Home Journeys Western Med / / La Belle Époque The Original South of France Tour de Force Country(ies): Italy, Monaco, France Local agent(s): Catalano Shipping Services Ah, the Riviera. Were the sun shines brighter, the sea sparkles bluer, and the people are impossibly glamorous. Where the only thing faster than the Ferraris on the corniche roads is the rate at which champagne disappears. Monaco. Cannes. St Tropez. Names famous with good reason. The roads seem perfect. The beaches are stunning. Even the air smells expensive. And yet, beneath all this decadence, there's undeniable charm: cobbled old towns, sleepy fishing villages, and a stunning landscape. It’s the ultimate blend of sophistication, history, and sheer, unapologetic indulgence. And that’s why, year after year, the rich, the famous (and those pretending to be both) keep coming back. Monaco Sanremo Villefranche-sur-Mer Antibes Cannes St Tropez Île de Porquerolles Sanremo Monaco Villefranche-sur-Mer Antibes Cannes St Tropez Île de Porquerolles Ah, the Riviera. Were the sun shines brighter, the sea sparkles bluer, and the people are impossibly glamorous. Where the only thing faster than the Ferraris on the corniche roads is the rate at which champagne disappears. Monaco. Cannes. St Tropez. Names famous with good reason. The roads seem perfect. The beaches are stunning. Even the air smells expensive. And yet, beneath all this decadence, there's undeniable charm: cobbled old towns, sleepy fishing villages, and a stunning landscape. It’s the ultimate blend of sophistication, history, and sheer, unapologetic indulgence. And that’s why, year after year, the rich, the famous (and those pretending to be both) keep coming back. Country(ies): Italy, Monaco, France Local agent(s): Catalano Shipping Services The Original South of France Tour de Force Known as la Città dei Fiori (City of Flowers), understated Sanremo is where old-school glamour meets a dash of delightful Italian disarray. The streets are lined with faded Belle Époque hotels, while cafés overflow with locals arguing loudly over espresso. Your berth in Portosole Marina is centrally located, with exclusive shopping along Corso Matteotti and the historic Casino di Sanremo within easy walking distance. Enjoy a lazy lunch at the Michelin-starred Paolo e Barbara on via Roma, before visiting Villa Nobel - a museum dedicated to Swedish inventor Alfred Nobel who lived here. Then a luxury spa treatment at the Royal Hotel. or a round at Circolo Golf degli Ulivi, before rejoining your yacht for dinner. Day 1 Sanremo A tiny nation where the world’s wealthiest naturally coalesce. There's an undeniable magic about the place. Both glamorous and ludicrous, and it’s the ultimate playground for those who think a Bugatti is a sensible runabout. One moment, you’re sipping Dom Pérignon '76 at the Café de Paris, the next, you’re strolling through the same tunnel where Ayrton Senna once danced on the edge of disaster. It’s flashy and over-the-top - and that’s precisely the point. Monaco isn’t just a destination. It’s a statement: je suis arrivé. Enjoy some downtime at the Oceanographic Museum and La Collection De Voitures - right by Port Hercule. Day 2 Monaco A place so absurdly beautiful it looks like it was designed by a Hollywood set designer with an unlimited budget. Nestled between Nice and Saint-Jean-Cap-Ferrat, this is where the Riviera dials down the excess of Monaco and swaps it for something altogether more refined. The bay is one of the deepest in the Med. Ashore, pastel-coloured buildings tumble down to the water, and charming little cafés serve seafood so fresh it practically waves at you. Atop Cap Ferrat, Villa Ephrussi de Rothschild is filled with priceless art. Villefranche-sur-Mer is the Riviera’s best-kept secret. A place where wealth merely whispers and never shouts. Day 3 Villefranche-sur-Mer Nestled between Nice and Cannes, Antibes has all the glamour of the Riviera but with an old-world charm that doesn’t try too hard. Step ashore at Port Vauban and you’re soon in the stunning medieval Old Town where cobbled streets lead you to chic boutiques. For lovers of culture, the nearby Picasso Museum sits proudly within the Château Grimaldi. Then there’s Cap d’Antibes, a scenic headland where the walking trails offer jaw-dropping views over the Med.If you really want to indulge, Hotel du Cap-Eden-Roc offers a range of stunning bars and restaurants. If you have money and taste, you’ll love Antibes. If you only have money, well, Cannes is just down the road… Day 4 Antibes Home of the most glamorous traffic jam on Earth - the Cannes Film Festival. Best avoided unless you’re part of that circus. The Boulevard de la Croisette is the centrepiece—a sun-drenched promenade lined with high-end boutiques. At one end is the charming Old Port, but large vessels must use Port Pierre Canto at the other end. Le Suquet (the old town) is charming, with cobbled streets, authentic French bistros, and panoramic views. Offshore, the Lérins islands offer an escape from the madness, complete with a fortress that once housed the mysterious Man in the Iron Mask – proving that even in the 17th century, Cannes had an exclusive guest list. Day 5 Cannes Once a sleepy fishing village, now the undisputed capital of excess. The harbour’s charming, but prepared to be gawped at by tourists when you're on board. The old town is a maze of cobbled streets, quaint cafés, and markets selling everything from truffle-infused cheese to handmade sandals. Nearby Pampelonne Beach (best reached by tender) is an institution. A place where bronzed bodies recline on perfectly arranged sunbeds while waiters at beach clubs sprint across the sand delivering magnums of Dom Pérignon. If you tire of the glitz, the surrounding countryside offers a retreat into vineyards and rolling hills. St Tropez's not just a destination: it’s a lifestyle. Day 6 St Tropez If St-Tropez is a wild party, Porquerolles is the gentle, sun-kissed morning after. Effortlessly beautiful, Porquerolles is what the French Riviera looked like before casinos and boutiques. Notre Dame beach has sugar-soft white sand and crystal-clear turquoise water. The diving’s excellent here. But there are no blinged-up beach clubs, and absolutely no traffic jams - because cars aren’t allowed. Instead, visitors swap Bugattis for bicycles, gliding along sun-dappled paths through pine forests and vineyards that produce some of the finest rosé in existence. It’s the perfect antidote to the excess of the Riviera: luxury served with a side of serenity. Day 7 Île de Porquerolles

All the world's major yacht and superyacht shows, conferences, races and rendezvous - listed in one place. A comprehensive guide to all the world's leading yacht and superyacht shows, races, conferences and related events. Such events are a must for those looking to buy or charter a yacht, or looking to source services such as yacht builders, naval architects or interior designers. Home Insights Events / / events Calendar This page aims to list all yacht-related events which may be of interest to our Members and their representatives. Click on any listing to go straight to the organiser's website. You can also see a map here . The Club has no commercial relationships with any organisers. Listings are not endorsements. Events can be subject to change or cancellation without notice, and may not take place every year. Please check with the organisers directly before making any arrangements. Have we missed an event? Please tell us . Singapore Yachting Festival Singapore 13 April 2025 10 April 2025 to Les Voiles de St Barth St Barths 19 April 2025 13 April 2025 to World Yachting Summit Monaco 17 April 2025 15 April 2025 to SeaYou Yacht Sales & Charter Days Genoa 24 April 2025 23 April 2025 to PalmaVela Palma 4 May 2025 25 April 2025 to MYBA Charter Show Sanremo 1 May 2025 28 April 2025 to Balearic Superyacht Forum Palma 30 April 2025 29 April 2025 to East Med Multihull & Yacht Charter Show Poros 2 May 2025 29 April 2025 to Palma Superyacht Village Palma 3 May 2025 30 April 2025 to BI World Superyacht Awards Venice 3 May 2025 2 May 2025 to Mediterranean Yacht Show Nafplion 7 May 2025 3 May 2025 to TYBA Yacht Charter Show Göcek 13 May 2025 9 May 2025 to Blue Design Summit La Spezia 15 May 2025 13 May 2025 to British Motor Yacht Show Southampton 18 May 2025 15 May 2025 to Limassol Boat Show Limassol 25 May 2025 22 May 2025 to Sanctuary Cove International Boat Show Gold Coast 25 May 2025 22 May 2025 to Giorgio Armani Superyacht Regatta Porto Cervo 31 May 2025 27 May 2025 to Venice Boat Show Venice 2 June 2025 29 May 2025 to MTB Superyachts 2025 Lake Maggiore 7 June 2025 4 June 2025 to Newport Charter Yacht Show Rhode Island 26 June 2025 23 June 2025 to The Superyacht Cup Palma 28 June 2025 25 June 2025 to Cowes Week Isle of Wight 8 August 2025 2 August 2025 to Safe Harbor Race Weekend Rhode Island 10 August 2025 8 August 2025 to The South Pacific Superyacht Rendezvous Fiji 29 August 2025 26 August 2025 to Maxi Yacht Rolex Cup Porto Cervo 13 September 2025 7 September 2025 to Cannes Yachting Festival Cannes 14 September 2025 9 September 2025 to Ibiza JoySail Ibiza 21 September 2025 18 September 2025 to Genoa International Boat Show Genoa 23 September 2025 18 September 2025 to Southampton International Boat Show Southampton 28 September 2025 19 September 2025 to Monaco Yacht Show Monaco 27 September 2025 24 September 2025 to Les Voiles de Saint-Tropez Saint-Tropez 5 October 2025 27 September 2025 to Croatia Yacht Show Zadar 1 October 2025 29 September 2025 to Salon Nautico Internacional de Barcelona Barcelona 12 October 2025 8 October 2025 to Olympic Yacht Show Lavrion 12 October 2025 9 October 2025 to Understanding Superyacht & Business Jet Tax Barcelona 15 October 2025 Rolex Middle Sea Race Valletta 18 October 2025 Fort Lauderdale International Boat Show Fort Lauderdale 2 November 2025 29 October 2025 to Superyacht Summit Türkiye Istanbul 12 November 2025 11 November 2025 to International Charter Expo Amsterdam 14 November 2025 12 November 2025 to METSTRADE Amsterdam 20 November 2025 18 November 2025 to Abu Dhabi International Boat Show Abu Dhabi 23 November 2025 20 November 2025 to Rolex Sydney Hobart Yacht Race Programme Sydney & Hobart 26 December 2025 boot Düsseldorf Düsseldorf 25 January 2026 17 January 2026 to Superyacht Design Festival Kitzbühel 3 February 2026 1 February 2026 to Discover Boating Miami International Boat Show Miami 15 February 2026 11 February 2026 to Superyacht Challenge Antigua Antigua 8 March 2026 3 March 2026 to China (Shanghai) International Boat Show Shanghai 1 April 2026 29 March 2026 to Dubai International Boat Show Dubai 12 April 2026 8 April 2026 to Superyacht Technology Show Barcelona TBC St Barths Bucket St Barths TBC Improving Yacht Crew Retention Nice TBC The Turkey Superyacht Forum Istanbul TBC International Yacht & Aviation Awards Cannes TBC Explorer Yachts Summit Monaco TBC Improving Yacht Crew Retention & Welfare US Fort Lauderdale TBC Managing Tomorrow’s Superyacht Monaco TBC Opportunities in Superyachts Valletta TBC South Coast Powerhouse Summit Southampton TBC Gulf Superyacht Summit Dubai TBC Antigua Charter Yacht Show English Harbour TBC Kata Rocks Superyacht Rendezvous Phuket TBC Thailand International Boat Show Phuket TBC Bahamas Charter Yacht Show Nassau TBC Palm Beach International Boat Show West Palm Beach TBC Superyacht UK Technical Seminar London TBC Superyacht Investor London London TBC Superyacht Summit Adria Porto Montenegro TBC

A map of all the world's major yacht and superyacht shows, conferences, races and rendezvous. A comprehensive guide to all the world's leading yacht and superyacht shows, races, conferences and related events. Such events are a must for those looking to buy or charter a yacht, or looking to source services such as yacht builders, naval architects or interior designers. Home Insights Events / / Events Map This page aims to map all yacht-related events which may be of interest to our Members and their representatives. You can also see a list of events, in date order, here . The Club has no commercial relationships with any organisers. Listings are not endorsements. Events can be subject to change or cancellation without notice, and may not take place every year. Please check with the organisers directly before making any arrangements. Map locations are approximate. Have we missed an event? Please tell us .

