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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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Saturday, 18 March 23
HEDGE TO OFFSET LNG VOLATILITY, TRADERS TOLD - BALTIC EXCHANGE
A shift in imports from Asia to Europe led to significant volatility in liquefied natural gas shipping last year, prompting industry experts to urg ...
Friday, 17 March 23
INDONESIAN COAL PRICE REFERENCE UP AROUND 2.17% IN MARCH 2023
COALspot.com: Indonesian Coal Price Reference up around 2.17% in March 2023.
According to the new HBA regulation No. 41.K/MB.0 ...
Saturday, 11 March 23
MARKET INSIGHT - INTERMODAL
Uncertainty over the recovery of Chinese demand, demand destruction in Europe, as well as weather conditions will pivot the LNG market this summer. ...
Wednesday, 08 March 23
INDONESIAN COAL REFERENCE PRICE FORMULA HAS OFFICIALLY CHANGED
Indonesian Minister of Energy and Mineral Resources has officially changed the guideline for determining the benchmark price for the sale of coal c ...
Thursday, 02 March 23
INDIA'S SEABORNE CRUDE OIL IMPORTS IN 2022 INCREASED BY 11.5% YOY - BANCHERO COSTA
2022 has turned out to be a very positive year for crude oil trade, despite the surging oil prices and risks of economic recession, Banchero Costa ...
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- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Planning Commission, India
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
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