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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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Wednesday, 22 January 14
HANDY/SMAX: TALK OF RATES INDICATES A STEADY TO FIRMING TREND - INTERMODAL
Last week closed off on the red once more for the Dry Bulk market, which continues to see freight rates trying to get steady feet. Nonetheless, with ...
Wednesday, 22 January 14
EXPORT BAN ON UNPROCESSED MINERALS EFFECTIVE 12 JANUARY 2014 - THREE - YEAR REPRIEVE FOR SOME, BUT UNCERTAINTY REMAINS: PWC
COALspot.com: On 11 January 2014, only hours before a long-debated ban on the export of unprocessed minerals was to come into effect, the Government ...
Wednesday, 22 January 14
DRY SECTOR: SENTIMENT REMAINS STRONG - INTERMODAL
As we have now entered 2014 and the Chinese are soon entering their Year of the Horse (sit tight for the ride!), it is a great opportunity to see ho ...
Wednesday, 22 January 14
SGX SUCCESSFULLY LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore exchanged announced that, SGX Freight Futures were successfully launched on 20 January 2014, and the first trade ...
Tuesday, 21 January 14
PORT OF NEWCASTLE SHIPPED SLIGHTLY MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 20 January 14, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2. ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
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