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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, 15 January 14
INDONESIAN MINING LAW AVERTS BOP PRESSURE, RISKS REMAIN, FITCH SAYS
The last-minute intervention at the weekend by Indonesia's politicians to avert a significant disruption of mining activity and exports, should lim ...
Wednesday, 15 January 14
Q3 AND Q4 INDONESIAN COAL SWAPS DECLINE MONTH ON MONTH
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 1.23 pmt month on month on Friday 10 January 2014. T ...
Wednesday, 15 January 14
PANAMAX: PACIFIC - REMAINED QUIET; ATLANTIC - CONTINUED THEIR RETREAT
COALspot.com: The holiday hangover seems well underway for the Dry Bulk market that saw more ground being lost this past week. The BDI has closed of ...
Tuesday, 14 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS FALL 18.28 %
COALspot.com: In the week ended January 13, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.67 ...
Monday, 13 January 14
INDONESIAN ORE BAN TO HAVE LIMITED IMPACT ON CHINESE ALUMINIUM PRODUCERS, FITCH RATINGS SAYS
COALspot.com: Fitch Ratings says today that Indonesia's ban on exports of unprocessed mineral ore will have limited impact on Chinese aluminium pro ...
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- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Australian Coal Association
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
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