Unavailable at present Latest Position Yachts & More Listing Email WhatsApp +44 7773 246 246 Central Agent 28 m Length Finest Craft Builder 2006 Build year 150 Gross tonnage Marshall Islands Registry Particulars Prototype

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 37 m Length Finest Craft Builder 2011 Build year 156 Gross tonnage Cayman Islands Registry Particulars Type

The International Management Code for the Safe Operation of Ships and for Pollution Prevention (‘ISM’) Code applies to a significant number of large yachts. Members may think they need have little to do with day-to-day logistics, but they would be well advised to familiarise themselves with the basics of the code. And there’s much to learn for Members owning yachts to which the Code does not apply. Home Handbook Regulation / / The ISM Code 18 May 2009 Last revised minutes 7 Reading time The International Management Code for the Safe Operation of Ships and for Pollution Prevention (‘ISM’) Code applies to a significant number of large yachts. Members may think they need have little to do with day-to-day logistics, but they would be well advised to familiarise themselves with the basics of the code. And there’s much to learn for Members owning yachts to which the Code does not apply. minutes 7 Reading time 18 May 2009 Last revised The International Management Code for the Safe Operation of Ships and for Pollution Prevention (‘ISM’) Code applies to a significant number of large yachts. Members may think they need have little to do with day-to-day logistics, but they would be well advised to familiarise themselves with the basics of the code. And there’s much to learn for Members owning yachts to which the Code does not apply. The Code developed by the International Maritime Organisation is mandatory for certain yachts flying the flag of a maritime nation and affects yachts calling at ports in these countries. The Code applies to yachts of at least 500 gross tonnage engaged in "trade," which includes chartered yachts. The Code requires the implementation of a safety management system (SMS) to ensure safety and pollution prevention. The responsibility for safety lies with the 'Company' that has assumed responsibility for the yacht's operation from the owner. The SMS consists of set procedures outlined in manuals held ashore and onboard the yacht. Non-conformities reported to the Company must be remedied, and the Company must keep itself informed and act if issues arise. Compliance with the Code also requires observance of other international and flag state safety regulations. A designated person ashore (DPA) is appointed to ensure compliance with the SMS and statutory requirements. The Company must obtain a Document of Compliance (DOC) and a Safety Management Certificate (SMC) to operate the yacht legally. The Code helps prevent pollution, but compliance is not guaranteed, and prosecutors and insurers may scrutinize the actual implementation and maintenance of safety systems. Non-conformities reported to the Company must be remedied, and the Company must keep itself informed and act if issues arise. Compliance with the Code also requires observance of other international and flag state safety regulations. A designated person ashore (DPA) is appointed to ensure compliance with the SMS and statutory requirements. The Company must obtain a Document of Compliance (DOC) and a Safety Management Certificate (SMC) to operate the yacht legally. The Code helps prevent pollution, but compliance is not guaranteed, and prosecutors and insurers may scrutinize the actual implementation and maintenance of safety systems. The Code developed by the International Maritime Organisation is mandatory for certain yachts flying the flag of a maritime nation and affects yachts calling at ports in these countries. The Code applies to yachts of at least 500 gross tonnage engaged in "trade," which includes chartered yachts. The Code requires the implementation of a safety management system (SMS) to ensure safety and pollution prevention. The responsibility for safety lies with the 'Company' that has assumed responsibility for the yacht's operation from the owner. The SMS consists of set procedures outlined in manuals held ashore and onboard the yacht. The Code was developed by the International Maritime Organisation and, being uncontroversial, has become a part of domestic law in most maritime nations. The Code is therefore mandatory on board certain yachts flying the ensign of such a country, under what is known as the ‘flag state’ law. It also affects certain yachts calling at ports in some of these countries, by virtue of the ‘port state’ law, even if it is not required by the flag state law. The Code does not apply to all yachts subject to a particular flag state law, however. It only applies to those of at least 500 gross tonnage (GT) which are engaged in ‘trade’. Yachts which are chartered will normally be considered to be engaged in trade. SCOPE The Code concerns a great deal more than just having the right number of fire extinguishers or liferafts. It requires owners (or their appointed managers) to put in place management systems which are designed to ensure that the yacht is operated with the utmost regard to safety and pollution prevention. A complete culture of safety and continual improvement must be created. RESPONSIBILITY Where the yacht is technically owned by a single-purpose offshore owning company, ultimate responsibility for safety can nevertheless still lie with the beneficial owner. Responsibility under the Code, however, is said to lie with the ‘Company’. The Company is the party which has assumed responsibility for the operation of the yacht from the owner: it must establish the appropriate policies, and provide the necessary resources and shore-based support. The Company could be anyone, but someone has to formerly agree to take on this role if the owner is to avoid liability. This is where the managers step in. Under the Code, arranging safety systems becomes a surprisingly specialised task. This is why the managers should be chosen, and engaged, with the utmost care and attention to detail. SYSTEM The Company must implement a safety management system (‘SMS’), consisting of set, verifiable procedures. These are tailored to the individual yacht, and should ensure that the yacht is run in a way which complies with the Code. The SMS is contained in sets of manuals, held both ashore and on board. They typically outline the system itself, state general safety and environmental policies, and describe the organisation of the Company. Shoreside manuals will set out the régime for audits, risk assessment and accident analysis. Shipboard manuals will also give the planning, operating and reporting procedures. They cannot just be left on the shelf like an engine manual, however. Port inspectors, for example, may examine the manuals and interview the crew, who will be expected to be both familiar with them and actually using them. Key operational procedures and corrections are planned and recorded, as well as being audited internally and externally. Taken out of context some procedures may appear almost laughably prescriptive. In fact, in the context of the Code, this process leads both to a continual process of refinement, and independently certifiable standards of conduct. NON-CONFORMITY Where a Code ‘non-conformity’ is reported to the Company but is not remedied, or if a blind eye is turned to it, or if the system is such that non-conformities go reported, the Company will be in breach of the Code. Before the Code was introduced, the owner or manager could have legitimately said that there may have been safety issues on board the yacht which they were not aware about. By contrast, the burden is now on the Company to keep itself informed and act if all is not in order. All roles are now more accurately defined, meaning that it is now much easier to assess after an incident who was responsible for what, and what they knew or should have known. FURTHER COMPLIANCE The Code also requires and ensures observance of other international and flag state safety regulations. The obvious example is the fire drill, which cannot be meaningfully conducted unless all the correct fire fighting equipment is present. In fact, compliance with the Code requires compliance with a considerable array of international maritime conventions, ranging from crew training to vessel stability. From the owner’s point of view, this is a good thing. DESIGNATED PERSON A formal line of communication must exist between the Company and the yacht. This is absolutely vital. The Company has to appoint a designated person ashore (normally abbreviated to ‘DPA’ or ‘DP’) to sit at one and of that line. His (or her) job is to keep an eye on the safe and efficient operation of the yacht as the SMS demands, and take all necessary steps to ensure compliance. The DP must also ensure that proper provision is made for the yacht to be manned, equipped and maintained such that it is fit to operate in accordance with both the SMS and whichever other statutory requirements are dreamt up from time to time. The role of DP is often combined with others such as Technical or Operations Manager. In order that the DP is able to do all this, he must have: Direct access to the highest level of the Company’s management; Sufficient authority to influence decision-making; and Appropriate knowledge and experience of the operation of the type of yacht in question. So important is the DP’s role, that he may be jailed by the flag state should he fail to discharge certain key responsibilities. Port states can also be merciless with a DP, even where the DP is based overseas. A DP based in Denmark, for example, was recently the subject to an indictment by the United States Department of Justice. As the DP can be called upon to take action at any time, a deputy may be appointed. Some managers have been known to appoint personal assistants or secretaries to this role. This is poor practice, and indicates a culture of profit over safety. Beyond the DP and his deputy, the Code states that the Company must ensure that all personnel involved with the SMS have an adequate understanding of the relevant rules, regulations, codes and guidelines. Safety used to be the Captain’s domain, or at least the buck stopped with him or her. In terms of the immediate safety of the yacht, this remains the case. As the Company bears the responsibility of Code compliance on behalf of the owner, the existence of the DP ensures that the Company cannot leave responsibility resting on the Captain’s shoulders. Captains and managers must work together to ensure an adequate and workable system is developed. This is enshrined in the preamble to the Code, which explicitly states that in matters of safety and pollution prevention it is the commitment, competence, attitudes and motivation of individuals at all levels that determines the end result. LIABILITY Before the Code was imposed, yacht managers tended to take on the role of owner’s agent. They might have assisted the owner’s accountants, but it was the Captain who had the most to do the owner. The arrangement was based on reducing hassle for owners as much as possible. This arrangement may still, of course, suit owners of yachts not subject to the Code. As managers must take up a more interfering and directing role by virtue of the Code, there is no scope for resentment of this on the part of the crew. Instead, comfort should be taken in the fact that liability is shared with those ashore, who must keep safety issues under close scrutiny, and make sufficient resources available. Nevertheless, the owner may wish to keep an eye on whether the manager’s style is becoming too autocratic, perhaps leading to a dissatisfied crew. CERTIFICATION Once auditors from the flag state have examined the SMS, both on paper and in practice, a Document of Compliance (‘DOC’) will be issued in respect of the Company. A Safety Management Certificate (‘SMC’) may then be issued in respect of the yacht managed by that Company, as long as the SMS has been successfully implemented on board. Both these documents must be in place for the yacht to be operated legally. They will be audited regularly. Because of the number of individuals involved in the planning, undertaking and recording of actions, and the independence of external auditors, deliberate falsifications are sure to highlight themselves. Where logs have been ‘flogged’, i.e. where false entries have been made with regard to, for example, hours worked, the DOC may be withdrawn immediately. APPEARANCES In comparison with trading ships, yachts may appear to have an unblemished safety record. This is a little illusory. Whilst crewmembers may exude joyful efficiency, and the yachts themselves are kept in immaculate condition, this can have more to do with complying with the owner’s aesthetic wishes than with the maintenance of a safety culture. Accidents involving yachts do happen: they tend, however, not to involve large scale loss of life or pollution, and are not especially newsworthy. That courteous crewmember may in fact have worked excessive hours during a busy charter season, or may have been left in command without the necessary experience or qualifications. INSURANCE Following an incident, insurers will consider their liability for the claim thoroughly. Standard insurance clauses typically allow an insurer to avoid paying out, if the yacht was subject to certain perils resulting from a lack of ‘due diligence’ by the yacht’s management. The actions of the Company will be open to scrutiny by the insurer seeking to establish whether due diligence was exercised, and will be subject to a post-incident analysis. The ISM Code paper-trail is the obvious starting point. All documents in the possession of the Company which may be useful to the insurer, including internal documents, may have to be made available in the event of litigation. Any conviction of the Company or DP for Code failings would provide the insurer with the best possible evidence of a failure to exercise due diligence. INSPECTIONS Inspections of yachts by port officials tend to occur less frequently than for trading ships. This is understandable given that yachts tend to wear more respectable ensigns, and it is normally the official policy at ports to concentrate inspections on vessels which are likely to pose the greatest hazard to that port and the surrounding coastline. Nevertheless, where safety failings lead to even trivial incidents, authorities may choose to detain or even take action against a yacht herself, making the use of standard liability-avoidance vehicles, such as companies and trusts, futile measures. The knock-on effects of breached charter agreements and all-round inconvenience are obviously best avoided. The fact that the Code also helps to prevent pollution is a very good thing as far as owners are concerned. Pollution in some jurisdictions can lead to surprisingly hefty fines and even imprisonment. Spotter planes can find offending yachts with ease, and it is surprising how far even the smallest quantity of fuel will spread across the water. Unfortunately, the Company cannot simply wave the DOC and SMC in the air and expect forgiveness from prosecutors or insurers. Whilst useful, neither guarantees compliance. They simply show that, at a particular point in time in the past, the SMS, as applied by the Company and on board the yacht, met the minimum internationally agreed standards. Further, the external audit which led to the award of the DOC and SMC will have been based only on samples, will not have taken that long, and will have been far from exhaustive. By contrast, once a prosecutor or insurance company is able to access the various manuals and records, these can be scrutinised against actual findings at their leisure. It has been recognised that less respectable flag states may chose to ignore their responsibilities and may be prepared to certify compliance in any event. CONCLUSION From a legal viewpoint, the Code can be the owner’s closest ally or most feared enemy, depending on just how successful its implementation and maintenance has actually been. Owners do least have the luxury of being able to buy-in the appropriate expertise. Arranging and maintaining Code safety systems is a highly specialised task, however, and owners should grasp the fundamentals of the Code, and choose the appropriate managers accordingly. Thereafter, they should consider whether the managers and crew are successfully working together: this required by the Code and is important for morale and staff retention. Although the implementation of the Code does involve more paperwork and expense, it is the consequence of concerns about ineffective safety management stretching back many decades. Full and successful implementation will go a long way to ensuring that physical safety and pollution risks are kept under control. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Port State Control Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Port State Control

