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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, 30 January 14
PANAMAX MARKET IS SOFTENING ON LESS ACTIVITY IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
In the Atlantic rates have been slowly sliding but ows can still achieve decent money for TArv´s. USG positions still being fixed in re ...
Thursday, 30 January 14
TANKER PROFITABILITY IS THE 'MILLION-DOLLAR' QUESTION FOR SHIP OWNERS THIS YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market conditions are expected to remain challenging throughout the year for tanker owners, but even more pressing will be the issue of a ...
Tuesday, 28 January 14
GLOBAL COKING AND STEAM COAL PRODUCTION HAVE GROWN 2% TO 3% TO ABOUT 7.1 BILLION TONNES AS OF THE END OF 2013 - VDKI
COALspot.com (Press Release): Initial figures on the world hard coal market at the VDKi ((Association of Coal Importers - German) New Year’s R ...
Tuesday, 28 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS JUMP 13.75% WEEK ON WEEK
COALspot.com: In the week ended 27 January 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 28 January 14
RESOURCE NATIONALISM OR PROTECTIONISM FOR THE MINING AND EXTRACTIVES INDUSTRY - JOHN WHITTAKER & MICHAEL SWANGARD
Resource nationalism or protectionism for the mining and extractives industry as well as soft commodities sector and the oil industry.
‘Res ...
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- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- The University of Queensland
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Deloitte Consulting - India
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