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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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Monday, 18 November 13
SUB-BIT INDONESIA COAL SWAP LOST ON WEEK; MARGINALLY GAINED ON DAY
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.25 pmt month on month on Friday 15 Novemb ...
Sunday, 17 November 13
Q4' 14 API 8 CFR SOUTH CHINA COAL SWAP CLOSED $ 3.43 PMT (4.34 %) HIGHER THAN Q1' 14 SWAP
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.05 percept d-d on Friday 15 November 2013. The CFR South ...
Saturday, 16 November 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES FIRM DUE TO STRONG COAL ACTIVITIES
COALspot.com: The Cape and Panamax index was down this week and pulling down the BDI by about 5 pct. BDI was closed at 1507 points on Friday 1 ...
Friday, 15 November 13
DRY BULK MARKET STILL LINGERING ON, DESPITE PREDICTIONS OF NEW IMMINENT RALLY PRIOR TO THE YEAR'S END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet managed to stage a new comeback after its retreat from the recent multiyear highs. Yesterday, the industry's benchm ...
Friday, 15 November 13
US COAL PRODUCTION UP 2.59% WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.8 million short tons (mmst) of coal in ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- The University of Queensland
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Australian Coal Association
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
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