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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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Thursday, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and ...
Thursday, 27 February 14
NEWCASTLE COAL EXPORTS SLIP 26.68 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 24 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2. ...
Wednesday, 26 February 14
SMALLER SIZE SEGMENTS HOLDING ON TO THEIR LEVELS; CAPES CORRECTING UPWARDS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable+)
The Dry Bulk market continued to improve this past week, on the back of rates for the smaller size s ...
Tuesday, 25 February 14
GBCE, A COAL UPGRADING TECHNOLOGY DEVELOPER, APPOINTS RICHARD BULMAN AS PROJECT DIRECTOR
Press Release: GB Clean Energy Ltd. (GBCE) announced today the appointment of Richard Bulman as Project Director. In this capacity Mr. Bulman ...
Tuesday, 25 February 14
ULTRAMAXES ARE THE 'WEAPON OF CHOICE' FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a busy start in 2014, as the first month of the year was a rather active in terms of second hand vessel purchases and newbuilding orderin ...
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- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Siam City Cement - Thailand
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
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