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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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Wednesday, 12 February 14
NEW BUILDING ORDERS REACHING NEW POST-CRISIS HEIGHTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners are looking to take advantage of the last few attractive deals in the new building market, before prices start climbing to new highs and ...
Wednesday, 12 February 14
2013 WAS THE YEAR OF PRIVATE EQUITY FUNDING - TIMOS PAPADIMITRIOU
COALspot.com: People say that money makes the world go round. Well, can it be that it’s the other way around? Is it possible that money needs ...
Tuesday, 11 February 14
INDONESIAN COAL SWAP SHOWS STRONG GROWTH IN 2014 SECOND HALF
COALspot.com – Swaps prices slide for thermal coal loading from Indonesia, the world’s largest exporter of the fuel, according SGX.
T ...
Tuesday, 11 February 14
AUSTRALIA'S NEWCASTLE COAL EXPORTS SLIDE AROUND 15% WEEK ON WEEK
COALspot.com: In the week ended 10 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 11 February 14
SHIP OWNERS INVEST IN 447 NEWBUILDINGS AND SECOND HAND VESSELS DURING JANUARY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite a rough start to the year for the dry bulk freight market and lackluster performance from most other shipping sub-segments, ship owners have ...
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- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
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