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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, 04 March 14
AUSTRALIA'S NPC TO SHIP 11.85 MMT OF COAL IN MARCH
COALspot.com: In the week ended 3 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 3.15 m ...
Tuesday, 04 March 14
HIGHER PRICES AND STEADY FREIGHT RATES LEAD SHIP OWNERS TO TEMPORARILY HALT SECOND HAND VESSEL PURCHASES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the dry bulk market has kept on improving, but at a very slow rate, ship owners have elected to take a step back from the flurry of the S&P m ...
Monday, 03 March 14
SUB-BIT INDONESIA COAL SWAP (FOB) FOR AVERAGE Q115 CLOSED AT $60.28, $ 1.70 HIGHER THAN 2Q14
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 slightly corrected do ...
Monday, 03 March 14
API 8 CFR SOUTH CHINA SWAPS: Q4' 2014 DELIVERY CLOSED US$ 1.40 HIGHER COMPARED TO Q2' 2014 DELIVERY
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 1.90 percent month on month and closed at US$ 76.27 per mt as on Fr ...
Monday, 03 March 14
COSTS LIABILITY PASSING DOWN A CHARTERPARTY CHAIN - SKULD
KNOWLEDGE TO ELEVATE
Provided that charterparties are on back to back terms, and the claim is successful, liability for costs incurred shoul ...
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- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
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