.3 The guarantee will be issued by a Bank acceptable to the Buyer by way of an irrevocable and unconditional guarantee in a form acceptable to the Buyer.
10.4 All costs when opening the guarantee are borne by the Seller and the Seller must compensate and ensure to compensate the Buyer for these costs.
11.1 Rights and obligations of the Seller Seller reserves the rights to:
– Delivery as agreed in the Contract;
– Request the Buyer to receive the goods;
– Request the Buyer to fulfill payment obligations;
– Claim interest for late payment from the Buyer;
– In the event that the Buyer engages in actions that breach the Contract, the Seller is entitled to request the Buyer to fulfill the Contract, declare the Contract null and void, and demand compensation for damages according to the terms agreed upon by both parties in this Contract.
– Purchase insurance for the goods, rent transportation vessels as per the agreement in the Contract.
– Inspect the quality and quantity of the goods before delivery.
– Deliver documents related to the goods to the Buyer within the specified timeframe, location, and through the agreed-upon method.
– Deliver the goods at the agreed-upon time and location as specified in this Contract.
– Ensure ownership rights, legal compliance of the goods, and transfer ownership rights to the Buyer, ensuring that the goods sold are not disputed by a third party.
11.2: Rights and obligations of Buyer The Buyer has the right to:
– Accept or reject the goods when the Seller delivers them ahead of schedule.
– Accept or reject the excess quantity of goods delivered by the Seller.
– Inspect the goods before accepting the delivery.
– Request the Seller to take responsibility in case of incomplete or non-compliant deliveries as per the contract.
– Withhold payment or retain a portion of the purchase price if damaged or defective goods are discovered upon receipt, with evidence proving Seller's deception.
– In the event of the Buyer's breach of contract, the Seller has the right to demand the Buyer to fulfill the contract, declare the contract null and void, and request compensation for damages according to the terms agreed upon in this Contract.
– Perform necessary tasks to enable the Seller to fulfill the obligation of delivering goods according to the contract.
– Inspect the goods within the shortest possible time allowed by the actual circumstances.
– Make payment to the Seller for the goods as agreed upon in Article 4 of this Contract.
12.1 Neither the Seller nor the Buyer can end or delay the Contract, whether in full or part, without written agreement from the other party If one party wants to end the Contract, they must first give the other party a reasonable amount of time to fix any problems that are causing the contract not to be carried out If, after this time, the party in breach still can't meet their obligations, the party requesting the contract termination must inform the other party in writing.
12.2 If one party goes bankrupt, they must transfer all their rights to the creditor, accept or allow the transfer of assets or business operations, and follow the bankruptcy procedures, whether it's in their own country or another The party going bankrupt must immediately inform the other party in writing, and both parties will work together to find the best solution.
12.3 If neither party can fulfill their obligations in the contract due to a major unforeseen event (will be explained in Article 14 of this contract) neither party is at fault If this unforeseen event lasts for more than 03 months, both parties will talk about it and try to find a solution together.
13.1 The Seller's liability in respect of any act or omission, in connection with products sold, services performed or provided, whether directly or indirectly under this Contract, whether means stipulated in a Contract or warranty that, due to fault or failure to perform the necessary purpose of the fault (including negligence or absolute liability), compensation shall not exceed the total contract value for all responsibilities within the entire terms of the Contract
13.2 In case the delivery of Goods is delayed for any reason under the Seller's responsibility, the Buyer is allowed to claim for damages from 0.5% per week to a maximum of 5% calculated on the value of the Goods delivered late.
Contract analysis
The contract to export cashew nuts from Vietnam to Saudi Arabia includes 18 articles as follow:
Article 1: Commodity: Describes the name of goods by HS code, shipment volume, quality and parameters of the goods, inspection companies in the loading port and discharge port.
Article 2: Price and payment methods: unit price in tons, contract price in numbers and letters; payment method and payment timeframe.
Article 3: Payment terms: Specific regulations on payment along with the set of documents the seller needs to provide to receive payment.
Article 4: Discount, rejection: Discount rate and rejection of the cargoes in many different occurrence cases.
Article 5: Specification of packing and specification of container: The specification in packaging bag and container length and conditions.
Article 6: Shipment mode and time of shipment: Include how the goods will be shipped, loading time, loading and discharge port, delivery terms and shipping documents.
