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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, 20 February 14
LENGTHY DELAYS TO PANAMA CANAL EXPANSION POSE GLOBAL TRADE RISKS; US COAL PRODUCERS TO GREATLY BENEFIT ONCE COMPLETE, SAYS WOOD MACKENZIE
Wood Mackenzie expects the recent cost overrun disputes around the Panama Canal expansion to be resolved with limited disruption due to the signific ...
Thursday, 20 February 14
SUPRAMAX: IN ASIA IS IMPROVING SIGNIFICANTLY AND TURNED FROM APS TO DOP MARKET
Handy
The activity is back in the market after Chinese holidays. Supramax in Asia is improving significantly and turned from APS to DOP market. We ...
Wednesday, 19 February 14
NEWCASTLE PORT SHIPPED 30% MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 17 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 18 February 14
PERUVIAN HIGH COMMISSIONER FOR MINING AFFAIRS WILL BE KEY NOTE SPEAKER AT THE COLOMBIAN COAL CONFERENCE 2014
Press Release: The High Commissioner for Mining Affairs in the Presidency of the Peruvian Council of Ministers, General (R) Daniel Urresti Elera, ha ...
Monday, 17 February 14
US COAL PRODUCTION IN 2013 FELL TO ITS LOWEST LEVEL IN 20 YEARS
COALspot.com: U.S coal production for 2013 totaled an estimated 996 million short tons (MMst), 21 MMst (2%) lower than in 2012. It is the first time ...
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- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
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