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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, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
Friday, 24 November 23
WHY AUSTRALIA'S COAL MINES ARE GETTING BIGGER - IEEFA
Australia’s largest coal mines are getting larger. Mines in New South Wales (NSW) are ramping up production following the state’s recov ...
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- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
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