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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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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Holcim Trading Pte Ltd - Singapore
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Australian Coal Association
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
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