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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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Wednesday, 20 November 13
TAIPOWER TO IMPORT 0.825 MMT OF 5000 GAR COAL FOR Q2' 14
COALspot.com: Taiwan Power Company intends to procure 825,000 metric tons of general sub-bituminous coal with calorific value not lesser than 5,000 ...
Wednesday, 20 November 13
CAPES AND PANAMAXES SOFTENING; SMALLER SIZE SEGMENTS FIRMING FURTHER - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable- )
The BDI has closed off the week on the red, with rates for Capes and Panamaxes softening and those fo ...
Tuesday, 19 November 13
INDONESIAN GOVERNMENT'S DECLARED COAL PRICE REFERENCE UP 1.98% IN NOVEMBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.52 / MT ...
Tuesday, 19 November 13
WEEKLY COAL EXPORTS FROM NEWCASTLE PORT INCREASED BY 20.59%
COALspot.com: In the week ended November 18, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.92& ...
Tuesday, 19 November 13
SHIP OWNER POUR MORE MONEY INTO DRY BULK CARRIER ACQUISITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The recent dry bulk market's rally, coupled with an expected fall in oversupply and robust cargo demand has boosted ship owners' optimism on the l ...
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- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Minerals Council of Australia
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
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