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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, 03 December 13
PORT OF NEWCASTLE IN QUEENSLAND SHIPPED 1.22 MMT MORE COAL W-W
COALspot.com: In the week ended December 2, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.49 ...
Tuesday, 03 December 13
U.S PRODUCED 900.80 MMST YEAR-TO-DATE
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.7 million short tons (mmst) of coal in ...
Monday, 02 December 13
SUB-BIT INDONESIA COAL SWAP DIFFERENCE BETWEEN Q1 AND Q3 DELIVERIES ARE VERY MARGINAL
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.67 pmt month on month on Friday 29 Novemb ...
Sunday, 01 December 13
API 8 CFR SOUTH CHINA COAL SWAP FOR Q2 AND Q3 DELIVERY SHOWS A DECLINE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.63 percept d-d on Friday 29 November 2013. The CFR South ...
Sunday, 01 December 13
PANAMAX RATES HAVE REBOUNDED - CAPT. REDDY
COALspot.com: The freight market was quite firm last week with all the indices increased. Cape Index was gained highest this week which supports inc ...
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- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Australian Coal Association
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Parliament of New Zealand
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
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