Obtaining a reference for a candidate makes a lot of sense, especially in the yachting sector where standards of service are so subjective. There is a common misunderstanding among shoreside employers that they are only allowed to confirm dates of employment and role(s). This is incorrect. You may be obliged to provide one, and refences for captains and crew are commonly sought and given in any event. But care must be taken when providing them. Home Handbook Employing / / Oh Referee! 1 March 2024 Last revised minutes 7 Reading time Obtaining a reference for a candidate makes a lot of sense, especially in the yachting sector where standards of service are so subjective. There is a common misunderstanding among shoreside employers that they are only allowed to confirm dates of employment and role(s). This is incorrect. You may be obliged to provide one, and refences for captains and crew are commonly sought and given in any event. But care must be taken when providing them. minutes 7 Reading time 1 March 2024 Last revised Obtaining a reference for a candidate makes a lot of sense, especially in the yachting sector where standards of service are so subjective. There is a common misunderstanding among shoreside employers that they are only allowed to confirm dates of employment and role(s). This is incorrect. You may be obliged to provide one, and refences for captains and crew are commonly sought and given in any event. But care must be taken when providing them. Employers commonly make job offers contingent upon satisfactory references, which should be explicitly stated in the offer letter. Employers may be obligated to provide subjective references if it's customary in their industry or contractually specified. Not providing references could lead to claims of discrimination or breach of trust. References can come from individuals or corporate entities and can be either written or oral. Using third-party services like Superyacht References is recommended. Employers should ensure accuracy, fairness, and compliance with data protection laws when providing references. Policies should be established and adhered to. References should include employment duration, roles, and may cover performance, disciplinary history, and reasons for departure. Comments on suitability must be based on first-hand experience only. Employers have a duty to provide accurate and impartial references. Negligent misstatement and defamation risks exist, so references should be substantiated and labelled as private and confidential. Providing references involves handling personal data, necessitating compliance with data protection regulations. Guidance on this should be sought. Employers should disclose poor disciplinary records and ongoing proceedings in references to avoid liability for providing misleading information. Employers often include disclaimers of liability in references, though they don't absolve liability for fraud or deceit by the provider. Employers should establish clear policies on who can provide references, permissible content, and record-keeping requirements. Having template references attached to policies is recommended. Employers have a duty to provide accurate and impartial references. Negligent misstatement and defamation risks exist, so references should be substantiated and labelled as private and confidential. Providing references involves handling personal data, necessitating compliance with data protection regulations. Guidance on this should be sought. Employers should disclose poor disciplinary records and ongoing proceedings in references to avoid liability for providing misleading information. Employers often include disclaimers of liability in references, though they don't absolve liability for fraud or deceit by the provider. Employers should establish clear policies on who can provide references, permissible content, and record-keeping requirements. Having template references attached to policies is recommended. Employers commonly make job offers contingent upon satisfactory references, which should be explicitly stated in the offer letter. Employers may be obligated to provide subjective references if it's customary in their industry or contractually specified. Not providing references could lead to claims of discrimination or breach of trust. References can come from individuals or corporate entities and can be either written or oral. Using third-party services like Superyacht References is recommended. Employers should ensure accuracy, fairness, and compliance with data protection laws when providing references. Policies should be established and adhered to. References should include employment duration, roles, and may cover performance, disciplinary history, and reasons for departure. Comments on suitability must be based on first-hand experience only. It makes sense to make any offer of employment conditional upon obtaining satisfactory references. For the avoidance of doubt, this should be phrased in the job offer letter as being acceptable to the employer and not just satisfactory in a general sense. References can be given either personally or on behalf of the employer, and may be written or oral. But take care. It has been known, for example, for candidates just to give the telephone number of a friend who poses as the captain of a current or previous yacht, so it’s wise to engage an independent third party such as Superyacht References . MUST YOU PROVIDE A REFERENCE? As a present or former employer, you can be obliged to provide a subjective reference (beyond confirming dates of employment and role(s)) if there is an express obligation to do so in the employment contract, or because it’s customary in a particular industry – and is, therefore, an implied contractual term. It is, of course, very much the custom for yacht captains and departmental heads to provide references. Indeed, it’s poor form in yachting not to do so, and a refusal can be bad for a captain and/or boat’s reputation. If it’s going to be your policy, as employer, not to provide subjective references, then you should make this your formal policy, and stick to it, to avoid potential claims of discrimination or breach of the implied trust and confidence. In particular, if an employee (or former employee) has previously initiated discrimination proceedings against the employer, or alleges unlawful discrimination, a refusal to furnish a reference could lead to an additional claim of victimisation. 10 PRACTICAL TIPS ON GIVING A REFERENCE When furnishing a reference, you, as an employer, should ensure that: No statements are inaccurate The reference offers a fair overview but does not need to include every detail The reference does not convey a misleading impression The reference does not unfairly portray the subject in a negative light The subject is informed of any complaints or performance issues referred to Information regarding absence adheres to the employer's data protection obligations Comments on performance or absence abide by disability discrimination law The reference is marked as being private and confidential and for the addressee only Your policies on the subject are adhered to If providing just dates and job roles, your policy of only providing this should be referred to REFERENCE CONTENTS A reference should always set out the duration of employment and specific role(s) undertaken. The reference may also encompass other matters, such as performance, disciplinary history, perceptions of attitude and integrity, punctuality and the reason for departure. Any comments on suitability for a new role must always be – expressly – restricted to first-hand experience only. If the employee was dismissed, then this should be outlined accurately, as a favourable reference may weaken an employer's defence against an unfair dismissal claim. Maintaining consistency in providing references to different employees is vital to mitigate any allegations of discrimination or victimisation. GENERAL DUTIES When providing a reference, you (in reality, of course, your captain or head of department) must exercise reasonable care to ensure that the information provided is accurate and impartial, and does not create a false impression. There is no requirement for references to contain extensive details or be exhaustive in scope. Particular care must be taken when remarking on performance or sickness, as these could lead to a claim for disability discrimination. Employers bear legal responsibility for the content of corporate references since they are provided on the employer's behalf. So it's advisable to establish a [policy] outlining who can provide references, and the permissible content. The legal implications remain the same whether the reference is given verbally or in writing. NEGLIGENT MISSTATEMENT A referee can face legal action for negligent misstatement if it provides an inaccurate reference. Essentially, employers providing references must exercise reasonable care in their preparation. Failure to do so could render the employer liable if the employee suffers harm due to the reference. In particular, opinions expressed in the reference must be supported by the facts. DEFAMATION A false statement that damages a person's reputation in the eyes of reasonable members of society could constitute defamation – either in the form of a libel (if written) or slander (if oral). As long as the employer believed the reference to be accurate, and provided without malice, the claim for defamation won’t get far. Referees should therefore substantiate their comments where possible, demonstrating their truthfulness or honest belief in their accuracy. Further protection can be provided by labelling references " Private and Confidential " and " for the addressee only ". MALICIOUS FALSEHOOD An employee could also pursue a claim for malicious falsehood against a referee if he or she can demonstrate that the reference includes false statements published with malice (meaning the maker knew the statements were false or showed reckless disregard for their truth). While defamation safeguards reputation, malicious falsehood safeguards economic interests. LIABILITY TO THE RECIPIENT It’s easy to provide a polite, even glowing reference – especially in respect of a colleague and friend with whom the provider has spent many months together in the confines of a yacht. But risks can arise from an employer, especially through the agency of a captain or departmental head, providing an excessively positive reference. Previous employers automatically owe a duty of care to the recipient of the reference, to make sure that it is accurate. A well-worded disclaimer should be added just in case of any inaccuracies. DATA PROTECTION Providing a reference typically means handling personal data, and those involved must abide by the UK GDPR and the Data Protection Act 2018. Guidance for employers is provided in the (outdated, but still useful) Information Commissioner's Office (ICO) Employment Practices Code . Helpfully, Part two of the Code provides recommendations for employers issuing references, including establishing and communicating a clear policy regarding who can provide corporate references and under what circumstances. The Code advises against providing confidential references about an employee unless their explicit consent is obtained. It is vital to maintain the security of references and securely dispose of them when an employee leaves the organization, unless retention is required by law. DISCIPLINARY MATTERS It’s always going to be a contentious area, but it’s clear from cases on the point that have reached court that employers should disclose a poor disciplinary record, and details of any ongoing disciplinary proceedings, or risk being liable for providing a misleading reference. Unresolved disciplinary issues should also be mentioned, as not to do so could mean providing an incomplete picture. Adding a disclaimer is advisable. DISCLAIMERS It's customary for employers to add a disclaimer of liability – often specifically in respect of any negligent misstatement. This is usually effective as far as liability to the recipient is concerned, and is well worth adding, but it must such a disclaimer wouldn't absolve liability for fraud or deceit, meaning the employer cannot knowingly or recklessly make false statements. POLICIES Finally, employers ought to establish a well-defined written reference policy, outlining Which individuals are authorised to provide references; How references may be provided (in particular whether oral references may be given); The permissible content; and Any prohibited content. Having a template reference annexed to the policy is a useful further measure, and there should also be an obligation for records to be kept of oral references provided. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Commission or Kickback? Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Commission or Kickback?

