The 2018 five-year exclusive vaccine distribution contract has been over for eighteen months and JAPFA keeps shipping under nothing more than an unsigned rev.7 First Amendment sitting in the folder. If Tigervet refuses to pay a bill tomorrow, JAPFA's legal position is uncertain on every material term — territory, exclusivity, pricing, dispute forum. Three new gaps compound the expiry: Vietnam's new Foreign Contractor Tax (Sept 2025) is silently eating 5% of revenue with no gross-up clause; the hybrid BANI+SIAC dispute clause matches a defect found in seven other JAPFA contracts; KUHPerdata 1266/1267 is not waived, so JAPFA cannot terminate without filing a Jakarta lawsuit first.
⚠️ Pull rev.7 First Amendment, run it through review, close within 30 days. Do NOT sign anything new yet.A separate AGREEMENT TIGERVET.pdf and two First Amendment drafts (rev.3 clean and rev.7) sit in the same folder. The existence of two redline iterations strongly suggests an active renegotiation track is already underway. Those drafts are NOT reviewed in this memo — they need a separate /lawyer-advisor pass before any signature.
The deal in 3 sentences: JAPFA signed a 5-year exclusive Vietnam vaccine distribution contract with Tigervet in October 2018. That contract expired in September 2023. JAPFA has continued shipping anyway, with no signed renewal — there are two unsigned First Amendment drafts sitting in the folder, suggesting both sides know they need to fix this.
"The term of this Agreement shall be for a period of five (5) years from the date hereof and will be terminated on September 30, 2023."
Your 5-year Vietnam vaccine distribution contract ended on 30 September 2023 — 18 months ago. Every invoice JAPFA has sent and every shipment that's gone out since October 2023 is happening under an "implied continuation" — no signed paper covers those transactions. If a dispute happened tomorrow over a missed payment or a quality claim, the courts (Indonesian or Vietnamese) would have to reconstruct what the parties intended from conduct alone, which gives the other side significant room to argue down any obligation.
"the Parties agree to bring the dispute to BANI (Badan Arbitrase Nasional Indonesia) and use the Singapore International Arbitration Centre (SIAC) rules."
The contract picks the Indonesian arbitration institution in Jakarta (BANI — the Indonesian arbitration body) but says to use the rule book of the Singapore institution (SIAC — the Singapore arbitration body). These are two different institutions with two different rule books, fee schedules, panels, and processes. They cannot be combined. If a real dispute went to either institution, the losing party would have a textbook excuse to refuse to enforce the award in Vietnamese courts under the NY Convention 1958 (the global treaty that makes arbitration awards enforceable across borders). This is the same defect present in 7 other JAPFA portfolio contracts.
Nothing — there is no tax clause. Annex 2 quotes prices "CIF Specified Territory Airport in USD."
Vietnam Circular 27 (effective 15 September 2025) makes Tigervet legally required to withhold 5% from every USD payment to JAPFA — that's 5% Vietnamese tax going to Hanoi instead of to JAPFA. Two possibilities, both bad: (a) Tigervet has been withholding for 8 months — JAPFA is silently 5% short on every invoice since September 2025 with no contractual right to recover, OR (b) Tigervet has NOT been withholding — both sides have unaddressed back-tax exposure to Vietnam tax authorities plus penalty interest. In dollar terms: if Vietnam revenue is USD 1M/year, that's USD 50K/year either lost to JAPFA or owed to Vietnam tax.
No express waiver clause. The contract is silent on KUHPerdata 1266/1267.
Under Indonesian law (the law you chose to govern this contract), if you want to terminate for cause — say Tigervet breaches by selling competing products or missing payment — you cannot simply send a notice and walk away. KUHPerdata Articles 1266 and 1267 are Indonesian Civil Code articles: under default Indonesian law, you cannot terminate a contract without going to court first; a one-line waiver clause fixes it. Without the waiver, JAPFA must file a lawsuit in Jakarta district court (Pengadilan Negeri Jakarta) and get a judge's permission to terminate. That takes 12-18 months minimum.
Nothing — CISG is not mentioned anywhere.
CISG is the UN treaty on cross-border sales of goods (Vienna 1980). Vietnam joined it in 2017 — before this contract was signed; Indonesia is NOT a member. When one party is in a CISG country and the contract chooses the law of a non-CISG country (Indonesia), there is real legal argument that CISG applies anyway. CISG has different rules from Indonesian law on things like warranty timing, what counts as a "fundamental breach," and when risk passes from seller to buyer — and the differences are not always in JAPFA's favour. The standard fix is one line saying "CISG does not apply."
| # | Issue | Negotiability | What to say in meeting |
|---|---|---|---|
| 1 | Close rev.7 First Amendment — retroactive ratification of Oct 2023 → present | High | "We both know the 2018 contract expired Sep 2023. Let's get rev.7 reviewed and signed within 30 days — both sides need certainty." |
| 2 | Replace hybrid forum (Art. 15.b) — SIAC Singapore + 3 arbs + English | High | "The current clause names two arbitral institutions — it's broken. Clean SIAC Singapore benefits both of us at enforcement time." |
| 3 | FCT gross-up clause — 5% Vietnamese tax allocation | Medium | "Vietnam Circular 27 requires you to withhold 5%. Let's gross up so neither side carries silent leakage. Or raise CIF 5% — your call." |
| 4 | KUHPerdata 1266/1267 waiver | High | "One-liner; benign for both sides. Without it neither party can terminate cleanly under Indonesian law." |
| 5 | CISG exclusion | High | "Vietnam is a CISG signatory; Indonesia is not. One line of express exclusion avoids future law-of-the-contract argument." |
| 6 | Sales target floor + escalator — USD 250-500K Year 1, 10% YoY | Medium | "Both sides benefit from a floor — gives us shared baseline and lets you forecast inventory." |
| 7 | MA / NIE transfer-back deadline — 60 days + LD | High | "If we ever part ways we both need certainty around the registration handover." |
| 8 | FCPA / Sanctions / Tipikor reps | High | "Standard compliance language — required by our banks." |
| 9 | Bilingual Bahasa Indonesia counterpart | High | "UU 24/2009 requires it. We'll handle translation." |
| 10 | Liability cap + insurance — mutual 12-month net sales cap | Medium | "Right now neither side has any cap — let's make it mutual and fair." |
Why the score dropped from prior portfolio scan's 55 to 47: Three new gaps surfaced once the full 9 pages were OCR'd: (1) the contract is expired, (2) Vietnam's new Foreign Contractor Tax (Circular 27, September 2025) requires Tigervet to withhold 5% from every JAPFA invoice — but the contract has no gross-up clause, so JAPFA is silently losing 5% of revenue with no contractual recovery right, (3) Article 1266 of Indonesia's Civil Code is not waived — meaning JAPFA cannot terminate without going to court first.
Post-rev.7 projected score: If rev.7 First Amendment closes with all 5 Critical fixes and the top-tier Material fixes, score moves from 47/F → ~78/B-.