AFGRI Agri Services Storage Agreement

1.          GENERAL

This contract between AFGRI Grain Management, a division of AFGRI Operations (Pty) Limited, registration number: 1995/005872/07 (“the Grain Silo Owner”) and any counterparty “(the Grain Silo User”) deals with grains and oil-seed (hereafter called the “product”), which the Grain Silo User wants to store in the storage facilities of the Grain Silo Owner and the services in this regard which the Grain Silo Owner is prepared to render against payment in terms of the contract to the Grain Silo User an undertaking which the Grain Silo Owner makes to the Grain Silo User to deliver a product of the same quality and quantity to the Grain Silo User and matter in this regard. This contract will be deemed binding until a new contract is negotiated between the parties.

2.          PRODUCT

All product handled by the Grain Silo Owner.

3.          QUANTITY

  • Nett mass as delivered in the storage facility as per silo certificate/proof of receipt.
  • The product is received into the storage facility as clean after the adjustments for physical and handling losses have been made.
  • Any adjustment/s under this contract shall be made in accordance with the Grain Silo Owner’s practices and/or standard industry practices.

4.          QUALITY

The quality of the product complies with the grading regulations of the directorate of plant and quality control of the National Department of Agriculture (specifications as per Agricultural Product Standards Act 119 of 1990; and/or the Grain Silo User that delivers the product to the Grain Silo Owner confirms herein that such product complies with the requirements of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act 36 of 1947 as amended, as well as the Foodstuffs, Cosmetics and Disinfectants Act 54 of 1972 as amended and where applicable the acts require that the product may only be treated with lawful chemical drugs which are suitable for human use.

5.          ON-GENETICALLY MODIFIED ORGANISMS

  • In the event that the product stored does not contain genetically modified organisms (GMO free), in terms of the Genetically Modified Organisms Act no 15 of 1997 as amended by the Genetically Modified Organisms Amendment Act no 23 of 2006, a specific protocol will be followed by the Grain Silo Owner after a written request was made by the Grain Silo User. Said protocol is available at AFGRI’s head office (grain management), and only certain operational points handle GMO free product, which have to be arranged in advance and identified.
  • Should the Grain Silo Owner not follow the protocol and sign it, the Grain Silo Owner cannot provide the Grain Silo User with any guarantee with regard to the non-genetically modified product.
  • Non-genetically modified product that was originally delivered on producer storage cannot be taken up as protocol product later, unless a written arrangement with the Grain Silo Owner has been in place.

6.          STORAGE FACILITY

A silo refers to all the Grain Silo Owner storage facilities within the AFGRI group where the product is stored.

7.          FUMIGATION AND DRYING

All products will be fumigated according to the directives of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act 36 of 1947. No certificates (electronic, paper or SAFEX certificates) will be issued until the product has been fumigated or until it has been dried. Products can only be collected after it has been fumigated and the exposure period of the fumigation on the specific product has lapsed and if it is dry, only after the drying process has been completed.

8.          CO-OWNERSHIP

  • The Grain Silo Owner and the Grain Silo User agree as follows:
  • the Grain Silo Owner stores the product for the Grain Silo User, who shall pay storage charges in terms of a tariff as determined in accordance with this contract;
  • should the product so deposited become merged with product already contained in the storage facility, the resulting bulk of the product shall constitute the joint property of the various product silo users (including the Grain Silo User), each of whom shall hold an undivided share therein expressed as a fraction equal in extent to the quotient of the total mass of the bulk from time to time, divided by the mass of each individual deposit of the product, and adjusted according to the same formula whenever a portion of the bulk of product is withdrawn from the storage facility by one or more of the co-owners, or a further deposit of product is made;
  • the Grain Silo Owner is authorised to act as the agent in rem suam of each product silo user (including the Grain Silo User) in binding them to the co-ownership of the product, to adjust the composition of such co-ownership and to adjust each co-owner’s share as and when a withdrawal of the product is made from the storage facility by any of the co-owners, or a further deposit of the product is made;
  • the Grain Silo Owner holds the product for and on behalf of each of the co-owners during the currency of the storage and acknowledges that it is not the owner or co-owner thereof;
  • the Grain Silo Owner acknowledges that the product silo users (including the Grain Silo User) may alienate their respective shares, in which event any silo receipt issued by the Grain Silo Owner to the Grain Silo User will be transferred to the purchaser pursuant to such sale. Notwithstanding the aforementioned or anything else contained in this contract the Grain Silo User shall not be entitled to transfer ownership of his respective share unless the applicable silo receipt is accordingly transferred to such transferee. Furthermore in the instance that the Grain Silo User is unable to transfer the applicable silo receipt as aforementioned the Grain Silo User shall not be entitled to alienate his respective share until such time as the applicable transferee has taken delivery of the product and the product has actually left the storage facility; and
  • upon the aforesaid transfer of the silo receipt and/or the physical removal of the product from the storage facility, the Grain Silo Owner will henceforth hold the product on behalf of the newly constituted body of co-owners including the transferee of the silo receipt and declares that it will acknowledge and abide by the rights of every such subsequent holder of the silo receipt in terms of the provisions recorded herein.