Unavailable at present Latest Position New Horizons Listing Email WhatsApp +44 7773 246 246 Central Agent 30 m Length Builder & Co Builder 2004 Build year 70 Gross tonnage Cayman Islands Registry Particulars Snapshot

Buying yacht insurance is an annual chore which you, as owner, no doubt leave to your manager or captain. Some larger managers have in-house insurance specialists, but it’s fair to say that it’s often an area that is little understood. Here, we look at the various parties involved and their respective roles. Home Handbook Insuring / / Who's Who 3 January 2023 Last revised minutes 5 Reading time Buying insurance is an annual chore which you, as owner, no doubt leave to your yacht manager or captain. Some larger managers have in-house insurance specialists, but it’s fair to say that it’s often an area that is little understood. Here, we look at the various parties involved and their respective roles. minutes 5 Reading time 3 January 2023 Last revised Buying insurance is an annual chore which you, as owner, no doubt leave to your yacht manager or captain. Some larger managers have in-house insurance specialists, but it’s fair to say that it’s often an area that is little understood. Here, we look at the various parties involved and their respective roles. Large yacht insurance is provided by underwriters: other parties are merely part of the distribution channel. Insurance brokers should act on behalf of the insured - not underwriters - but are paid commission by underwriters. Some intermediaries may mislead clients into believing they are brokers when they are actually agents of underwriters. Other intermediaries may act as brokers during policy inception but switch to being underwriters' claims handlers during claims, leaving owners without the guidance they had expected to receive. Repackaging existing P&I cover to appear as an add-on can mislead clients and inflate costs. Underwriters prioritize profitability and may challenge large claims, causing significant delays and losses to the insured. It is crucial to verify the location and regulation of underwriters to avoid being left without coverage if they become insolvent. Insurance brokers are tightly regulated to prevent conflicts of interest, ensuring they act in the client's best interests. Brokers have a duty to exercise reasonable skill and care, identify the needed insurance, disclose material facts, and obtain suitable cover underwritten by a reputable underwriter. Acting as an unregulated insurance intermediary in the UK is a serious criminal offence; you should check that they're registered with the FCA . Underwriters prioritize profitability and may challenge large claims, causing significant delays and losses to the insured. It is crucial to verify the location and regulation of underwriters to avoid being left without coverage if they become insolvent. Insurance brokers are tightly regulated to prevent conflicts of interest, ensuring they act in the client's best interests. Brokers have a duty to exercise reasonable skill and care, identify the needed insurance, disclose material facts, and obtain suitable cover underwritten by a reputable underwriter. Acting as an unregulated insurance intermediary in the UK is a serious criminal offence; you should check that they're registered with the FCA . Large yacht insurance is provided by underwriters: other parties are merely part of the distribution channel. Insurance brokers should act on behalf of the insured - not underwriters - but are paid commission by underwriters. Some intermediaries may mislead clients into believing they are brokers when they are actually agents of underwriters. Other intermediaries may act as brokers during policy inception but switch to being underwriters' claims handlers during claims, leaving owners without the guidance they had expected to receive. Repackaging existing P&I cover to appear as an add-on can mislead clients and inflate costs. Look for large yacht insurance, and you’ll find all kinds of parties offering it. In fact, it’s only underwriters who provide cover. Everyone else is part of the distribution channel. The term ‘underwriter’ stems from the days when well-heeled individuals, happy to leverage their wealth as collateral, would sign underneath a description of the risk being insured. With some exceptions, you can’t buy cover from underwriters. They use agents to reach the market. Insurance brokers, by contrast, provide a service to those looking for insurance. Brokers act (or should be – they don’t always) in the insured’s interests, even though they are paid commission from underwriters. MARKET PRACTICES One particularly obnoxious practice is to infer that cover is being bought from a broker, whereas, in fact, that party – standing behind a well-marketed brand – is an underwriter’s agent. Another business model to be wary of is that the turncoat, where the intermediary acts as broker at the time of policy inception, but then acts as the underwriter’s claims handler when there’s a claim. The (legal) basis for this is often buried in the small print, but it’s of little help for the owner who, when needing to claim, is left without the guidance which might have been expected. Another unhelpful practice is to divide up and repackage cover so as to appear to add value. For example, third party liability insurance typically covers injury claims from guests – but this doesn’t prevent some from selling guest welfare insurance separately as an add-on. Relative to Hull & Machinery, P&I cover is relatively inexpensive and normally already provides owners with mandatory international cover. And – make no mistake – underwriters are there to turn a profit. They can, and will, challenge large claims, to a final and unappealable conclusion if necessary, in a legal process that can take years, with the insured incurring unrecoverable losses no matter the outcome. One trick is to pay smaller claims quickly and make a song-and-dance of doing so in their marketing materials, public relations and social media, giving the impression that all claims are handled in this way. THE UNDERWRITER Check carefully where the underwriter is based, and who’s regulating them. Should an underwriter become insolvent following a large claim, the owner would almost certainly be left high and dry. For this reason, underwriters based in the United Kingdom and European Union must maintain ‘solvency margins’, to ensure that their assets will cover their potential liabilities. Reinsurance provides further protection. Further afield, however, policyholders should consider just how much of a hit their underwriter could take. Given the expense of holding reserves, and with reinsurance typically accounting for a fair percentage of the premium, some underwriters could be tempted to cut corners. THE BROKER Given that they are paid on a commission basis, inherent potential conflicts of interest are tightly regulated in the UK by the Financial Conduct Authority (FCA). In particular, brokers must act honestly, fairly and in their clients' best interests – and communicate clearly, especially regarding fees and commission. Advice provided must be appropriate for the client and only suitable insurance, and level of cover, must be proposed. GENERAL DUTIES As well as regulatory duties, the law more generally requires brokers to exercise reasonable skill and care (with reference to what one would ordinarily expect from a member of that profession operating within the same market) – plus, there may be a specific contractual duty to source insurance of particular type or standard. OBTAINING COVER Brokers who hold themselves out as dealing or specialising in yacht insurance will owe the insured a duty of care to identify what insurance is needed. While not lawyers, they are expected to have a working knowledge of insurance law, be able to ask their client the right questions, and understand how any exclusion clauses may affect cover. They are under a duty of care to warn the insured of the duty to make a fair presentation to the underwriter, and the separate requirement to disclose material facts. Brokers should also indicate what sort of matters could be considered to be material and ask questions about facts that they know are material but the insured might not think to mention. They must also, when it comes to renewal, go through the same procedure that was carried out at the inception of the policy: they cannot just renew the policy and pick up their commission. While brokers must do everything reasonably possible in order to obtain or renew cover, there is no absolute obligation to do so. Brokers must act with reasonable speed, and obtain multiple quotes, if possible, to make certain that the insured pays no more than necessary. The cover which is obtained must be clear, suitable and meet the insured’s requirements – and has been underwritten by a suitable underwriter(s). ADVISING ON TERMS Crucially for owners of large, permanently-crewed yachts, which are subject to a myriad of regulations, brokers must draw their clients’ attention to any onerous or unusual terms or conditions, so that owners have the opportunity to ensure that they are able to comply with such requirements or, if possible, obtain alternative cover. CLAIMS HANDLING Generally, unless agreed otherwise, brokers must assist clients with making claims. As ever, the broker must act with due skill, care and diligence. Notably (these are issues commonly leading to disputes) the broker must ensure that time limits and notification requirements are complied with. Time limits can be very tight. Policies can also require, for example, a sworn proof of loss to be provided. A whole strategy must be in place for handling claims. OTHER INTERMEDIARIES Do not assume that non-specialist intermediaries such as yacht managers will add value. Some may simply extend chains of communication, increasing the risk of non-payment for non-disclosure of a material fact, while paying the manager’s commission will only increase premiums. Acting as an unregulated intermediary in the UK is a serious criminal offence, carrying a maximum two-year prison term and an unlimited fine for the individuals involved. You can quickly check whether anyone doing so is regulated by looking them up on the FCA's Financial Services Register . BE WARNED Always look beyond the slick websites, social media advertising and event sponsorships, and be clear about the role played about the party(ies) you’re dealing with. Seek written confirmation if you’re in any doubt. Also pay attention to where they’re located, who’s regulating them, and the law and jurisdiction applicable to the policy. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Types of Insurance Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Types of Insurance

Some liabilities, such as those arising from collisions or the injury of a guest or crew member, are obvious. Other liabilities are less obvious: a large wash made by excessive speed can damage both fixed and floating objects some distance away. Occasionally, it may be possible to limit liability just by spelling this out in a well-drafted charter agreement or employment contract. Often, however, there will be no such contractual relationship with an aggrieved party. Home Handbook Managing / / Limiting Liability 26 February 2011 Last revised minutes 5 Reading time Some liabilities, such as those arising from collisions or the injury of a guest or crew member, are obvious. Other liabilities are less obvious: a large wash made by excessive speed can damage both fixed and floating objects some distance away. Occasionally, it may be possible to limit liability just by spelling this out in a well-drafted charter agreement or employment contract. Often, however, there will be no such contractual relationship with an aggrieved party. minutes 5 Reading time 26 February 2011 Last revised Some liabilities, such as those arising from collisions or the injury of a guest or crew member, are obvious. Other liabilities are less obvious: a large wash made by excessive speed can damage both fixed and floating objects some distance away. Occasionally, it may be possible to limit liability just by spelling this out in a well-drafted charter agreement or employment contract. Often, however, there will be no such contractual relationship with an aggrieved party. Yacht owners who are considered the legal owners, rather than just beneficial owners, can be held personally liable for incidents involving their yacht, putting their other assets at risk. Effective insurance, known as Protection & Indemnity (P&I) insurance, is crucial to protect owners against liabilities to third parties. International conventions allow owners to limit their liability, which provides a maximum payout for insurers and encourages trade. The limitation figure for liability does not differentiate between trading ships and yachts, even though yachts are often worth more. International conventions have specific requirements and standards of behavior that must be met to qualify for limitation. The limitation amount is determined based on the tonnage of the yacht in most countries, except for Italy, the United States, and parts of South America. The 1957 and 1976 Limitation Conventions have subtle differences, such as the circumstances under which the right to limit can be lost. Besides the owner, charterers, managers, captains, crew, employees, salvors, and insurers may also have the right to limit liability under the conventions. Owners can set up a fund with a court or competent authority, depositing an amount up to the limitation, to prevent the yacht from being detained in the future and protect other assets. Jurisdictional issues can arise, and different jurisdictions may apply different conventions and rules, making it crucial to seek legal advice promptly and establish jurisdiction in a favorable location with a lower limitation figure. The limitation amount is determined based on the tonnage of the yacht in most countries, except for Italy, the United States, and parts of South America. The 1957 and 1976 Limitation Conventions have subtle differences, such as the circumstances under which the right to limit can be lost. Besides the owner, charterers, managers, captains, crew, employees, salvors, and insurers may also have the right to limit liability under the conventions. Owners can set up a fund with a court or competent authority, depositing an amount up to the limitation, to prevent the yacht from being detained in the future and protect other assets. Jurisdictional issues can arise, and different jurisdictions may apply different conventions and rules, making it crucial to seek legal advice promptly and establish jurisdiction in a favorable location with a lower limitation figure. Yacht owners who are considered the legal owners, rather than just beneficial owners, can be held personally liable for incidents involving their yacht, putting their other assets at risk. Effective insurance, known as Protection & Indemnity (P&I) insurance, is crucial to protect owners against liabilities to third parties. International conventions allow owners to limit their liability, which provides a maximum payout for insurers and encourages trade. The limitation figure for liability does not differentiate between trading ships and yachts, even though yachts are often worth more. International conventions have specific requirements and standards of behavior that must be met to qualify for limitation. Even though yachts tend to be the only asset of an offshore owning company, it is possible, after a serious incident, for the individual ‘beneficial’ owner to be seen as the legal owner. This means that all the beneficial owner’s other assets are at risk. The need for effective insurance against liabilities to third parties, often known as Protection & Indemnity (‘P&I’) insurance, is therefore all the more important. Fortunately, throughout much of the world, the law gives owners the opportunity to restrict their liability. This is for two reasons. Firstly, insurers are more comfortable giving cover if they know what their maximum pay-out could be. Secondly, it is normally government policy to encourage trade. The owners of trading ships are more likely to put to sea if they know what their maximum liability could be. As an English judge recently put it, a ship owner might be prepared to lose his shirt, but not his entire wardrobe. As far as limitation is concerned, the law does not distinguish between trading ships and yachts, and, even though yachts are usually worth much more than similar-sized trading ships, the limitation figure will still be the same. CONVENTIONS But with the appropriate insurance in place, why should the owner need to even think about limitation? The answer is that the international conventions providing the limitation require certain standards of behaviour to be met before granting this invaluable right. That way, it is hoped, the sea is made a safer place for everyone. To understand how the opportunity to limit can slip through the owner’s fingers, it is necessary to look a little more closely at the international rules. It used to be that an owner could give up his ship to a claimant and walk away. As the ship would have been the beneficial owner’s largest asset, this was as much as a claimant could sensibly hope for anyway. This principal survives in Italy, the United States and parts of South America, but in most other countries the tonnage of the yacht will determine the owner’s limit in purely financial terms. A few nations still have no limitation regime whatsoever. EXAMPLE For example, a 35-metre yacht, with a gross tonnage of 120, negligently rams a cargo ship at night. Neither sinks, although the ship requires repairs costing £500,000. A further £500,000 of cargo is damaged, and the time spent carrying out repairs costs the owner another £500,000 in lost business. The yacht owner’s total liability in the UK would be just £650,000 approximately, not £1,500,000. The exact figure is determined using a basket of major currencies, and therefore changes daily. Most countries are party to either the 1957 or 1976 Limitation Conventions. There are subtle but vital differences between the two. The 1957 Convention contains a lower limitation figure, but no limitation is allowed where an incident was the owner’s fault or was the result of something the owner knew about. The 1976 Convention sets a higher figure, but the right to limit will only be lost where the owner did (or failed to do) something with the actual intention of causing loss, or not caring whether or not loss will be caused. Whether or not ‘owner’ here refers to the beneficial owner who chooses to skipper his own yacht, will depend on how transparent the owning company will be to the courts concerned. CHARTERER & MANAGER Aside from the owner, the 1957 Convention allows a charterer or manager, and the captain, crew and any other employees, to limit liability. The 1976 Convention adds salvors and insurers to that list. Broadly, both Conventions limit claims for loss of life or personal injury to any person carried on board, loss of or damage to property, liabilities for dealing with a wrecked or abandoned yacht, and the infringement of any non-contractual rights. The Convention limits do not apply to payments to salvors, or claims by the captain, crew or any of the owner’s employees where the law, or the employment contact itself, does not limit liability. Each Convention has lower limits for property claims than for injury or loss of life. FUND Under the Conventions, where the owner could benefit from limitation, a fund can be set up with a court, or other competent authority. The owner can then make a deposit or present a guarantee of no more than the limitation amount. The setting up of the fund is not a prerequisite to limitation, but will help prevent the yacht being detained in future over the same incident, which would require the security to be provided anyway prior to release, seriously disrupting any charter. The owner’s other assets are also placed out of the reach. This is particularly important where a court considers the owner to mean the beneficial owner. Where the yacht has been detained as security for a claim before a fund is established, it will have to be released. JURISDICTION Of course, any Convention will only be as effective as the law implementing it allows. Details, even the limits themselves and those entitled to them, can vary, as countries embroider the Conventions with their own unique thinking. A claim may be subject to a number of possible jurisdictions, each applying different Conventions in different ways. What’s more, each jurisdiction applies it’s own rules in deciding whether or not their courts can hear a claim, and if so whether their own law should apply. Jurisdiction can be founded by an owner, by bringing a pre-emptive action, in a jurisdiction with a favourably low limitation. Otherwise, there is a risk that an aggrieved party may arrest the yacht in a less favourable jurisdiction, presenting a vague case at that stage, leading to the case being later tried in those courts. Jurisdictional arguments are highly complex and an adventure playground for unscrupulous lawyers looking to rack up large bills! Lawyers have also been known to contrive to keep the business in their own courts, even where this is not in the owner’s best interest. INSURANCE Insurance policies normally state that where the assured would have been entitled to limit liability, but failed, unreasonably, to take the necessary steps to do so, the insurers’ liability will not exceed what would have been the limitation figure. This implies that there is an obligation to ensure, if possible, that the claim is subject to a jurisdiction with a relatively low limitation figure. What’s more, the burden of proving that any failure to limit is not unreasonable often rests with the assured. The assured is also normally under a separate obligation to obtain the necessary legal advice and assistance, as and when required. ADVICE The important point is for owners (or their managers) to seek advice promptly in the event of an incident, in order for the jurisdiction to be established where the limitation is lowest. At the outset, a trusted lawyer in a reputable jurisdiction must be instructed, with the guidance and consent of the insurer, in order to work out a strategy for minimising liability. Other local lawyers in the most favourable jurisdiction can then be appointed. The insurers will have a network of reliable lawyers covering most maritime jurisdictions. Liaising with insurers, from the moment an incident occurs, will bring the insurers’ considerable expertise to bear and prevent the insurer from later claiming that the assured failed to do everything possible to limit liability. As well as being a source of unrivalled pleasure and prestige, yacht ownership also carries with it certain responsibilities. As long as owners appreciate the importance of taking timely advice, from a reputable source, and of liaising closely with their insurers, they can rest assured that they have done everything possible to limit any liability. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Piracy & Protection Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Piracy & Protection

