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CHAPTER IX
PENALTIES

Clause Thirty-Nine
General principles

One. If CTM fails to comply with its obligations arising from the Agreement in hand the penalties laid down in this chapter shall apply.

Two. Where any of the penalties referred to herein are applied, CTM shall not be exempted from its responsibility before third parties nor does it prevent the relevant authority from deciding on any other penalties as provided for in the legislation in force in the Territory.

Three. In case of an act of God CTM shall be exempted from all its undertakings under the Agreement in hand providing it has taken all reasonable measures to avoid its consequences and if it is found that there was no negligence or intent on CTM’s part.

Four. For the purposes of the Agreement in hand, an act of God shall include, the following meaning: war, social unrest, fire, cataclysm, wrongdoing or third parties intervention duly evidenced.

Five. The Government of the Territory shall decide on the application of the penalties referred to in this chapter.

Clause Forty
Fines

One. The following infringements shall be subject to fines of ten thousand (10,000) to five hundred thousand (500,000) Patacas:

1. Poor quality of the service provided, according to clause 29, no. 3 of this agreement;
2. Infringement of telecommunications secrecy by fault that, pursuant to clause 7, is attributable to the Concessionaire or its staff on duty;
3. Failure to comply with the obligations undertaken by CTM concerning service set-up and operation;
4. Any unjustified refusal to provide the information required under the terms of Clauses Twenty-Seven and Twenty-Nine; giving of false information; denial or creation of unjustified obstacles for the access to facilities of the supervisory body’s representatives;
5. Charging fees which have not been authorised by the Governor or the levying of fees in a fashion other than that set forth in the approved tariff system;
6. Unjustified refusal to provide a service which CTM is obliged to provide under the terms of the Agreement;
7. The obligation imposed upon CTM to promote the steady development of the service in terms of its quality, its quantity and to ensure the permanent upgrading of its facilities;
8. Infringement of the provisions of Clauses Thirty, Thirty-Two and Thirty-Three;
9. Infringement of the legal norms forming part of the regulations governing public use which CTM is to obey under the terms of the Agreement in hand;
10. Other non-specified infringements under this agreement.

Two. Should there be any delay in the payment of the instalment or other sums required by the Agreement in hand, CTM shall pay the Territory penalty interest which shall be determined in the following manner:

1. Two per cent (2%) a month during the first month;
2. Three per cent (3%) a month during all subsequent months;

Three. Fines and penalty interest shall be paid within thirty (30) days of the date on which CTM is notified that it is to be levied. The Territory shall reserve the right to be paid from a pledge deposit as foreseen in Clause Forty-Three below if this deadline falls to be observed.

Clause Forty-One
Termination by Default

One. The Concession agreement can be unilaterally terminated by the Territory. whenever one of the following infractions occur:

1. Abandonment of operation;
2. Delay in the payment of sums due under the terms of the Agreement in hand exceeds six months;
3. Should the value of the pledge deposit not be replaced within the deadline indicated in Clause Forty-Three below;
4. Alienation or transmission, wholly or in part, of the Concession, and either temporary or definitive, without prior authorisation of the Governor;
5. Modifications introduced into the object of the Companhia de Telecomunicacoes de Macau, without the prior authorisation of the Governor;
6. Unfounded refusal to allow other operators access to its Networks or circuits or failure to remove administrative or operational difficulties with the intention of gaining competitive advantages over them in the provision of liberalised services;
7. Imposing of fines of more than one and a half million Patacas.

Two. Termination by default shall be pronounced in a law issued by the Governor.

Three. Termination by default confers the right upon the Governor to take on the direct management of the service forthwith or to grant it to another body.

Four. Termination by default shall entail the reversion of all property allocated to operations back to the Territory.

Clause Forty-Two
Sequestration

One. The Concession may be seized under the following circumstances:

1. Should the unfounded interruption to the respective operation occur or be imminent;
2. Should there be serious disruptions to, or shortcomings in, CTM's organisation or operation or in the general state of repair of the installations and material used for the said operation;

Two. During the course of the seizure, Territory representatives shall secure the operation of the Concession. Any expenditure required for the upkeep and standardisation of the operation shall be borne by CTM.

Three. The seizure shall remain in force whilst deemed necessary, the Territory being empowered to advise CTM to resume operation of the Concession upon completion of the said seizure. Should CTM be unwilling to resume operation, the Concession shall be terminated in accordance with Clause Forty-One above.

Four. In the event of any of the situations referred to in items a) and b) of number one occurring, the Governor shall notify the Concessionaire to remedy the situation and repair the consequences, within a reasonable period not exceeding 10 days; if the Concessionaire fails to do so, the provisions of the previous numbers shall apply.

Clause Forty-Three
Bond

One. Commitments of a pecuniary nature undertaken by CTM under the terms of the Agreement in hand shall be assured by a bank guaranty first demand made payable to the Territory for the sum of two million Patacas.

Two. The figure indicated in item One above shall remain in force throughout the life of the Agreement, CTM having to replace it should it be reduced for whatever reason. This compensation shall be effected within thirty (30) days as from the date on which CTM has been advised to do so.

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