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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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Tuesday, 28 January 14
DRY BULK SHIP OWNERS RETREAT TO OLD 'HABITS', REFUSING TO DEMOLISH OLD VESSELS, THREATENING MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
If one thing is clear as we reflect on the 2013 shipping markets, it's that ship owners took advantage of low prices, in order to acquire newer ton ...
Monday, 27 January 14
MERCATOR SINGAPORE REPORTS 52% INCREASE IN EBITDA FOR Q3 FY 2014 AS COMPARED TO PREVIOUS QUARTER
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company that operates a fleet of fourteen d ...
Monday, 27 January 14
13TH CLEAN COAL FORUM 2014
COALspot.com: (Press Release) - Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12 &13 2014 in Beijing, China. We a ...
Monday, 27 January 14
Q3 & Q4 API 8 CFR SOUTH CHINA COAL SWAPS CONTINUE TO REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.45 percent month on month and closed at US$ 79.05 per mt as on Frid ...
Monday, 27 January 14
Q3 2014 SUB-BIT INDONESIA COAL SWAP LOST GROUND, ENDS AT $60 PMT
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost 2.29% pmt month on month on Friday 24 January 2014. Th ...
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- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Australian Coal Association
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- The University of Queensland
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- White Energy Company Limited
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
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