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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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Monday, 20 January 14
SUB-BIT INDONESIA COAL SWAP SEEN LOWER IN 2ND HALF OF 2014
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.78 pmt month on month on Friday 17 January 2014. T ...
Monday, 20 January 14
THE CFR SOUTH CHINA COAL MARKET APPEARS TO HAVE LOST DIRECTION
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 4.25 percept month on month and closed at US$ 79.48 per mt as ...
Sunday, 19 January 14
FREIGHT MARKETS SEE CONTINUED WEAK PERFORMANCE
COALspot.com: The market has continued to soften particularly in the far East/SE Asia sector.
The BDI was down 6 pct week on week, the index was ...
Friday, 17 January 14
US COAL PRODUCTION DOWN WEEK ON WEEK: EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.3 million short tons (mmst) of co ...
Friday, 17 January 14
DRY BULK MARKET ENDS DECLINE, BOUNCES BACK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a rough start to the New Year for the dry bulk market, which was supposed to be on the verge of rallying to new heights this year, on the ...
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- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Planning Commission, India
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- GMR Energy Limited - India
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
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