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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, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Australian Coal Association
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
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