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