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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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- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- VISA Power Limited - India
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Petron Corporation, Philippines
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Australian Coal Association
- Electricity Authority, New Zealand
- PTC India Limited - India
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
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