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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, 28 January 14
DRY BULK SHIP OWNERS RETREAT TO OLD 'HABITS', REFUSING TO DEMOLISH OLD VESSELS, THREATENING MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
If one thing is clear as we reflect on the 2013 shipping markets, it's that ship owners took advantage of low prices, in order to acquire newer ton ...
Monday, 27 January 14
MERCATOR SINGAPORE REPORTS 52% INCREASE IN EBITDA FOR Q3 FY 2014 AS COMPARED TO PREVIOUS QUARTER
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company that operates a fleet of fourteen d ...
Monday, 27 January 14
13TH CLEAN COAL FORUM 2014
COALspot.com: (Press Release) - Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12 &13 2014 in Beijing, China. We a ...
Monday, 27 January 14
Q3 & Q4 API 8 CFR SOUTH CHINA COAL SWAPS CONTINUE TO REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.45 percent month on month and closed at US$ 79.05 per mt as on Frid ...
Monday, 27 January 14
Q3 2014 SUB-BIT INDONESIA COAL SWAP LOST GROUND, ENDS AT $60 PMT
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost 2.29% pmt month on month on Friday 24 January 2014. Th ...
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- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Planning Commission, India
- Bhatia International Limited - India
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
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