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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, 26 January 23
AUSTRALIA'S CORONADO GLOBAL SEES COAL PRICES RISING ON RESUMING CHINA IMPORTS - REUTERS
Australia’s Coronado Global Resources said on Tuesday resuming metallurgical coal imports to China would likely push sea-borne coal prices hi ...
Monday, 23 January 23
CHINA'S MAJOR COAL-PRODUCING PROVINCE ACCELERATES DIGITAL TRANSFORMATION - XINHUA
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-the-clock t ...
Monday, 23 January 23
CHINA'S COAL-RICH PROVINCE SEES COAL PRODUCTION INCREASE IN 2022 - XINHUA
North China’s coal-rich province of Shanxi saw its coal production hit 1.31 billion tonnes in 2022, up 8.7 percent year on year, local author ...
Wednesday, 18 January 23
MARKET INSIGHT - INTERMODAL
From Feb 5, another price cap will be introduced to Russian fuels and oil products, adding to the one for crude oil, already in place from Dec. 3. ...
Tuesday, 17 January 23
FRAUD IS THE BIGGEST THREAT TO CARGO LOSSES - TT CLUB
The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within ...
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- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- VISA Power Limited - India
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Minerals Council of Australia
- Australian Coal Association
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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