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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, 20 February 14
LENGTHY DELAYS TO PANAMA CANAL EXPANSION POSE GLOBAL TRADE RISKS; US COAL PRODUCERS TO GREATLY BENEFIT ONCE COMPLETE, SAYS WOOD MACKENZIE
Wood Mackenzie expects the recent cost overrun disputes around the Panama Canal expansion to be resolved with limited disruption due to the signific ...
Thursday, 20 February 14
SUPRAMAX: IN ASIA IS IMPROVING SIGNIFICANTLY AND TURNED FROM APS TO DOP MARKET
Handy
The activity is back in the market after Chinese holidays. Supramax in Asia is improving significantly and turned from APS to DOP market. We ...
Wednesday, 19 February 14
NEWCASTLE PORT SHIPPED 30% MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 17 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 18 February 14
PERUVIAN HIGH COMMISSIONER FOR MINING AFFAIRS WILL BE KEY NOTE SPEAKER AT THE COLOMBIAN COAL CONFERENCE 2014
Press Release: The High Commissioner for Mining Affairs in the Presidency of the Peruvian Council of Ministers, General (R) Daniel Urresti Elera, ha ...
Monday, 17 February 14
US COAL PRODUCTION IN 2013 FELL TO ITS LOWEST LEVEL IN 20 YEARS
COALspot.com: U.S coal production for 2013 totaled an estimated 996 million short tons (MMst), 21 MMst (2%) lower than in 2012. It is the first time ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- PTC India Limited - India
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Parliament of New Zealand
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- White Energy Company Limited
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
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