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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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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
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 ...
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- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- The University of Queensland
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Petron Corporation, Philippines
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