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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, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
Wednesday, 22 March 23
WILL LOWER GAS PRICES SPARK SWITCHING IN EUROPE AND ASIA?
Record high prices devastated demand for gas and LNG across Asia and Europe last year. But with prices falling, companies are starting to re-evalua ...
Monday, 20 March 23
NTPC MULLS 5.4 MILLION TONNES COAL IMPORT IN FIRST HALF OF 2023-24: PTI
State-run power giant NTPC is planning to import around 5.4 million tonnes of coal to meet the supply shortage during the first half 2023-24 fiscal ...
Monday, 20 March 23
S. AFRICA’S EXXARO RESOURCES SAYS COAL PRICES COOLING OFF - REUTERS
South Africa’s Exxaro Resources on Thursday posted a 28% jump in 2022 profit after seeing average coal prices surge more than 150%, but warne ...
Saturday, 18 March 23
RUSSIAN LNG EXPORTS TO EUROPE REMAIN HIGH - VESSELS VALUE
Russian LNG exports to Europe remained at very high levels in February at 3.6 million CBM, following a 13 month high in January of 4.1 million CBM. ...
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- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- PTC India Limited - India
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- The University of Queensland
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
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