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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.
If you believe an article violates your rights or the rights of others, please contact us.
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Monday, 17 February 14
Q1 2015 COAL SWAPS CLOSED $ 2.21 HIGHER THAN Q2 2014 SWAPS
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 3.16 percent month on month and closed at US$ 76.12 per mt as o ...
Sunday, 16 February 14
SUPRAMAX : THE FAR EAST/SE ASIA CHARTER RATES FIRMED UP
COALspot.com: The freight market had a mixed reaction this week with BDI increased by 1.37 pct and closing at 1106 points on Valentine day. The cape ...
Friday, 14 February 14
US COAL PRODUCTION STILL SLIPPING
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.9 million short tons (mmst) of coal in ...
Thursday, 13 February 14
PANAMAX : NOT ENOUGH REQUIREMENTS TO KEEP THE ATLANTIC MARKET FLOATING - FEARNLEYS AS
Handy
After the Chinese holidays the week started on a positive note. Owners are talking higher rates but chrtrs are still somehow reluctant to mov ...
Thursday, 13 February 14
DRY BULK MARKET FACES BETTER PROSPECTS ON THE BACK OF IMPROVING DEMAND AND SUPPLY BALANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has started off the New Year on the "left foot", with the strong finish of 2013 proving to be unsustainable, on the ba ...
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- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Planning Commission, India
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
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