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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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Tuesday, 07 January 14
INDONESIA RAISES COAL PRICE THIS MONTH
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.59 / MT ...
Tuesday, 07 January 14
NEWCASTLE COAL TERMINAL'S COAL EXPORTS SLIDE TO 3.54 MMT W/E 30 DECEMBER 13
COALspot.com: In the week ended December 30, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.54 ...
Tuesday, 07 January 14
US COAL OUTPUT SLIDES 9 PCT WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.8 million short tons (mmst) of coal in ...
Monday, 06 January 14
ARGUS LAUNCHES SPOT CFR EAST COAST INDIA COAL ASSESSMENTS
COALspot.com: Global energy and commodity news and price reporting agency Argus has announced today that, the company has launched CFR coal assessme ...
Monday, 06 January 14
INDONESIAN COAL SWAPS SLIDE TO $ 61.25 FOR Q4' 14 DELIVERY
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.32 pmt month on month on Friday 3 January 2014. Th ...
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- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Planning Commission, India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
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