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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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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- The University of Queensland
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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