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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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Thursday, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Planning Commission, India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
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