This article outlines the terms and conditions under which one party (the charterer) rents or hires a vessel from another party (the owner or lessor) for a specified period of time or for a particular voyage As in the contract the vessel needs to be chartered from a reputable owner and equipped with temperature- controlled storage facilities The ship's age is also not allowed to be more than 5 years The charter period will extend for 45 days from the loading time in Ho Chi Minh, Vietnam and unloading in Jubail, Saudi Arabia
This article outlines the provisions related to the types and amounts of insurance coverage as well as insurance conditions that one or both parties are required to obtain to protect against potential risks or liabilities related to the contract In the contract, the insurance conditions and coverage are subject to Insurance Clause A of ICC with the period from loading time in Ho chi Minh city, Vietnam to unloading time at buyer's premise in Riyadh, Saudi Arabia The insurance
Group 6 – Class: 47K01.4 beneficiary is the buyer and when a risk occurs, the claim is paid by Bao Viet Insurance company.
This article outlines the procedures, responsibilities, and standards for inspecting the quality, quantity, and condition of the goods being bought or sold.
According to the contract, the seller must inspect and bear all costs for the first inspection of goods before delivery The buyer must inspect and bear all costs for the second inspection The result from the second inspection is decisive if there are any differences.
This article requires the Seller to create a guarantee worth 10% of the total contract value ($750,000 as mentioned in Article 2) within 10 days of signing the contract This guarantee stays valid until 30 days after the warranty period ends and must come from a bank acceptable to the Buyer, following the Buyer's terms.
Importantly, all costs for setting up this guarantee are the Seller's responsibility, and they must reimburse the Buyer for these expenses.
Article 11 outlines the Seller's rights (including on-time delivery and payment requests) and responsibilities (such as insurance purchase and quality checks) It also defines the Buyer's rights (like accepting or rejecting early deliveries) and obligations (ensuring Seller's delivery facilitation and timely inspection), with provisions for handling breaches, including contract nullification and compensation for damages.
Article 12 requires mutual written agreement for contract termination or delay.
If one party wishes to terminate, they must first give the other party time to address issues and then provide written notice if issues persist In cases of bankruptcy,assets must transfer to creditors, and both parties must cooperate Additionally, if an unforeseen event, as defined in Article 14, prevents either party from fulfilling
Group 6 – Class: 47K01.4 their obligations for more than three months, both parties will collaboratively seek a solution.
Article 13 establishes liability terms within the contract It limits the Seller's liability, including compensation, to the total contract value for all responsibilities within the contract term due to any act or omission, regardless of means If delivery is delayed due to the Seller's fault, the Buyer can claim damages of up to 5% of the late Goods' value, accruing at a rate of 0.5% per week If the Seller is at fault for contract termination, compensation can't exceed the performance guarantee in Article 8, and the Buyer returns non-compliant Goods with the Seller covering return expenses For Buyer-caused terminations, they must pay for completed work per mutual agreement.
Article 14 addresses force majeure events and their impact on the contract In such events, the performance timeline is extended to account for the duration of the force majeure These events include natural disasters, war, civil unrest, and labor disruptions However, both parties remain obligated to pay their dues regardless of force majeure Parties must inform each other within 10 days of the event's occurrence and mutually agree on a delivery extension if needed If force majeure persists for over 6 months, the contract terms will be reviewed and agreed upon by both parties.
This article outlines dispute resolution procedures Initially, disputes will be resolved through mutual reconciliation efforts between the parties If reconciliation is not possible, disputes will be settled at the International Arbitration Center in Vietnam with three arbitrators appointed according to Vietnamese law The decision of the arbitrators is final and binding, and the losing party is responsible for arbitration costs and expenses Vietnamese is the language used in proceedings.
Group 6 – Class: 47K01.4 The article establishes that the laws of Vietnam will apply to the contract’s interpretation, validity, enforcement, and resolution of any disputes that may arise.
The article stipulates that any changes to the contract must be made in writing and require the agreement of both parties.
The article stipulates that all activities associated with the contract, including notifications, requests, agreements, quotations, or proposals, must be conducted in either Vietnamese or English Furthermore, the contract itself will be drafted in both Vietnamese and English, and both versions will hold equal legal validity The article also outlines the order of priority in language usage in the event of any discrepancies.
Important terms that may cause conflicts and resolutions
Article 2: Price and Payment Method
Price: The initial price for 1Mt of cashew nuts that Vinh Tam company targets is
1700 USD/Mt However, the Bayara company can offer a lower price of 1300 USD/Mt The two sides may have a dispute about the price.
→ Resolution: The two sides now choose a middle price and make concessions to each other for long-term cooperation of 1,500 USD/Mt.
Currency Exchange Rate Fluctuations: Since the price is quoted in US dollars, any significant fluctuations in the exchange rate between the Buyer's currency and the US dollar can impact the actual cost for the Buyer This can lead to disputes if the exchange rate changes substantially between the time of contract signing and payment.
