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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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Sunday, 05 January 14
API 8 CFR SOUTH CHINA COAL SWAP FOR Q3 DELIVERY CLOSED $ 80.05, A $ 0.90 LOWER THAN Q1 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 1.40 percept day on day closed at US$ 80.95 per mt as o ...
Sunday, 05 January 14
CENTRAL BUREAU OF INVESTIGATION OF INDIA REGISTERS CASES IN CONNECTION WITH ALLEGED SUPPLY OF LOW QUALITY INDONESIAN COAL BY A PRIVATE COMPANY TO NTPC & NSPCL
COALspot.com: The Central Bureau of Investigation of India has registered two cases regarding alleged supply of low quality imported Indonesian coal ...
Saturday, 04 January 14
THE INDONESIAN GOVERNMENT TO DOWNSIZE ITS COAL PRODUCTION TARGET TO 400 MMT THIS YEAR
COALspot.com: Indonesia to downsize its coal production target to 400 million tons in 2014, lower than the production in 2013, which stood at 421 mi ...
Friday, 03 January 14
IN 2013 RBCT HAS, FOR THE FIRST TIME, EXPORTED MORE THAN 70 MILLION TONS OF COAL
COALspot.com: South Africa's Richards Bay coal terminal, the world’s largest single coal exporting terminal shipped 6.788 million tonnes of c ...
Wednesday, 01 January 14
COAL & OIL TO SET UP ANOTHER 1,600 MW POWER PLANT IN INDIA - VENKATARAMANI
COALspot.com: Dubai-based Coal & Oil (C&O) Group is planning to make additional investment of around US$ 1.61 billion to set up 1,600 mega w ...
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- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
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