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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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- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
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