9.          INSURABLE RISKS

  • The Grain Silo Owner must insure all products stored in its storage facility against insurable risks.
  • The Grain Silo Owner shall not be liable for any loss of profit or business or any indirect or consequential losses, damages, costs and expenses arising under this contract.
  • Notwithstanding any clause to the contrary contained in this contract, the Grain Silo Owner’s liability is limited to the lower of the total storage fees (and/or related fees) payable to the Grain Silo Owner under this contract, in the contract year (contract year means each consecutive 12 (twelve) month period from the signature date) immediately preceding that in which the event giving rise to the liability arises (or where such event arises in the first contract year of this contract, the actual total storage fees (and/or related fees) paid together with the projected fees for the remainder of the first contract year) or the physical market value of the product in question with regards to the claim/s at the time of the incident.
  • The Grain Silo Owner shall be entitled to dispute the existence or extent of any shortage and/or any amount claimed, provided that it gives sufficient notice to the Grain Silo User in writing stating the basis of its dispute.

10.       RIGHT OF RETENTION

  • The Grain Silo Owner has a retention right on all products that are stored in the storage facility for the settlement of store facility service costs and/or for the settlement of any debt, cost or other expense, however incurred, due to any other member within the AFGRI group of companies. The right of retention is limited to the value of the product equal to the total outstanding amount of debt.
  • The Grain Silo Owner has a legal claim to all income arising from the sale of the product for the settlement of such debt as set out in clause 10.1.

11.       MIXING OF PRODUCTS

The Grain Silo Owner has the right to mix the same products provided that products which do not comply with the original grade at withdrawal, will be corrected by means of offsetting (upgrading or downgrading). Corrective payment between the Grain Silo Owner and Grain Silo User must take place on the day of withdrawal and is calculated at the price difference with the b1 grade as general basis.

12.       TARIFFS FOR SERVICES RENDERED

  • The Grain Silo User shall pay to the Grain Silo Owner the applicable service tariff for each marketing year as published from time to time by the Grain Silo Owner. The tariffs are available from the Grain Silo Owner on request.
  • The Grain Silo Owner has the right to charge interest on such outstanding storage facility service costs calculated at a premium as propagated from time to time by the Grain Silo Owner, (currently ABSA’s prime rate plus 3% (three percent) – calculated daily and capitalized monthly) for the period which the storage facility service costs are in arrears. The Grain Silo User has 30 (thirty) days after issuing of the monthly statements to pay the account in full before interest will be charged. If no payment is received within the 30 (thirty) days, the Grain Silo Owner reserves the right to charge applicable interest.
  • All storage facility service costs exclude value added tax (vat).
  • The product need not be delivered and/or supplied by the Grain Silo Owner to the Grain Silo User or have a silo certificate or a SAFEX certificate issued, unless all service costs are paid. The Grain Silo Owner is entitled to retain the sufficient product in the storage facility as security for outstanding storage facility service costs due by the Grain Silo User.

 

13.       EX-SILO

All products will be supplied to the Grain Silo User on an ex-silo basis. The Grain Silo User has the right to inspect the load before the vehicle leaves the Grain Silo Owner’s premises.

