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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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Friday, 06 December 13
INDONESIAN PARLIAMENT REJECTED A GOVERNMENT PROPOSAL TO EASE THE BAN ON EXPORTING UNPROCESSED ORE
COALspot.com: Indonesian House of Representatives rejected a proposal from Energy and Mineral Resources Minister Jero Wacik on to ease the ban on ex ...
Friday, 06 December 13
THE MINISTRY OF ENERGY & MINERAL RESOURCES OF INDONESIA FIXED DEC'13 HBA AT US$ 80.31
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 2.18 / MT ...
Friday, 06 December 13
US PRODUCED APPROXIMATELY 82.8 MILLION SHORT TONS OF COAL IN NOVEMBER 2013
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.00 million short tons (mmst) of coal in ...
Friday, 06 December 13
PANAMAXES HAVE BEEN THE ' WEAPON OF CHOICE' BY MOST DRY BULK SHIP OWNERS DURING 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Low ship prices, the direct consequence of subdued freight rates for the larger part of 2013 have been the main driving force behind this year's ag ...
Thursday, 05 December 13
PANAMAX : THE FIRM TENDENCY CONTINUES - FEARNRESEARCH
Handy
It has been an active week for the Supramax and Handysize segment. USG is almost boiling and charterers looking to cover their December stems ...
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- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- The University of Queensland
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- GMR Energy Limited - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Central Java Power - Indonesia
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