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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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Wednesday, 22 January 14
HANDY/SMAX: TALK OF RATES INDICATES A STEADY TO FIRMING TREND - INTERMODAL
Last week closed off on the red once more for the Dry Bulk market, which continues to see freight rates trying to get steady feet. Nonetheless, with ...
Wednesday, 22 January 14
EXPORT BAN ON UNPROCESSED MINERALS EFFECTIVE 12 JANUARY 2014 - THREE - YEAR REPRIEVE FOR SOME, BUT UNCERTAINTY REMAINS: PWC
COALspot.com: On 11 January 2014, only hours before a long-debated ban on the export of unprocessed minerals was to come into effect, the Government ...
Wednesday, 22 January 14
DRY SECTOR: SENTIMENT REMAINS STRONG - INTERMODAL
As we have now entered 2014 and the Chinese are soon entering their Year of the Horse (sit tight for the ride!), it is a great opportunity to see ho ...
Wednesday, 22 January 14
SGX SUCCESSFULLY LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore exchanged announced that, SGX Freight Futures were successfully launched on 20 January 2014, and the first trade ...
Tuesday, 21 January 14
PORT OF NEWCASTLE SHIPPED SLIGHTLY MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 20 January 14, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2. ...
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- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Mercator Lines Limited - India
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Carbofer General Trading SA - India
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
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