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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, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
Thursday, 22 December 22
AN OVERVIEW OF THE LNG MARKET - VESSELSVALUE
LNG values have continued to strengthen, spurred by skyrocketing earnings that have surpassed last year’s record breaking peaks. In November, ...
Thursday, 22 December 22
COKING COAL SLUMPS AS TALKS ON AUSTRALIA-CHINA TRADE RIFT LOOM - REUTERS
Chinese coking coal futures dropped more than 3 per cent on Tuesday (Dec 20), extending losses, as supply of the steelmaking input might increase i ...
Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited ...
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- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- White Energy Company Limited
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
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