When a deal’s on the table, it can be annoying to be asked not only for endless documents but for documents which must be authenticated in seemingly arcane ways. In the case of Bills of Sale, there’s no often no choice: it’s what many ship registries require for (re)registration. Providing authenticated documents doesn’t have to take too much additional time or resources: it just takes planning and forethought. Home Handbook Selling / / Document Authentication 8 August 2024 Last revised minutes 6 Reading time When a deal’s on the table, it can be annoying to be asked not only for endless documents but for documents which must be authenticated in seemingly arcane ways. In the case of Bills of Sale, there’s no often no choice: it’s what many ship registries require for (re)registration. Providing authenticated documents doesn’t have to take too much additional time or resources: it just takes planning and forethought. minutes 6 Reading time 8 August 2024 Last revised When a deal’s on the table, it can be annoying to be asked not only for endless documents but for documents which must be authenticated in seemingly arcane ways. In the case of Bills of Sale, there’s no often no choice: it’s what many ship registries require for (re)registration. Providing authenticated documents doesn’t have to take too much additional time or resources: it just takes planning and forethought. Ensuring document authenticity is crucial to prevent fraud and confirm the validity and irreversibility of transactions, particularly in high value purchases like yachts. As it's easy to fake documents, multiple methods and cross-checks are necessary to build confidence in their authenticity, though no method is fool-proof. A certified copy is a true copy of an original document, usually certified by a lawyer or company director, but it doesn’t confirm the original document’s genuineness. Notarisation is the verification, certifying, and sealing of documents, which is mandatory in some jurisdictions to make documents valid and enforceable. Legalisation involves government bodies authenticating the signature or seal on a document, especially for international use, often requiring an apostille certificate if both countries are Hague Convention signatories. Certification must be done by authorized individuals like lawyers or company officials, and deliberate false certification can lead to serious legal consequences. The correct wording and format for certification and notarisation must be used, often specified by the third party requiring the document. Notaries follow strict procedures, including checking IDs and corporate documents, and may require translations for documents in foreign languages. Even notarised and legalised documents can be forged, so further verification through online searches and government registers is recommended. Proper planning and adherence to authentication requirements can prevent delays and ensure compliance with legal and registration needs, particularly for documents like Bills of Sale. Certification must be done by authorized individuals like lawyers or company officials, and deliberate false certification can lead to serious legal consequences. The correct wording and format for certification and notarisation must be used, often specified by the third party requiring the document. Notaries follow strict procedures, including checking IDs and corporate documents, and may require translations for documents in foreign languages. Even notarised and legalised documents can be forged, so further verification through online searches and government registers is recommended. Proper planning and adherence to authentication requirements can prevent delays and ensure compliance with legal and registration needs, particularly for documents like Bills of Sale. Ensuring document authenticity is crucial to prevent fraud and confirm the validity and irreversibility of transactions, particularly in high value purchases like yachts. As it's easy to fake documents, multiple methods and cross-checks are necessary to build confidence in their authenticity, though no method is fool-proof. A certified copy is a true copy of an original document, usually certified by a lawyer or company director, but it doesn’t confirm the original document’s genuineness. Notarisation is the verification, certifying, and sealing of documents, which is mandatory in some jurisdictions to make documents valid and enforceable. Legalisation involves government bodies authenticating the signature or seal on a document, especially for international use, often requiring an apostille certificate if both countries are Hague Convention signatories. When yachts are bought, there’s much which needs to be proven by the seller before the buyer feels comfortable handing over a considerable sum. Who is the vessel actually owned by? Has the owner (if a company) formally resolved to sell the vessel – and appointed an individual to represent it at the closing and sign the necessary paperwork? The list goes on. And that list must be included in the sale agreement. To be presented with documents is one thing, but how do buyers know that such documents are what they appear to be? This is especially important when it comes to a selling company’s incorporation and powers: originals of the vessel’s own documentation can be provided, but the selling company will not usually be providing originals of its incorporating documentation. No single method of authentication is foolproof, as the authenticating documents, certificates, seals and signatures can themselves all be forged with ease. It’s about building sufficient confidence, combining different approaches and cross-checking with other sources where possible. It’s always good to avoid unnecessary bureaucracy and expense, but keep in mind that third parties, such as yacht registries, may need documents to be authenticated in a particular way. Whatever methods are chosen, these need to be agreed upon at the outset. Now let’s look at the main methods. CERTIFICATION What is a certified copy? A certified copy is an accurate, complete and current copy (usually a photocopy, scan or photo) of an original document. It’s used when it’s not practical or possible to produce the original document. The certified copy will include a statement that it is a true copy of the original as at the date certified. Crucially, it does not certify that the original document is genuine, only that it is a true copy of the original. Who can certify a document? The certifying person is usually a lawyer or, in the case of a document relating to a company, a director or secretary of that company. If the document is also needed by a third party then it’s worth checking with that third party who can and can’t certify. In the United Kingdom, if an authorised person deliberately falsely certifies a document as being a true copy of the original, they can go to prison for up to 18 months. What’s the correct format? Any third party needing the copy may also specify the wording used. If not, the following wording is usually acceptable: “I [insert full name of the certifying person] certify that this document is a true and complete copy of the original.” In the case of photographic identification, the following could be used: “I [insert full name of the certifying person] certify that this document is a true and complete copy of the original and a true likeness of the individual [insert name].” The certifying person will then need to sign, write his or her full name under the signature, and add their law firm’s name and address. Finally, the date is added. The exact wording and format can vary, but the essential elements must be there. Provided all pages are attached together, then there’s not normally any need to certify each page – with the notable exception of Powers of Attorney, all pages of which must, in the UK, be certified "I certify this is a true and complete copy of the corresponding page of the original". Fees for certification There is no set fee for certification: fees must be fair and reasonable and will reflect time spent. NOTARISATION What is notarisation? The job of a notary (also known as a notary public) is to prepare, attest or certify documents (originals or copies) under an official seal, especially for use in certain jurisdictions. Notaries are usually (but not necessarily) qualified lawyers. Why is notarisation needed? Notarisation may seem unnecessary – given that a far wider range of professionals can just certify copies – but it’s simply part of the legal landscape in some countries. Failing to notarise can render a document invalid or unenforceable. What does notarisation involve? At the outset, notaries must also comply with anti-money laundering (AML) and data protection legislation, so it’s useful to have documents likely to be needed readily available so as to avoid unnecessary delays. Individuals involved will need to provide photographic identification. Where an individual presents corporate documents for notarisation, the company’s constitutional documents must also be presented, along with a Power of Attorney empowering that individual, and the appropriate resolutions. The relevant document is read in full in the notary's presence. If a foreign language document is to be notarised, a translation may be needed. A notary can only authenticate a document drawn up in a foreign language if they are satisfied as to its meaning. Scrivener notaries must be fluent in at least one language other than English. Once satisfied, the notary adds his or her notarial certificate to the document being notarised. The specific form of the certificate will depends on who needs the document to be notarised, and this information needs to be obtained beforehand. The notarial certificate is then signed by the notary and sealed with the notary's official seal. The notary keeps a set of the originals, or copies of all documents that they make, which then serves as a permanent record. These records must be made available to anyone with a right to see them including the notary's client and any other party involved. The final document should not be taken apart (for example, to scan) as notarised documents which have been tampered may not be accepted by the party requiring it. E-notarisation is available in some jurisdictions, which can make the whole proves much quicker. LEGALISATION What is legalisation? Certification and even notarisation isn’t good enough for some recipients. After all, who’s to say that the certifier or notary is duly qualified? And so it is that such document (in practice, normally notarised) may need to be ‘legalised’. This is the process by which one government body authenticates the signature, seal and/or stamp to the satisfaction of another country’s government body. As with the other forms of authentication, a failure to legalise a document may mean that the document is invalid or unenforceable (or both) in the jurisdiction where it is to be relied on. Who can legalise a document? Who needs to legalise the document in one country depends on the whether that county, and the recipient’s country, have both ratified the Hague Convention of 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (commonly known as the Hague Convention). 91 countries are signed-up at present. Where both are Hague Convention countries, then a standardised ‘apostille’ certificate can be obtained, relatively quickly and inexpensively. In the UK, this is done by sending the document to the Legalisation Office of the Foreign, Commonwealth and Development Office (FCDO). The FCDO checks the notary's or certifier’s name and signature against its register. If all’s in order, an apostille is applied to the document and it’s returned. The increasing use of e-apostilles is reducing fees and turnaround time, but it’s worth checking how long it could take in advance and planning accordingly. Where one country isn’t a Hague Convention signatory, then it’ll be up to the recipient’s country’s local embassy or consulate to legalise the document. Under their rules, it may also be necessary to obtain a Hague Convention apostille beforehand. The parties can arrange legalisation themselves. Legalisation can also be arranged by a notary on the parties' behalf. This is often preferable as the notary will be familiar with the process. FURTHER VERIFICATION Certified copies, notarial certificates and apostilles can all be, and occasionally are, forged. At least apostilles issued by the FCDO, for example, can be checked online on a special UK government website, if the apostille date and number are available. More broadly, it makes sense to conduct broad online searches into individuals and companies. Increasingly, company documents can be viewed on, or downloaded directly from, online government company registers and/or third party corporate information providers. The UK has long-since provided a wealth of company information. Now many classic offshore jurisdictions also provide extensive information which can be used to cross-check directorships and constitutional documents. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Preparing Your Crew Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Preparing Your Crew

