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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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Monday, 10 February 14
Q1 2015, API 8 CFR SOUTH CHINA COAL SWAP CLOSED AROUND $ 2 HIGHER THAN Q2 14 PRICE
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 2.61 percent month on month and closed at US$ 77.28 per mt as on Frid ...
Monday, 10 February 14
SUPRAMAX STILL AT AROUND US$ 5K + BB 50K DELIVERY KALIMANTAN FOR A TRIP TO INDIA - CAPT. REDDY
COALspot.com: The BDI was down by 1.71 pct and closed at 1091 points week ended 7 February 2014. The BDI seemed to reach the bottom as the cape inde ...
Saturday, 08 February 14
U.S PRODUCED 84.5 MMMST OF COAL IN JANUARY; 2.05% UP MONTH ON MONTH, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Friday, 07 February 14
DRY BULK MARKET ON ' REVERSE' MODE DUE TO CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its uninspiring mood throughout yet another week, with the Baltic Dry Index (BDI) hovering slightly above the 1,000-poi ...
Thursday, 06 February 14
INDONESIA'S BAN ON THE EXPORT OF RAW MINERAL ORES COMES INTO FORCE - INCE & CO
COALspot.com: On 12 January 2014, the ban on the export of unprocessed mineral ores came into effect in Indonesia. This ban enforces the Mining Law ...
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- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Australian Coal Association
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Ministry of Transport, Egypt
- White Energy Company Limited
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Economic Council, Georgia
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