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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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Saturday, 30 November 13
NTPC STARTED IMPORTING COAL THROUGH NW1 FOR ITS FARAKKA POWER PLANT
COALspot.com: In a pioneering and path breaking operation, the very first consignment of about 69,060 metric tons of imported coal bought by MV HUAY ...
Friday, 29 November 13
DRY BULK MARKET BACK ON HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market is strengthening as a result of higher demand for Capesize vessels. The BDI (Baltic Dry Index) was up by 146 points yesterday, e ...
Wednesday, 27 November 13
DRY SEGMENTS EXCEPTION OF PANAMAXES, REMAINED OVERALL STABLE - INTERMODAL
COALspot.com : The Dry Bulk market closed off the week in the red, albeit the decrease noted was of short scale. With the exception of Panamaxes, th ...
Wednesday, 27 November 13
US WHEAT IMPORTS TO BRAZIL, REACHED A 35 - YEAR HIGH - EVA TZIMA
COALspot.com: As I am going through a number of dry market fixtures reported since the beginning of October, my eyes instinctively stop where they d ...
Wednesday, 27 November 13
SHIP OWNERS ONCE AGAIN TURN TO DRY BULK CARRIERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners once again turned to more dry bulk carrier ordering over the course of the past week, as more and more appear convinced of the industry ...
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- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Aditya Birla Group - India
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Australian Coal Association
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
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