While the lender retains so much security, it also retains liability as registered owner, so it’s perhaps not surprising that pure leasing isn’t more popular. It does form the basis of various VAT-reduction and deferment schemes. Home Handbook Financing / / Leasing Overview 22 October 2020 Last revised minutes 2 Reading time While the lender retains so much security, it also retains liability as registered owner, so it’s perhaps not surprising that pure leasing isn’t more popular. It does form the basis of various VAT-reduction and deferment schemes. Such schemes come and go, and are not covered here. Feel to contact us regarding tax avoidance. minutes 2 Reading time 22 October 2020 Last revised While the lender retains so much security, it also retains liability as registered owner, so it’s perhaps not surprising that pure leasing isn’t more popular. It does form the basis of various VAT-reduction and deferment schemes. Such schemes come and go, and are not covered here. Feel to contact us regarding tax avoidance. The arrangement involves a bank or leasing company (lessor) buying a yacht and becoming its legal owner. The lessor then bareboat charters the yacht to the lessee (owner) for an agreed period of time. The lessee pays instalments equivalent to the full value of the yacht plus a return on capital instead of interest on a loan. The lessee is considered the regulatory owner of the yacht. The lessee has exclusive possession and control of the yacht and must keep it in good working order. Insurance against loss or damage is the lessee's responsibility. The lessee is entitled to the warranties provided by the yard. The lessor is indemnified against liabilities related to being the registered owner. The lessee cannot sell the yacht as they do not own it. To terminate the lease, the lessee must pay the remaining instalments or a cancellation fee. The lessee has exclusive possession and control of the yacht and must keep it in good working order. Insurance against loss or damage is the lessee's responsibility. The lessee is entitled to the warranties provided by the yard. The lessor is indemnified against liabilities related to being the registered owner. The lessee cannot sell the yacht as they do not own it. To terminate the lease, the lessee must pay the remaining instalments or a cancellation fee. The arrangement involves a bank or leasing company (lessor) buying a yacht and becoming its legal owner. The lessor then bareboat charters the yacht to the lessee (owner) for an agreed period of time. The lessee pays instalments equivalent to the full value of the yacht plus a return on capital instead of interest on a loan. The lessee is considered the regulatory owner of the yacht. The bank or leasing company (known as the ‘lessor’) buys the yacht and is the legal, registered owner. Then the lessor, in effect, bareboat charters (so, without crew) it to the ‘owner’ (known as the ‘lessee’), over an agreed period of time. The lessee pays instalments equivalent to the full value of the asset over the term of the lease plus a return on capital to the lender, instead of interest on a loan. At the end of the lease, after the final payment has been made, the asset may be transferred to the lessee. FEATURES Typically, the lessee: Is the ‘owner’ of the yacht for regulatory purposes; Has exclusive possession and control of the yacht; Will be obliged to keep the yacht in good working order; Must insure the yacht against loss or damage; Will be entitled to the yard’s warranties; Must indemnify the lessor against liabilities stemming from the lessor being the registered owner; Cannot sell the yacht as it does not own it; and Must pay the remaining instalments, or a cancellation fee, to terminate the lease agreement. OTHER FORMS The Statement of Standard Accounting Practice SSAP 21 (Accounting for leases and hire purchase contracts) defines a finance lease as a lease which transfers ‘substantially all of the risks and rewards of ownership of the asset to the lessee’. The distinction is drawn with operating leases, common for aircraft, plant and equipment, where the risk in relation to the asset falls on the lessor rather than the lessee. An operating lease will be treated as being off balance sheet in the lessee’s accounts, and at the expiry of the lease term, the lessee is obliged to return the asset to the lessor and the asset’s residual value is of no concern to the lessee. Only relevant to smaller yachts and tenders, SSAP 21 also distinguishes a hire purchase contract, which allows the hirer to acquire legal title by exercising an option to purchase the asset – normally having paid an agreed number of instalments. SSAP 21 prescribes the accounting treatments, but note that accounting standards are being developed which will supersede SSAP 21. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Loans Overview Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Loans Overview

Unavailable at present Latest Position Superyachts'R'Us Listing Email WhatsApp +44 7773 246 246 Central Agent 88 m Length Thompson Yachts Builder 2010 Build year 1502 Gross tonnage Malta Registry Particulars Representation

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 39 m Length Builder & Co Builder 1921 Build year 210 Gross tonnage British Virgin Islands Registry Particulars Template

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 33 m Length Finest Craft Builder 1937 Build year 116 Gross tonnage United Kingdom Registry Particulars Paragon

