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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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Tuesday, 04 March 14
AUSTRALIA'S NPC TO SHIP 11.85 MMT OF COAL IN MARCH
COALspot.com: In the week ended 3 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 3.15 m ...
Tuesday, 04 March 14
HIGHER PRICES AND STEADY FREIGHT RATES LEAD SHIP OWNERS TO TEMPORARILY HALT SECOND HAND VESSEL PURCHASES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the dry bulk market has kept on improving, but at a very slow rate, ship owners have elected to take a step back from the flurry of the S&P m ...
Monday, 03 March 14
SUB-BIT INDONESIA COAL SWAP (FOB) FOR AVERAGE Q115 CLOSED AT $60.28, $ 1.70 HIGHER THAN 2Q14
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 slightly corrected do ...
Monday, 03 March 14
API 8 CFR SOUTH CHINA SWAPS: Q4' 2014 DELIVERY CLOSED US$ 1.40 HIGHER COMPARED TO Q2' 2014 DELIVERY
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 1.90 percent month on month and closed at US$ 76.27 per mt as on Fr ...
Monday, 03 March 14
COSTS LIABILITY PASSING DOWN A CHARTERPARTY CHAIN - SKULD
KNOWLEDGE TO ELEVATE
Provided that charterparties are on back to back terms, and the claim is successful, liability for costs incurred shoul ...
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- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Australian Coal Association
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
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