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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, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and ...
Thursday, 27 February 14
NEWCASTLE COAL EXPORTS SLIP 26.68 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 24 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2. ...
Wednesday, 26 February 14
SMALLER SIZE SEGMENTS HOLDING ON TO THEIR LEVELS; CAPES CORRECTING UPWARDS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable+)
The Dry Bulk market continued to improve this past week, on the back of rates for the smaller size s ...
Tuesday, 25 February 14
GBCE, A COAL UPGRADING TECHNOLOGY DEVELOPER, APPOINTS RICHARD BULMAN AS PROJECT DIRECTOR
Press Release: GB Clean Energy Ltd. (GBCE) announced today the appointment of Richard Bulman as Project Director. In this capacity Mr. Bulman ...
Tuesday, 25 February 14
ULTRAMAXES ARE THE 'WEAPON OF CHOICE' FOR DRY BULK SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a busy start in 2014, as the first month of the year was a rather active in terms of second hand vessel purchases and newbuilding orderin ...
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- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- The University of Queensland
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
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