14.       DISPATCHING OF THE PRODUCT / DISPATCH OF THE PRODUCT

  • The Grain Silo User should give prior written notice to the Grain Silo Owner’s head office of his intention to withdraw products from the operational point at least 7 (seven) working days to make the necessary logistic arrangements. Out-loading times should be booked at least 7 (seven) days before withdrawal from the operational point where the product is stored.
  • No product may be withdrawn without a valid dispatch instruction issued by the Grain Silo Owner. If NON-GMO product is stored on behalf of a client, the request for the instructions should clearly indicate that instructions for NON-GMO product are requested. If it is not a clear written request, no claims could be instituted against the Grain Silo Owner.
  • The Grain Silo User may withdraw the Product from the operational point where the product is stored with 7 (seven) days’ prior written notice to the Grain Silo Owner.
  • It is the Grain Silo User’s responsibility to arrange transport.
  • The Grain Silo User guarantees that he has entered into a valid transport agreement for the dispatch of the product, which transport agreement complies with the prescribed requirements of the National Road Traffic Act 93 of 1996 and regulations.
  • The Grain Silo User guarantees that the product is insured for transport purposes.
  • The Grain Silo User specifically indemnifies the Grain Silo Owner against any damage that the Grain Silo Owner may suffer because of the Grain Silo User’s non-compliance with this clause 14.  The Grain Silo User further indemnifies the Grain Silo Owner against any damages that the Grain Silo Owner might suffer because of the fact that he is a dispatcher in terms of the National Road Traffic Act 93 of 1996 and regulations.
  • If the product received by the Grain Silo User does not concur with the grade (allowing for paragraph 12), mass or moisture content as dispatched to him or if it is infected with insects, the Grain Silo User should inform the Grain Silo Owner and not offload the product. Telephonic as well as written notice should reach the Grain Silo Owner within 24 (twenty-four) hours of arrival of the product at the Grain Silo User’s nearest station/s or premises, failing which the Grain Silo User will be obliged to accept the product as if it has been delivered as dispatched. Where weekends or public holidays apply, notice should be given within 48 (forty-eight) hours.
  • The Grain Silo Owner will not be held responsible for any demurrage or any claims imposed when the correct claims procedure as explained in this contract has not been followed.
  • If clients, according to the Grain Silo Owner repeatedly declare unfair disputes, the Grain Silo Owner may decide to offload the product to the Grain Silo User concerned on an ex-silo basis. This arrangement will be confirmed to the Grain Silo User in writing by letter or by e-mail. The Grain Silo User will, however, be entitled to inspect every consignment before it leaves the Grain Silo Owner’s premises. If the Grain Silo User in this instance does not wish to inspect the product before it leaves the premises, the consignments will be regarded as an ex-silo dispatch and the Grain Silo User will not be entitled to lodge any dispute or have any claims on these consignments.
  • All product that are dispatched to persons/institutions outside the borders of the Republic of South Africa, are dispatched on an ex-silo basis.
  • The implication of this is that all dispatches of product have to be checked by the owner of the product or his representative in order to ascertain what the quality and quantity of every consignment is.
  • No claims may be lodged against the Grain Silo Owner if the quality and quantity at the destination outside the borders of the Republic of South Africa differ from the quality and quantity as dispatched at the operational point within the Republic of South Africa.
  • The responsibility to inspect the product at the operational point from where the product is dispatched remains the liability of the Grain Silo Owner and is he/she fails to carry out the inspection, it is accepted that the Grain Silo User is satisfied with the quality and quantity and no claims can be lodged against the Grain Silo Owner if the quality and quantity differ at the destination.
  • Where the Grain Silo User uses road transport, the Grain Silo User is responsible for arranging and controlling the trucks. No trucks will be loaded by the Grain Silo Owner if the trucks are wet, dirty or in such a condition that they do not comply with all applicable legislation and regulations.
  • If the Grain Silo User requires more product than the storage facility has in stock, the Grain Silo Owner will reserve the right to make a stock or financial adjustment, which the Grain Silo User will be obliged to accept.

15.       FORCE MAJEURE

The Grain Silo Owner will not be responsible for any delays of the product or any part thereof if it is brought about by any act of god, action by the government, strike, explosion, floods, riot, war, accident, embargo, legislation, civil uprising, unrest, any power failure and/or shortages, included but not limited to load shedding or any other cause or contingency. The Grain Silo User cannot institute any claim against the Grain Silo Owner for the delay or non-delivery according to this clause.