Most yacht builders have their own ‘just sign here’ standard build terms. They vary enormously in length and complexity. Such agreements often miss out important aspects and can be subject to local law and jurisdiction - whose courts may not be impartial and where you may struggle to find competent, specialist lawyers. Don’t sign them. Contact us for guidance. Given the amount of money at stake, such contracts should only be viewed as an opening to contractual negotiations. Home Handbook Building / / The Build Agreement 10 May 2023 Last revised minutes 10 Reading time Most builders have their own ‘just sign here’ standard build terms. They vary enormously in length and complexity. Such agreements often miss out important aspects and can be subject to local law and jurisdiction - whose courts may not be impartial and where you may struggle to find competent, specialist lawyers. Don’t sign them. Contact us for guidance. Given the amount of money at stake, such contracts should only be viewed as an opening to contractual negotiations. minutes 10 Reading time 10 May 2023 Last revised Most builders have their own ‘just sign here’ standard build terms. They vary enormously in length and complexity. Such agreements often miss out important aspects and can be subject to local law and jurisdiction - whose courts may not be impartial and where you may struggle to find competent, specialist lawyers. Don’t sign them. Contact us for guidance. Given the amount of money at stake, such contracts should only be viewed as an opening to contractual negotiations. Privacy concerns and the need for NDAs should be addressed early on with the engagement of an experienced lawyer. Payments should be made upon completion of build milestones, with independent surveyor signoff, and account for material costs, transport, and exchange rates. Security measures should be in place to protect against builder insolvency, including ownership transfer and guarantees from the builder's bank. Consider local legal requirements for ownership transfer and potential statutory liens by unpaid subcontractors. Clearly define the triggering events and duration of guarantees to ensure protection in case of builder insolvency or yacht issues. Establish clear and rigid procedures for change orders to avoid cost overruns and delays. Subcontractors should be carefully vetted, and the builder should remain liable for their mistakes. Materials should not be subject to title retention. Specify insurance requirements for the part-built project and ensure the wording is adequate and obtained from reputable insurers. Address force majeure events, their effect on the delivery date, and the need for a cap. Clarify buyer-ordered modifications' impact on delays. Ensure all correct legal documents for the yacht's registration are presented before final payment and agree on the place of legal delivery. Allow access for tests, inspections, and reasonable rectification of faults before delivery. Define criteria for acceptance or rejection of the yacht. Formal testing at sea is necessary to verify performance against specifications, and a margin of tolerance with incremental compensation may be agreed upon. Establish the buyer's right to refuse delivery if faults are not rectified, and differentiate between minor non-conformities and deliverable condition requirements. Warranty period should be agreed upon for materials and workmanship, and provisions for rectifying defects and compensation should be addressed. Dispute resolution mechanisms should include independent technical experts for technical matters and arbitration or litigation for non-technical or high-value disputes. Consider enforceability and confidentiality aspects when choosing between arbitration and litigation. Ensure all correct legal documents for the yacht's registration are presented before final payment and agree on the place of legal delivery. Allow access for tests, inspections, and reasonable rectification of faults before delivery. Define criteria for acceptance or rejection of the yacht. Formal testing at sea is necessary to verify performance against specifications, and a margin of tolerance with incremental compensation may be agreed upon. Establish the buyer's right to refuse delivery if faults are not rectified, and differentiate between minor non-conformities and deliverable condition requirements. Warranty period should be agreed upon for materials and workmanship, and provisions for rectifying defects and compensation should be addressed. Dispute resolution mechanisms should include independent technical experts for technical matters and arbitration or litigation for non-technical or high-value disputes. Consider enforceability and confidentiality aspects when choosing between arbitration and litigation. Privacy concerns and the need for NDAs should be addressed early on with the engagement of an experienced lawyer. Payments should be made upon completion of build milestones, with independent surveyor signoff, and account for material costs, transport, and exchange rates. Security measures should be in place to protect against builder insolvency, including ownership transfer and guarantees from the builder's bank. Consider local legal requirements for ownership transfer and potential statutory liens by unpaid subcontractors. Clearly define the triggering events and duration of guarantees to ensure protection in case of builder insolvency or yacht issues. Establish clear and rigid procedures for change orders to avoid cost overruns and delays. Subcontractors should be carefully vetted, and the builder should remain liable for their mistakes. Materials should not be subject to title retention. Specify insurance requirements for the part-built project and ensure the wording is adequate and obtained from reputable insurers. Address force majeure events, their effect on the delivery date, and the need for a cap. Clarify buyer-ordered modifications' impact on delays. An immediate concern usually not covered is privacy, which may, of course, be one of the reasons you’re looking to have a yacht built in the first place. An experienced lawyer must be engaged at the outset – not brought in at the last minute to cast an eye over what everyone else considers to be a done deal. And his or her priority will be to get NDAs in place with the builder. SPECIFICATION & COST There’s no point finding designers who pen the perfect yacht, which the builder then interprets in its own (possibly cost-cutting) way. Moreover, modifying a yacht retrospectively can be particularly time-consuming and expensive. An incorrectly interpreted specification might prevent a yacht being chartered out . So the design and specification, in compliance with specific Flag State regulations and classification society Rules (if applicable) must be set out in exquisite detail, and agreed – in principle – with the builder, along with the build cost. With this settled, attention can be turned to the principal elements of the build agreement. PAYMENTS It’s customary for payments to be made upon the completion of certain build milestones. This way, your exposure is minimised while the builder has sufficient cashflow. Whether or not a stage has been satisfactorily completed is a technical question, needing signoff from an independent surveyor instructed by you – not the builder. The first payment is made by way of a deposit before construction starts. With large projects taking years to complete, account should be made for fluctuations in materials costs and transport, and exchange rates. Placing the builder under real financial strain will be to no one’s advantage. SECURITY Consideration must be given to the consequence of the builder folding mid-build. It happens. Without agreement otherwise, the builder would be left with both instalments and an incomplete yacht as assets, with you standing at the end of a long line of creditors. So your security takes two forms. Firstly, ownership of the yacht is transferred to the buyer as it is built. Secondly, the builder supplies the buyer with guarantees, issued by the builder’s bank, for the refund of pre-delivery instalments, against which the buyer pays each such instalment. Such guarantee can also take the form of an insurance-backed Advance Payment Bond (remembering that banks can, on occasion, themselves go bust). Keep in mind that any transfer of ownership may be subject to formalities under local law – regardless of the build agreement’s law and jurisdiction – so it’s important to take local legal advice. If the worst does happen, in spite of all the financial due diligence you undertook, then you will still need to have the project moved elsewhere for completion, so check that, under local law, unpaid subcontractors aren’t automatically entitled to a statutory lien over the yacht and materials, which may prevent removal. It is vital to state in the contract that only ownership, and not risk (which may otherwise also automatically be transferred at the same time), is being transferred. If the yacht is being financed, it may also be possible to register a mortgage over the incomplete project in favour of the lender. As to the specific small print of the guarantee, the most important element is what triggers the ability of the buyer to make a demand for payment under it. The most favourable option is for the buyer to have the ability to make a demand by stating that there has been a default on the part of the builder, under the terms of the build agreement, which therefore merits payment. The builder or bank may wish instead to expressly state the particular events which could lead to payment. By far the most important triggering event which must be described in the guarantee is the builder’s insolvency. It will not be good enough, for example, for the guarantee to become payable only when a receiver has been appointed, or any dispute between buyer and builder is settled, as these may take many months or even years in some jurisdictions. Far better for the guarantee to become payable as soon as it can be shown that the builder is in financial difficulties. Moreover, the procedure for presenting the bank with a demand for payment should be simple and straightforward. And there’s no point in having a guarantee which offers high protection, but which expires too soon. Where a guarantor will only pay after the matter has been litigated (in the absence of settlement) the guarantee must last for a period of years to take account of lethargic court processes. A number of owners have, in the past, enjoyed using their own business acumen to diagnose mismanagement and their own capital to save it. But this takes time and may not lead to a solution. Moreover, if the builder survives until completion of the yacht, there may still be issues with the delivered yacht for which the buyer wants significant compensation, and may still need the protection of the guarantee. If it expires immediately upon delivery and sea trial, for example, then there will be virtually no time in which to decide whether or not demand payment, and calculate the appropriate figure. CHANGE ORDERS It may well be that it’s only when you see your yacht start to take shape that realise that the layout or specification could be improved. While there’s a temptation to discuss modifications orally – for convenience – cost overruns and disproportionate delays may result. Modification procedures must be clear, and rigidly adhered to. As large numbers of changes may also start to affect the builder’s other projects, the builder may want terms in the contract to the effect that such modifications will only take effect if the builder agrees to the proposed adjustment to the contractual price and delivery date. The builder may also want to reserve a right of refusal if other projects would be affected. Additional payments may also be required. Clearly, the builder could be put in an overly dominant position if such a clause was not well drafted. In the case of very large projects taking many years, you may also want to leave gaps in the specification to allow for last-minute choices of high-tech equipment. SUBCONTRACTORS It’s common to subcontract significant elements of the builds, but you must make sure that only approved third parties can be brought in. If there’s any doubt, ask your project manager to visit the subcontractors and their previous projects to assess quality. To avoid confusion, the builder should still be expressly liable for any of its suppliers' or subcontractors' mistakes. Further, the builder must be obliged to pay suppliers promptly, and the materials provided must not be allowed to be subject to any form of title retention – to prevent anything being reclaimed later. DAMAGE While the builder should be obliged to insure the part-built project, the quality and wording of that insurance must also be clearly specified if it’s to be worth more than the paper it’s written on. The Institute Clauses for Builders’ Risks policy wording is adequate, and security obtained on the Lloyd’s of London insurance market (or equivalent) should be insisted upon. The builder and buyer should be named as joint assured, with any claims payable to the builder and buyer as a reflection of their interests at the time of the claim. There will also be other matters to be considered in the event of the project being damaged. You should have the option of either cancelling the contract and being refunded payments made up to that point, or requiring the builder to use its insurance pay-out to carry on with the build, in spite of the enormous delays involved. Where the damage causes the project to be scrapped rather than just delayed, builders will normally be reluctant to agree to compensate buyers for the loss of their slot, and for any premium a speculative buyer hoped to make on the build. It is still open to buyers to seek separate insurance for this loss. A new delivery schedule will need to be agreed. FORCE MAJEURE Events beyond the control of the builder are known as ‘force majeure’ events. These may or may not be defined by law. Where they are not, the parties need to ensure that all possibilities are covered, and what their effect will be. Typically, the contractual delivery date will be extended, but the parties will need to clarify whether this is by reference to the number of days the force majeure event continued or the effect on the project’s critical path. Even where delay is caused by a force majeure, such latitude should be subject to a cap – so that the point where enough is enough is clear. The exception to this will be delays due to modifications ordered by the buyer. DELIVERY Sorting matters out with a builder after the final instalment has been paid can be especially difficult. It is crucial that all the correct documents relating to legal title are presented before payment is made. Otherwise the new yacht cannot be registered and will not be allowed to sail anywhere. The place of legal delivery may also have tax implications, and must be agreed. At the point of delivery, the yacht should not only function and appear as envisaged, but it should meet all the classification society and Flag State regulations, especially if it is going to be chartered. Build agreements should allow not only access to the builder for the buyer’s representative, but reasonable tests and inspections, including those to be undertaken at subcontractors’ and suppliers’ premises. The representative should be allowed to require the builder to rectify evident faults immediately. TESTING The newly completed yacht will have to be formally tested, at sea, to make sure that the performance matches the specification. This is the buyer’s opportunity to determine whether the yacht has been built in conformity with the agreed contractual specifications and meets the contractual performance criteria. The owner’s representative, Class and Flag State surveyors will attend these trials and sign off the individual test protocols. As no two yachts are ever identical, their performance in terms of displacement, speed, noise levels, vibration and range, are difficult to predict even whilst using the latest computer-aided design techniques, FEA (finite element analysis), CFD (computational fluid dynamics), tank testing and wind tunnel testing. A practical solution is to agree a small margin of tolerance followed by incremental compensation which the builder must pay if the performance criteria aren’t met but still fall within certain limits. This incremental approach can only be applied to a certain extent and thereafter the right of rejection must lie with the buyer. REJECTION Ultimately, if faults are not put right, the buyer must have the right to refuse delivery. So the build agreement must make it crystal clear whether a particular requirement is to have the legal status of a condition, entitling the buyer to refuse delivery – especially as small defects are simply inevitable in any large project. The laws of most jurisdictions are vague on such matters, involving considerations of whether the yacht is of ‘satisfactory quality’ and ‘reasonably fit’ for purpose, and therefore in a ‘deliverable’ condition. This problem is made much worse by the critical importance of aesthetic elements. The standard contractual term for the small and inevitable defects is a ‘minor non-conformity’. Usually, the buyer will be forced to accept delivery with the minor non-conformity list outstanding, under the proviso that the list is taken care of by the builder as soon as possible. WARRANTY Not all of your new yacht’s inevitable little faults will come to light during the trails. Only over time will all the equipment and systems be used in varying weather conditions. The builder should guarantee materials and workmanship for a period of warranty – at least a year – after delivery. Builders will usually agree to correct defects during this period, but not to compensate. The builder may demand that otherwise pre-existing legal rights are given up, and that once the warranty period has expired no further responsibility will rest with the builder. The builder may not wish to compensate for loss of use and charter income, and a detailed notification procedure may also have to be complied with. Such demands should be considered carefully. Where significant concessions are granted by the buyer, the contract should ideally provide for the last payment instalment to be withheld until the end of the warranty period. It may be necessary to bring the yacht into dry-dock, so the buyer must be entitled to have work carried out by a yard other than that in which she was built if cruising schedules are not going to be spoiled.. DISPUTES Disputes between the buyer and builder are most likely to be technical in nature. Even the lustre of paint, for example, can be objectively measured. As courts are better at deciding points of law rather than fact, it makes sense to decide which points would be better decided by an independent expert. A representative from the classification society, for example, is typically agreed on to decide points upon which the society has created technical rules, but the use of another mutually agreed third-party expert should also be agreed for other matters. The expert should be asked to provide an independent opinion, and not act as arbitrator. Arbitrators can decide upon matters of law and evidence, and this requires the expertise of an experienced legal expert. Matters which are non-technical, or which involve large sums, should be agreed to be arbitrated according to the rules of an established arbitrators’ association, or referred to court. The choice of arbitration or litigation may depend on the enforceability or otherwise of an arbitrator’s decision, compared with a court judgment, in the home states of the parties involved. Sometimes, an arbitrators’ decision will be the more powerful of the two, and – unlike court proceedings – arbitrations are confidential in nature. To include long-term flexibility, and an acceptance that some flaws will be evident in the finished product, into a cast-iron contract, is no easy task. Time spent discussing and agreeing on this at the start will be a sound investment compared with the potential arguments which bubble-up later on. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about The Build Process Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about The Build Process

