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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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Tuesday, 17 January 23
CHINA'S SHANXI TARGETS 2023 COAL PRODUCTION OF NEARLY 1.37B TONS - XINHUA
China’s coal-rich province of Shanxi has set a coal production target of nearly 1.37 billion metric tons for 2023, according to a government ...
Tuesday, 17 January 23
MARKET INSIGHT - INTERMODAL
Rumor has it that the New Year has come, to set the pace in, for Russia to continue hostilities against Ukraine. Ten months on the go, into Russia& ...
Tuesday, 17 January 23
INDONESIA IS ACCOUNTING FOR 32.3% OF THE GLOBAL SEABORNE COAL MARKET IN 2022 - BENCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, Benchero ...
Tuesday, 10 January 23
INDONESIAN HBA IS SEEING A SPIKE IN JANUARY 2023 INSTEAD OF A SIGNIFICANT FALL IN DECEMBER 2022
COALspot.com: Indonesian Coal Price Reference up 8.43% in January 2023.
HBA is seeing a dramatic spike in January 2023 i ...
Sunday, 08 January 23
INDIAN COAL POWER PLANTS SHOULD BE COMPENSATED FOR 2022 FORCED GENERATION – REGULATOR : REUTERS
Indian power plants that rely on imported coal should be fully compensated when forced to supply electricity, the country’s power regulator s ...
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- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Posco Energy - South Korea
- Minerals Council of Australia
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
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