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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 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
Saturday, 18 February 23
2023 MARINE FUEL MARKET PREDICTIONS - JOHN BERGMAN, AURAMARINE
The drive for decarbonisation we witnessed in 2022 has continued into 2023, demonstrating the shipping’s industry positive strides in the fas ...
Saturday, 28 January 23
COAL GROWTH BLIP NOT TO BE REPEATED - BALTIC EXCHANGE
As 2022 drew to a close, global coal demand looked set to end the year just 1.2% up on the previous year. But that small increase was enough to pus ...
Thursday, 26 January 23
CHINA'S COAL OUTPUT INCREASES IN DECEMBER 2022 - XINHUA
China’s raw coal output posted stable expansion in December 2022, official data showed.
The country produced 400 million tonne ...
Thursday, 26 January 23
COKING COAL NARROWS THE GAP ON THERMAL AS CHINA REOPENS - REUTERS
The premium of high-grade thermal coal over coking coal in Asia is shrinking as China’s re-opening and ending of a ban on imports from Austra ...
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- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- The University of Queensland
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Xindia Steels Limited - India
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
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