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Wednesday, 05 February 14
MARKET INSIGHT - TASOS PAPADOPOULOS
 KNOWLEDGE TO ELEVATE
COALspot.com: Let's take a break from market prospects, numbers, order book etc. and shed some light on the conclusions of the Tribunals in two recently decided cases, namely "The Union Power" and "The Griffon", which any prudent Seller/Buyer should be aware of before entering into an MOA for a secondhand tonnage. In "the Griffon" case an MoA based upon NSF 93 had been signed on 1st May 2010 for the purchase of m/v Griffon. A deposit of 10pct (i.e USD 2,156,000) was payable within 3 banking days of signature; that is by 5th May, 2010. The deposit was not paid by that date and Sellers, on 6th May, 2010 cancelled the MOA as per their express contractual right and claimed the deposit. Buyers had accepted that their failure to pay the deposit was in breach of contract but argued that Sellers should only be entitled to claim "compensation for losses" (as per clause 13 ) and not the whole deposit.
The Court of Appeal confirmed that Buyers are liable for the amount of the (unpaid) whole deposit, if the MOA is terminated as a result of Buyers’ breach. This heralds a departure from the previously held view that under clause 13 of NSF 93, where a Buyer fails to pay the deposit under clause 2, Sellers "shall have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest" (which might be less than the amount of the deposit). During the arbitration it was argued that the damages recoverable by Sellers should be the difference between contract and market price which were said to be US$275,000; that is, substantially less than the deposit (i.e. USD 2,156,000). The Court however, concluded that Sellers are in fact entitled to claim the whole deposit in such circumstances.
Anyway, it would not make sense for Buyers to be able to put themselves in a better position than the one they would have been had they not paid the deposit. This case is a reminder to Buyers of secondhand tonnage that if they agree to pay a deposit, under standard NSF terms, they will lose the deposit if they fail to perform, even if Sellers suffer no loss. The case of "The Union Power" in turn, has caused us to re-assess the Sellers' obligation under clause 11 of NSF 93 (Condition on Delivery) and a different understanding of the terms "As is where is " and "As she was at the time of inspection". The MOA in this case, included clause 11 that stipulated that the vessel was to be “delivered and taken over as she was at the time of inspection, fair wear and tear excepted”. When the dispute arose, the buyers argued that a term as to satisfactory quality was to be implied into the MOA by way of s.14(2) of the Sale of Goods Act 1979 (SOGA). Sellers argued that the provision of clause 11, that the vessel was to be sold “as she was”, was inconsistent with implying such a term. The Commercial Court decided in favor of the Buyers, concluding that "class does not tell you the quality of the vessel, which is why the independent implied term as to satisfactory quality is required".
As a result, the effects of the expressions "As is" or "As is where is" no longer exclude the right of Buyers to claim for damages for breach of implied “quality” but only to exclude their right to reject the vessel and not take delivery of her as per the terms and provisions of the MOA. In my view, the above decision is contrary to the commercial common sense and market understanding that has been the basis for thousands of deals over the years.
However, it is worth mentioning that the new NSF 2012 includes wording under Clause 18 which excludes the SOGA regime. Ultimately, what matters is whether the parties have used express and clear wording, such as that of NSF2012, to exclude the SOGA regime if they wish to exclude the satisfactory quality rule.
Compiled by:
Intermodal Research & Valuations | research@intermodal.gr
Analysts:
Mr. George Lazaridis | g.lazaridis@intermodal.gr
Ms. Eva Tzima | e.tzima@intermodal.gr
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Monday, 24 March 14
SGX'S Q2'14 CFR SOUTH CHINA COAL SWAP CLOSES SLIGHTLY HIGHER W-O-W
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 1.81 percent month on month and closed at US$ 74.82 per mt as o ...
Sunday, 23 March 14
THE COAL FREIGHT RATES SEEN SLIGHTLY FIRMING UP THIS WEEK - REDDY
COALspot.com: The freight market firmed up this week. BDI was up 8.26 pct week on week and index was closed at 1599 points. The Cape index was u ...
Saturday, 22 March 14
SHIP OWNERS INVEST $15 BILLION FOR NEWBUILDINGS AND SECONDHAND VESSELS DURING FEBRUARY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have kept on their aggressive stance in the investment scene both for newbuildings, as well as for secondhand vessels globally durin ...
Friday, 21 March 14
DRY BULK MARKET STAYS ON RECOVERY MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has reached new year heighs, as a result of renewed Capesize demand. The Baltic Dry Index (BDI) ended yesterday's sessio ...
Friday, 21 March 14
US COAL PRODUCTION UP 1.5%; WEST MISSISSIPPI COAL PRODUCTION DOWN 1.85% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
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- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
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