16.       NOTICE

Any notice which is received after 16:00 on a business day will be regarded as if it was received on the following business day. Any notice under this contract will be given by letter (if delivered by hand on the day it was written) or by telefax or e-mail.

17.       NON-BUSINESS DAY

Saturdays, Sundays and the official acknowledged holidays will be non-business days. Should any time limit for any action or notice fall on a non-business day the time which is limited in this way will be extended to the first business day thereafter.

 

18.       ARBITRATION

  • Any dispute of whatever nature between the parties, arising from the contract, may be settled by means of arbitration mediation or any other recourse available to the parties in law in the manner set out in this clause. The conditions of the Arbitration Act 42 of 1965 will apply to the arbitration procedures.
  • If the parties elect to resolve the dispute by means of arbitration, arbitration will take place at a venue as agreed upon by the parties and will take place and be completed as soon as possible after written notice by one party to the other that a dispute has arisen and request that the dispute be settled by means of arbitration. A copy of the notice will simultaneously be sent to the Association of Arbitrators (South Africa) in which they are requested to appoint a chairman for the arbitration tribunal which is determined according to clause 18.3
  • Every party will appoint an independent person who is au fait with the product industry within 5 (five) business days to act as arbitrator after any party has requested that the dispute be settled by means of arbitration. Should a party fail or refuse to appoint a person in terms of clause 18.3 an arbitrator will be appointed on his behalf.
  • The party against whom an award has been made by the arbitration tribunal is entitled to appeal to the Association of Arbitrators (South Africa) in writing within 10 (ten) business days after he received notice thereof in which case Rule 26 of the Rules of Arbitration (1997) as published by the Association of Arbitrators (South Africa) will apply.
  • The party is whose favour the award is made could, if he so wishes, requested that the award be made an order of the Court.
  • The parties agree to keep to the rules, fees and expenses of the Association of Arbitrators (South Africa).
  • Should the party against whom a final award has been made fail to comply with the conditions of the award as communicated to him within 21 (twenty-one) days after the award has been granted the other party may report it to the associations which accepted this contract form and these associations may publish the name of such party and the conditions of the award.
  • The parties concerned may, if they agree thereto, appoint a mediator who will be acceptable to both parties, who will try to see to it that both parties agree to settle the dispute. Any agreement which the parties may reach in settling the dispute will be binding on both parties. Should the two parties at any stage during the arbitration process decide to settle the dispute through mediation the arbitration process will be discontinued and the directives of the sub clause will apply. Should the dispute not be settled through mediation, the arbitration process will resume.

19.       ADDRESS FOR SERVICE OF DOCUMENTS AND NOTICES:

  • Grain Silo Owner and Grain Silo User hereby choose the following addresses for service of documents and notices:
  • Grain Silo Owner: AFGRI Building, 12 Byls Bridge Boulevard, Highveld, Centurion.
  • Grain Silo User: The physical address selected by the Grain Silo User.

20.       WHOLE AGREEMENT

The Grain Silo Owner and Grain Silo User agree that this document constitutes the whole agreement between them and that no amendment or alteration shall of any force or effect, unless reduced to writing and signed by both parties.

21.       SEVERABILITY

Each provision in this contract is severable from all others, notwithstanding the manner in which they may be linked together or grouped grammatically, and if in terms of any judgement or order, any provision, phrase, sentence, paragraph or clause is found to be defective or unenforceable for any reason, the remaining provisions, phrases, sentences, paragraphs and clauses shall nevertheless continue to be of full force. In particular, and without limiting the generality of the aforegoing, the Parties acknowledge their intention to continue to be bound by the remaining provisions of this contract notwithstanding that any provision may be found to be unenforceable or void or voidable, in which event the unenforceable or void or voidable provision concerned shall be severed from the other provisions, each of which shall continue to be of full force.

 

22.       DIRECT MARKETING

The Grain Silo User hereby states that the Grain Silo User has not entered into this contract as a result of any contact made either in person or by mail or electronic communication by the Grain Silo Owner or its representatives for the direct or indirect purpose of promoting or offering to supply any goods or services.

23.       EXECUTION

The parties specifically agree that the provisions of the Electronic Communications and Transactions Act 25 of 2002 shall apply to this contract. The definitions of “in writing” and “signed” shall have the meaning assigned to it under the Electronic Communications and Transactions Act 25 of 2002.