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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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Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
Thursday, 20 March 14
CAPESIZE: WEST AUSTRALIA TO CHINA RATES HAVE CLIMBED BACK TOWARD USD 11 PMT - FEARNRESEARCH
Handy
From a slight improvement in the Atlantic to a more mixed picture this mid week. North Atlantic rounds showing softening signs whereas S ...
Wednesday, 19 March 14
INSTEAD OF DECIDING WHETHER THE GLASS IS HALF FULL OR HALF EMPTY, I AM CURRENTLY GLAD THERE IS WATER IN THE GLASS - EVA TZIMA
By Eva Tzima
Research Analyst
Intermodal Research & Valuations
Right when you think that you have all your facts straight, right wh ...
Wednesday, 19 March 14
EUROCOKE SUMMIT 2014
Press Release: ThyssenKrupp, Steel Institute VDEh, SSI and more headline Smithers Apex’s Eurocoke Summit
The leading coke, coal and s ...
Wednesday, 19 March 14
DRY BULK MARKET REBOUND LEADS TO MORE NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The steady rise of the dry bulk market, as evidenced by the return, yesterday, of the Baltic Dry Index above the 1,500-point mark (1,518), is fu ...
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- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- The University of Queensland
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Parliament of New Zealand
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- SMC Global Power, Philippines
- Planning Commission, India
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- White Energy Company Limited
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Deloitte Consulting - India
- PTC India Limited - India
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
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