→ Resolution: Include a clause in the contract that specifies how exchange rate fluctuations will be handled For example, if the exchange rate changes within 5%,both parties can accept the market rate at that time to make payment If it exceeds5%, both parties will maintain the original exchange rate when signing the contract which is 3.75 SAR/USD.
Delay in T/T Advance Payment: The Buyer fails to make the T/T advance payment within the stipulated 20 working days from the receipt of the Commercial Invoice and Bank guarantee.
→ Resolution: The contract should include details on the specific requirements for the bank guarantee such as amount, validity period, and any other conditions For example, the bank guarantee should be valid for the entire duration of the contract, starting from the date of issuance and expiring date and cover the entire period of cashew nut export, including production, quality inspection, shipping, and customs clearance If a dispute arises, parties can resolve it by referring to the contract terms.
Dispute Regarding D/P Payment: The Buyer refuses to make the D/P payment upon the arrival of the goods at the Buyer's port, claiming issues with the condition of the goods or discrepancies in documentation.
→ Resolution: To prevent this, ensure that the contract clearly defines the conditions under which D/P payment will be made such as requirements related to the Bill of Lading, the condition of the goods, and any other relevant documentation If a dispute arises, an independent third party or an agreed-upon mediator can assess the situation and determine if the Buyer's claims are valid.
Article 6: Shipment Mode and Time of Shipment
In CIF terms, disputes can arise when the seller delivers the container to the carrier and damage occurs to the goods during the pre-carriage period The seller will incur additional shipping costs and cannot control all risks during this shipping process.
→ Resolution: Both parties should switch from using CIF terms to using CIP terms Because in CIP, the risk of loss and damage to the goods will be transferred as soon as the goods are delivered to the carrier at the container yard.
Discharge port: Jubail Commerce Port, Jubail centre city, Saudi Arabia
Jubail Commercial Port is very large with more than 4 million square meters, disputes may occur if the two parties do not agree on a specific location to receive the goods.
→ Resolution: It is necessary to designate a specific location at the port to avoid disputes because any costs incurred at this location are borne by the seller.
Delay in Vessel Arrival: The vessel carrying the cashew nuts arrives later than the agreed-upon delivery date.
→ Resolution: The contract should include provisions for demurrage or detention charges in case of delays Parties should follow these provisions to determine compensation or penalties for the delay.
Dispute Over Vessel Condition: Party B claims that the vessel provided by Party
A is not in the agreed-upon condition.
→ Resolution: Both parties should ensure that the vessel's condition is as specified in the contract In case of a dispute, an independent surveyor can be appointed to assess the vessel's condition and determine whether any damages or deficiencies exist.
Dispute may arise during the inspection process if there are conflicting results between the inspection of the two parties While the contract states that the result of the second inspection is decisive, disagreements about the accuracy and fairness of inspections can still lead to disputes.
→ Resolution: Both parties need to conduct their inspections thoroughly, and it is advisable to use an independent and reliable inspection company to perform the inspections Keeping comprehensive records of all inspection reports, communication, and dispute resolution efforts for reference and potential legal purposes is recommended.
In this article at 12.1, when one party wants to end the contract, they must give other parties a reasonable period of time Disputes can happen if the period of time
Group 6 – Class: 47K01.4 isn’t clear If the other party doesn't agree with the period of time given by the party who wants to end the contract, conflict will happen and we have to discuss it to solve this problem Besides, the term “unforeseen event” in 12.3 is not detailed enough to determine the condition.
Clearly define terms that may be subject to interpretation, such as "reasonable amount of time" and "major unforeseen event." A reasonable period of time can be 30 days or 60 days based on their understanding of the circumstances.
Ensure that Article 14 provides a comprehensive list of events that qualify as force majeure and specifies the steps to be taken when such events occur.
Specify the applicable jurisdiction and legal framework for handling bankruptcy situations.
Include dispute resolution mechanisms, such as mediation or arbitration, to address disagreements that may arise during contract termination.
In 13.1, the limitation of liability can lead to disputes if the Buyer believes that the Seller's negligence or fault has caused significant damages exceeding the contract value
→ Resolution: Ensure that the contract provides specific definitions and criteria for determining liability, penalties, and damages.
Other parties may not agree with the solution in 13.3 and 13.4 so it can create a dispute to find out the best resolution for both parties.
→ Resolution: Clearly outline the circumstances under which termination of the contract is allowed and the corresponding compensation or reimbursement procedures Include dispute resolution mechanisms, such as mediation or arbitration, to address disagreements related to penalties and damages.
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