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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, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- Marubeni Corporation - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Minerals Council of Australia
- ICICI Bank Limited - India
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Economic Council, Georgia
- The University of Queensland
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
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