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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, 03 February 14
API 8 CFR SOUTH CHINA COAL SWAP CONTRACTS FALL
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.71 percent month on month and closed at US$ 78.87 per mt as on Frid ...
Monday, 03 February 14
COAL FREIGHT RATES REMAIN UNDER PRESSURE
COALspot.com: The BDI is fell 50 pct over last one month which seems to be one of the lowest fall in last few years.
The BDI was down by 11 ...
Friday, 31 January 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 19.2 MMST W-O-W
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.2 million short tons (mmst) of coal in ...
Friday, 31 January 14
DRY BULK MARKET STILL ON A FALL, EXPECTED TO WORSEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market is definitely in the doldrums since the start of the year, in what could only be described as a "lost" month for indus ...
Thursday, 30 January 14
JPU SETTLEMENT PRICE AS A BENCHMARK WILL DECLINE IN IMPORTANCE BUT REMAIN RELEVANT, SAYS WOOD MACKENZIE
JPU price will remain above spot, trending closer to spot till 2015 then increasing to 2035.
Japanese Power Utilities (JPU) are approaching a cru ...
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- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Planning Commission, India
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- PTC India Limited - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
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