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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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Sunday, 02 March 14
THE FREIGHT MARKET WAS STEADY TO FIRM THIS PAST WEEK - CAPT. REDDY
COALspot.com: The freight market was steady to firm this past week. The BDI was up 7.06 pct and closed at 1258 points and the cape index was also fi ...
Friday, 28 February 14
PTBA TO INCREASE ITS COAL TERMINAL'S LOADING CAPACITY TO 25 MILLION TONS PER ANNUM BY JULY 2014
COALspot.com: PT. Bukit Asam (PTBA), the Indonesian government owned coal miner operates several coal mining units in Sumatera as well as in Kaliman ...
Friday, 28 February 14
U.S PRODUCED 1.9% LESS COAL WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Friday, 28 February 14
DRY BULK MARKET SLOWLY BUT STEADILY FINDS ITS FOOTING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, hit by the low seasonal demand which is a typical characteristic of the first quarter of each year, is beginning to emerge from ...
Thursday, 27 February 14
PANAMAX : MARKET CONTINUED TO DECLINE IN THE ATLANTIC
Handy
The Atlantic handy/supra market experienced a downward trend this week but not a dramatic one. TA rates are down around USD 800 w-o-w lead b ...
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- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- PTC India Limited - India
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Planning Commission, India
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
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