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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, 14 March 14
US, THE WORLD'S SECOND LARGEST COAL PRODUCER MINED 75.3 MMST OF COAL IN FEBRUARY; DOWN 10.88% M-M
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.7 million short tons (mmst) of coal ...
Thursday, 13 March 14
HANDY: THE FAR EAST MARKET IS IN AN UPWARD TREND - FEARNRESEARCH
Handy
Atlantic is a bit under pressure for spot tonnage, but the underlying sentiment is positive for the short medium future. 2-3 legs are do ...
Thursday, 13 March 14
MARKET INSIGHT - CHRISTOPHER T. WHITTY
By Christopher T. Whitty
Marketing Manager
Cotzias Intermodal Shipping Inc.
During the last year we have noticed that a fair number of ...
Wednesday, 12 March 14
ADARO ENERGY IMPROVES EFFICIENCY AND GENERATED STRONG EBITDA IN 2013
COALspot.com: PT Adaro Energy Tbk, Indonesia's single largest coal miner posted revenue of US$ 3.28 billion and cost of revenue of US$ 2.54 ...
Wednesday, 12 March 14
DGOMC OF INDONESIA REVISED DOWN THE BENCHMARK PRICES FOR COAL BY 4.26% IN MARCH
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has revised down the government's declared coal bench mark price ...
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- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Parliament of New Zealand
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
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