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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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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- The University of Queensland
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- PTC India Limited - India
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
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