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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, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
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- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Australian Coal Association
- MS Steel International - UAE
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Economic Council, Georgia
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- The Treasury - Australian Government
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
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