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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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Sunday, 08 January 23
ELEVATED COAL PRICE A DRAG ON MARGINS OF DOMESTIC BASE METAL PLAYERS: ICRA
The increased price of coal continue to be a drag on the margin of domestic base metal players with no immediate relief in sight, rating agency ICR ...
Monday, 02 January 23
CHINA’S COAL CONSUMPTION TO PEAK BY 2035: REPORT - REUTERS
China’s primary energy consumption is likely to peak at nearly 6.03 billion tonnes of standard coal between 2030 and 2035, refining giant Chi ...
Thursday, 29 December 22
INDIA'S COAL DEMAND LIKELY TO PEAK BETWEEN 2030-2035: MINISTER - ANI
The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralha ...
Thursday, 29 December 22
RIO TINTO AND PARTNERS COULD RECEIVE AS MUCH AS $450M IN GOVERNMENT COMPENSATION FOR COAL PRICE CAP - THE GUARDIAN
Compensation payments for the Gladstone power plant remain the sticking point in the federal government’s coal price cap compensation negotia ...
Wednesday, 28 December 22
MARKET INSIGHT - INTERMODAL
The United Nations Conference on Trade and Development (UNCTAD) published a Global Trade Update on December 13th highlighting that global trade wou ...
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- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
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