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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.
If you believe an article violates your rights or the rights of others, please contact us.
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Friday, 17 January 14
SPOT COAL PRICE TRENDS IN US VARY ACROSS KEY BASINS DURING 2013, SAYS EIA
COALspot.com: Spot steam coal price trends in US varied across key basins in 2013, a latest EIA report says. Compared with 2012, while total coal de ...
Thursday, 16 January 14
PANAMAX : THE GAP BETWEEN SPOT AND PERIOD HAS INCREASED IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
In the Atlantic we have seen rates slowly sliding on lack of enough fresh business. USG/Continent still paying excess 28k and seems on an upw ...
Thursday, 16 January 14
SHIP OWNERS SCRAP 1,119 SHIPS DURING 2013 ON THE BACK OF OVERSUPPLY ISSUES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Scrapping of older vessels is still the best bet that ship owners can make, in order to improve their newer vessels' fortunes, amid an oversupply o ...
Wednesday, 15 January 14
KOREA MIDLAND POWER CO INVITES BIDS FOR 360K MT OF SUB-BITUMINOUS COAL FOR ITS BORYEONG PLANT
COALspot.com : Korea Midland Power Co., Ltd. has invited bids through International open bidding for 360,000 Metric Tons (MT) of sub-bituminous ...
Wednesday, 15 January 14
CFR SOUTH CHINA COAL SWAPS FALL BY 6.57% MONTH ON MONTH
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 6.57 percept month on month and closed at US$ 78.90 per mt as ...
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- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
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