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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, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- The University of Queensland
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Planning Commission, India
- Aditya Birla Group - India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
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