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