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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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Sunday, 26 January 14
FREIGHT RATES FALL FURTHER ON LACK OF CARGOES - SOLYM CARRIERS
COALspot.com: The freight market has continued to soften further this week with BDI down by 12.31 pct. BDI was closed at 1,246 points week ended 24 ...
Friday, 24 January 14
US COAL PRODUCTION UP 3.9% ON WEEK IN WEEK ENDED SATURDAY - EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.1 million short tons (mmst) of coal in ...
Friday, 24 January 14
DRY BULK MARKET STRUGGLING TO FIND FIRM FOOTING IN START OF 2014 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been faltering since the start of 2014, struggling to hold its ground as low seasonal demand has hindered further growth in ...
Thursday, 23 January 14
PANAMAX : THIS WEEK THE ACTIVITY CAME DOWN DRAMATICALLY - FEARNRESEARCH
Handy
With the Chinese New Year approaching the activity and rate levels are sliding in both hemispheres. Rates in the Atlantic have knocked off so ...
Thursday, 23 January 14
30 DAYS LEFT TO REGISTER FOR PACIFIC BASIN COAL CONFERENCE
COALspot.com: (Press Release) : IHS Inc. (NYSE: IHS), the leading global source of information and analysis, will host the Pacific Basin Coal Confer ...
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- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- PTC India Limited - India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
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