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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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Monday, 09 December 13
SUB-BIT INDONESIA COAL SWAP FOR Q3' 14 DELIVERY CLOSED $ 0.57 LESSER THAN Q1 CLOSING
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.49 pmt month on month on Friday 6 Decembe ...
Sunday, 08 December 13
SOUTH CHINA COAL SWAPS SHOW A DECLINE TREND IN Q2 & Q3' 14
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 6.76 percept month on month as on Friday 6 December 2013. T ...
Sunday, 08 December 13
RBCT SHIPPED 63.446 MMT OF COALS YTD
COALspot.com - Richards Bay Coal Terminal (RBCT), the world's single largest coal terminal has shipped 63,446,232 mt of coals YTD, according to por ...
Saturday, 07 December 13
SUPRAMAX SHIPS FOR EC INDIA TO CHINA ROUTE BEING FIXED AT AROUND US$ 13K - SOLYM
COALspot.com: The freight market continued to be firm due to high Iron ore demand. The cape index was up by almost 25 pct this week. The grain seaso ...
Saturday, 07 December 13
A RARE TIME IN RECENT SHIPPING MARKET HISTORY: BOTH DRY BULK AND VLCC TANKER EARNINGS ARE ON THE RISE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Around this time of year, back in 2008, i.e. five years ago, the shipping markets were plagued with the aftermath of the global financial crisis tha ...
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- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Sical Logistics Limited - India
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
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