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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, 08 January 24
KOSPO TO BUY 80000 MT OF INDONESIAN LOW CALORIFIC VALUE COAL FOR FEB 2024
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for the supply of Indonesian Low Calorific Value Coal from qualified suppliers for Korean ...
Monday, 08 January 24
SEABORNE TRADE REACHES 12.4BN TONNES - CLARKSONS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
Monday, 08 January 24
CAPESIZES START THE NEW YEAR ON POSITIVE NOTE - BALTIC EXCHANGE
Capesize
This week the capsize market has been marked by a mix of activities and challenges. Despite a slow start following the Christmas and N ...
Friday, 05 January 24
MORGAN STANLEY SEES LOWER OIL PRICES IN 2024 ON OVERSUPPLY CONCERNS - REUTERS
Morgan Stanley sees Brent crude prices anchored near $80 per barrel in the first half in 2024 before declining towards the end of the year as it ex ...
Friday, 05 January 24
INDIA'S COAL OUTPUT RISES NEARLY 11 PC IN DEC TO 92.87 MT - PTI
India’s coal production increased by 10.75 per cent to 92.87 million tonne in December 2023 as compared to the year-ago period, an official s ...
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- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Planning Commission, India
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
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