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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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Wednesday, 21 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
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- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- The University of Queensland
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- VISA Power Limited - India
- MS Steel International - UAE
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
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