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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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Saturday, 22 February 14
POTEN RAISES THE QUESTION OF ACCURACY IN CALCULATING TANKER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the tanker market has grown in complexity over the course of the past few years, the question of whether the traditional methods of assessing rat ...
Friday, 21 February 14
INDONESIA PLAN TO CAP COAL OUTPUT AND HIKE ROYALTY; START MUSIC
COALspot.com: Energy and Mineral Resources Ministy of Indonesia is planning to increase the royalty for coal miners particularly for Mining Business ...
Friday, 21 February 14
THE WORLD'S SECOND LARGEST COAL MINER MINED 19.2 MMST OF COAL IN A WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, mined approximately 19.2 million short tons (mmst) of coal in a w ...
Friday, 21 February 14
DRY BULK MARKET SHOWS SIGNS OF LIFE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has slowly started to emerge from the downfall it's been since the start of the year, as rates have began to pick up over the c ...
Friday, 21 February 14
INDONESIA COAL OUTPUT CAP TO HURT MINERS RELIANT ON VOLUME GROWTH, FITCH SAYS
Fitch Ratings says that the credit profiles of mining sub-contractors and miners highly reliant on increasing volumes to support high debt servicing w ...
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- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
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