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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, 26 November 13
EWP INVITES COAL BIDS FOR 2014 - 2018 DELIVERIES
COALspot.com: Korea East-West Power Co. Ltd (EWP) invited bids to supply 130,000MT of min 5,600kcal/kg (Sub)-bituminous Coal on NCV basis for March ...
Tuesday, 26 November 13
NEWCASTLE COAL EXPORTS SLIP 22.62% W-W
COALspot.com: In the week ended November 25, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.26 ...
Monday, 25 November 13
THE SUB-BIT INDONESIA COAL SWAP MOVEMENT IN YEAR 2014 IS STILL FAR FROM PROMISING
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 2.54 pmt month on month on Friday 22 Novemb ...
Sunday, 24 November 13
CFR SOUTH CHINA COAL SWAPS FOR Q4' 14 DELIVERY PRICE SHOWS A NEGATIVE TREND WEEK ON WEEK AND FLAT ON D-D
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.13 percept d-d on Friday 22 November 2013. The CFR South ...
Sunday, 24 November 13
SUPRAMAX FREIGHT RATES REMAINED FIRM FROM INDONESIA TO INDIA AND CHINA - SOLYM
COALspot.com: The freight market was fairly steady except for the Supramax in SE Asia region which continued to remain firm. The BDI was down by 1.5 ...
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- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- The University of Queensland
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- PTC India Limited - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Eastern Coal Council - USA
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Cement Manufacturers Association - India
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
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