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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, 17 December 13
NEWCASTLE COAL EXPORTS UP 37.83% WEEK ON WEEK
COALspot.com: In the week ended December 16, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.45 ...
Monday, 16 December 13
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 0.53 IN A WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 0.91 pmt month on month on Friday 13 December 2013 ...
Monday, 16 December 13
API 8 CFR SOUTH CHINA COAL Q3' 14 DELIVERY PRICE CLOSED $1.63 LESSER THAN Q1' 14 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 5.34 percept month on month as on Friday 13 December 2013. ...
Sunday, 15 December 13
SUPRAMAX'S FREIGHT RALLY COMES TO AN END THIS WEEK
COALspot.com: The BDI was up by 7 pct closing at 2,330 points week on week and the cape index was also up by 10.51 points and closed at 4,246 points ...
Friday, 13 December 13
HARD COAL : VOLUMES POSSIBLY AT RECORD-BREAKING HIGH; PRICES POSSIBLY AT A RECORD-BREAKING LOW - VDKI
Press Release : World Hard Coal Market 2013: volumes possibly at record-breaking high, prices possibly at a record-breaking low. German and UK impor ...
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- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Deloitte Consulting - India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
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