As soon as you enter any country’s waters, you’re under an obligation to abide by all their laws. Detailed onboard examinations are used to check compliance. Port State Control (PSC) is the system of inspection by officials to check vessels’ condition and operation. Safety, security, environmental protection and seafarer welfare are the areas of interest. Port States can require defects to be put right, and detain vessels if necessary. This is all separate, and in addition to, any consideration of the tax status of the owner, beneficial owner and yacht. Home Handbook Regulation / / Port State Control 19 June 2011 Last revised minutes 3 Reading time As soon as you enter any country’s waters, you’re under an obligation to abide by all their laws. Detailed onboard examinations are used to check compliance. Port State Control (PSC) is the system of inspection by officials to check vessels’ condition and operation. Safety, security, environmental protection and seafarer welfare are the areas of interest. Port States can require defects to be put right, and detain vessels if necessary. This is all separate, and in addition to, any consideration of the tax status of the owner, beneficial owner and yacht. minutes 3 Reading time 19 June 2011 Last revised As soon as you enter any country’s waters, you’re under an obligation to abide by all their laws. Detailed onboard examinations are used to check compliance. Port State Control (PSC) is the system of inspection by officials to check vessels’ condition and operation. Safety, security, environmental protection and seafarer welfare are the areas of interest. Port States can require defects to be put right, and detain vessels if necessary. This is all separate, and in addition to, any consideration of the tax status of the owner, beneficial owner and yacht. The Paris Memorandum of Understanding on Port State Control (Paris MoU) includes European Union coastal countries, Canada, Croatia, Norway, and Russia, among others. The Netherlands Ministry of Infrastructure & Environment provides the secretariat for the Paris MoU. The Paris MoU introduced the New Inspection Regime (NIR) which aims to inspect 100% of all ships, including yachts, visiting ports in the Paris MoU region over a three-year period. Yachts are now included in the NIR and are subject to assessments regarding safety, health, and the environment. Vessels are categorized into High Risk Ships, Standard Risk Ships, and Low Risk Ships, determining the frequency of inspections. The risk categorization is based on factors such as previous inspections, vessel type and age, the yacht's manager's performance, and the country of registry. Inspections are not meant to disrupt cruising schedules but are necessary for compliance. Inspections focus on training, management systems, and the physical integrity of the yacht to ensure safety for the owner, guests, and crew. Preparation is key to a hassle-free inspection, including compliance with relevant rules, crew training, and detailed guidelines. Safety and security procedures must be followed, and honesty is crucial during inspections, as falsifying records or lying to officials is a serious offence. The risk categorization is based on factors such as previous inspections, vessel type and age, the yacht's manager's performance, and the country of registry. Inspections are not meant to disrupt cruising schedules but are necessary for compliance. Inspections focus on training, management systems, and the physical integrity of the yacht to ensure safety for the owner, guests, and crew. Preparation is key to a hassle-free inspection, including compliance with relevant rules, crew training, and detailed guidelines. Safety and security procedures must be followed, and honesty is crucial during inspections, as falsifying records or lying to officials is a serious offence. The Paris Memorandum of Understanding on Port State Control (Paris MoU) includes European Union coastal countries, Canada, Croatia, Norway, and Russia, among others. The Netherlands Ministry of Infrastructure & Environment provides the secretariat for the Paris MoU. The Paris MoU introduced the New Inspection Regime (NIR) which aims to inspect 100% of all ships, including yachts, visiting ports in the Paris MoU region over a three-year period. Yachts are now included in the NIR and are subject to assessments regarding safety, health, and the environment. Vessels are categorized into High Risk Ships, Standard Risk Ships, and Low Risk Ships, determining the frequency of inspections. All European Union coastal countries, and Canada, Croatia, Norway, and Russia, are party to the Paris Memorandum of Understanding on Port State Control (Paris MoU). The Hague-based Netherlands Ministry of Infrastructure & Environment provides the secretariat. There are 6 other MoU blocs worldwide. INSPECTION REGIME The Paris MoU New Inspection Regime (NIR) introduced a target of inspecting, over any three-year period, 100% of all the ships visiting ports and anchorages in the Paris MoU region. Yachts have been lumped-in with trading ships and ferries. The NIR applies to “ships”, which includes all yachts. Where a yacht is so small, or is not chartered, such that parts of the various maritime conventions (SOLAS, MARPOL, etc) do not apply, the PSC’s task is now to “…to assess whether the ship is of an acceptable standard in regard to safety, health or the environment.” Further, in assessing such vessels, account must be taken, “…of such factors as the length and nature of the intended voyage or service, the size and type of the ship…”. All vessels are deemed to fall into one of three risk profiles. High Risk Ships must be inspected 5 to 6 months after the last inspection, Standard Risk Ships 10 to 12 months after the last inspection and Low Risk Ships 24 to 36 months after the last inspection. Additional inspections, however, can also be triggered by overriding or unexpected factors. Time windows for the next periodic inspection re-start after any inspection. Where a window has come and gone without checks having been carried – because a yacht has not called at a participating port – that yacht will automatically be targeted on arrival. The risk categorisation is based on a number of factors – including the details and results of previous Paris MoU inspections, the vessels’ type and age, the performance of the yacht’s manager and the country of registry. In fact, for a yacht to be a Low Risk Ship, the flag must be approved and appear on the annual Paris MoU White List. The United States, Switzerland, Saint Vincent and the Grenadines, Panama, and the Netherlands Antilles all fail to make the List. Unless a yacht is a High Risk Ship, port officials have the option of undertaking an initial inspection – then deciding whether or not to carry out a detailed inspection. INSPECTIONS Inspections are not intended to interrupt cruising schedules. They are carried out because they have to be. Most officials in most ports will be polite and efficient, but they can make life difficult if they choose to. While nearly all large yachts are extremely well presented, it is the training and management systems – as well as the physical integrity of the vessel – which is being examined. Poorly-run vessels can still present a hazard to the owner, guests and crew: perhaps it is better that these issues are picked up sooner rather than later. PREPARATION It’s up to the yacht’s captain and manager to ensure that the relevant rules are being complied with and that all crewmembers know what do in an emergency. Detailed guidelines and instructions should already be laid out, where these are mandatory, in the Safety Management System and Ship Security Plan, but it’s how these and other forms of pre-prepared guidance translate into reality that’s key to a fast and hassle-free inspection. First impressions are crucial. Do all the deckhands and steward(ess)s automatically know to be especially courteous with the PSC inspector? They may not be wearing an official uniform, and could just be yet another supplier. They may not take kindly to being told to remove their shoes – so a box of disposable shoe covers kept by the passarelle will get the process off on the right foot. Safety and security procedures must be followed at all times: it is the checks that count – not the ticks. Even where a guest may be inconvenienced by a safety briefing, this will be as nothing compared to the yacht being detained later. Falsifying logs and records, or lying to officials, will constitute a serious criminal offence. It is always better to admit a failing than to cover it up: the inspectors have seen it all before. Members would be well advised to discuss the possibility of inspection with captains and managers sooner rather than later. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about The ISM Code Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about The ISM Code

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Building a large, custom yacht is a complex process which must be carefully choreographed. There’re a lot of specialists involved, and much which can wrong. Here we look at what construction actually involves, and why building your team at the outset is such a vital first step. Home Handbook Building / / The Build Process 10 May 2023 Last revised minutes 4 Reading time Building a large, custom yacht is a complex process which must be carefully choreographed. There are a lot of specialists involved, and much which can wrong. Here we look at what construction actually involves, and why building your team at the outset is such a vital first step. minutes 4 Reading time 10 May 2023 Last revised Building a large, custom yacht is a complex process which must be carefully choreographed. There are a lot of specialists involved, and much which can wrong. Here we look at what construction actually involves, and why building your team at the outset is such a vital first step. Large yacht construction involves a tightly-controlled sequence of events, and adherence to classification society standards for welding and quality control. Machinery and larger systems must be installed before the superstructure is joined ot the hull. Filling, fairing, insulation, and the addition of cable trays and pipework must be carefully choreographed. Interior panels are prefabricated and should be removable for access and maintenance. The sooner the build captain is recruited the better. Project managers should be present at all stages of the build and provide progress reports. Crewmembers, other than the build captain, are engaged as the build nears completion, with the build captain overseeing recruitment. Insurance coverage should be clarified in the build agreement, including employer's liability insurance for crew. Sea trials are conducted to test the yacht's systems and performance, followed by formal legal delivery and a warranty period to address any issues that arise. Project managers should be present at all stages of the build and provide progress reports. Crewmembers, other than the build captain, are engaged as the build nears completion, with the build captain overseeing recruitment. Insurance coverage should be clarified in the build agreement, including employer's liability insurance for crew. Sea trials are conducted to test the yacht's systems and performance, followed by formal legal delivery and a warranty period to address any issues that arise. Large yacht construction involves a tightly-controlled sequence of events, and adherence to classification society standards for welding and quality control. Machinery and larger systems must be installed before the superstructure is joined ot the hull. Filling, fairing, insulation, and the addition of cable trays and pipework must be carefully choreographed. Interior panels are prefabricated and should be removable for access and maintenance. The sooner the build captain is recruited the better. Generally speaking, yachts are far more complex than working vessels of a similar size, and finishes must, of course, be of a far higher standard. Yard cleanliness and orderliness make ensuring this much easier. You’ll have gotten a feel for the builder’s work practices having visited beforehand . Once the build is underway, there’s a lot going on and a lot to go wrong. For steel-hulled yachts, huge plates are cut to shape before being assembled and welded into place. Steps must be taken in precisely the right order. Where the vessel will be classed, welders must be qualified in accordance with the classification society standards. The welds themselves must conform to measurable standards with tolerances measuring less than a millimetre. If it’s not right it must be corrected until it is. It can take a year and half to complete a bare 100-metre hull, during which about 1,000 tonnes of steel will be used. Superstructures are typically made from aluminium – requiring even greater welding skills. They are usually constructed in sections, away from the hull, then bonded together. Larger items of machinery, such as engines and generators, must be installed before superstructure encloses the internal spaces. The project will then typically be moved way from under the gantry cranes of the construction facility, to a fitting-out facility, where the machinery and systems will be fitted. The hull’s surface will be slightly rippled and will need filling and fairing: a skilled and labour-intensive process. The epoxy fillers, and paints covering them, are sensitive to temperature and humidity. Insulation, cable trays and pipework can now be installed – in exactly the right sequence. Interior panels are normally prefabricated by subcontractors, before being brought to the yard for installation. They will normally produce full-scale mock-ups of various interiors which you can check before they are installed. It’s important that the bulkhead and deckhead panels be removeable to allow access as needed for regular system maintenance. It's vital that photographs are taken during construction so that what’s behind the panels can be checked easily. SUPERVISION The builder will employ its own project manager(s), but with so much going on it’s easy to see why your project manager needs to be present at all stages of the build. Your project manager should compile monthly reports showing progress, with photos and detailing how this compares to the agreed time schedule. Your project manager should also know the build agreement inside-out, and must remind you of upcoming decision deadlines in good time. As with any large project, communication is key. ENGAGING CREW More and more crew are brought in as the build nears completion. The build captain is first – and in the case of larger projects may have been engaged at the outset. Where the build is on a more modest scale, the project manager also performs the role of build captain and may be the vessel’s first captain following launch. Build captains perform two roles: firstly they add a helpful seagoing captain’s perspective to the build, and secondly they recruit and oversee other crewmembers. The build captain will need excellent organisational skills, an analytical mindset and be a superb manager and motivator. Next comes the Chief Engineer, who can bring real value right away, followed by other heads of departments, who will be key in recruiting those who report to them – and may already have contacts waiting in the wings. Some hires may have been misjudged and just aren’t the right fit. This is to be expected. Not hiring crew until absolutely necessary can be a false economy. There’s much to be got ready before launch. Aside from completing the build, operational and regulatory procedures need to be established, and if these are rushed they may not be fit for purpose. INSURANCE The build agreement should be clear on when the build no longer bears the risk of damage occurring to the yacht, or the liabilities incurred to third parties. There should be no gaps in cover. Keep in mind, too, that you will need employers’ liability insurance in respect of crew as soon as they are engaged. While insurance brokers owe a legal duty to you, as insured, in reality they can value their commercial relationships with underwriters more. Indeed, some will expressly be your agent at the time of inception, but become the underwriter’s agent once a claim has been made. Be warned, and examine the policies in detail. TRIALS At last, your new yacht is complete and is ready for her first sea trial. You may like to come along – but it’s not going to be the most exciting cruise. Before she goes anywhere, there’s a dock trial. The generators and main engines are started and their cooling systems checked for leaks. Once the captain is satisfied that she is ready, she can head out to sea. Aboard will be representatives from the builder, subcontractors and classification society, as well as your own team. All kinds of objective measurements are made which can be checked against the contractual specification. The trial will take most of the day, or a few days for a large, complex vessel. DELIVERY At last your yacht is ready for formal, legal delivery. There may still be teething problems evident at the time of delivery, which the builder hasn’t had time to correct, but which you’re happy to live with for now. The scope and nature of such works must be formally agreed. The build documentation will have been examined and approved by your lawyer, and will be released to you against receipt of the penultimate payment – the final payment being made upon successful completion of the warranty period. WARRANTY PERIOD Because yachts are, in essence, a matrix of complex systems operating together in a harsh environment, it is inevitable that some systems will fail, or fail to perform as expected. The warranty period should be clearly set out in the build agreement. It is vital for crewmembers to inform the captain, and the captain to inform you and the builder, right away and in writing, of any faults. Documentation and record keeping are key. Keep in mind any notice formalities which must be observed. It's in the builder’s interests to work with you to create a yacht which will serve as a masterpiece – quite literally a shining example of what that yard is able to produce. Finding new clients is expensive and time-consuming. It’s far easier to keep existing clients happy and work towards selling them a larger yacht. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about A Firm Foundation Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about A Firm Foundation

So you have your team in place. In the case of a full custom yacht, you'll now have your design and specification to hand. And if it’s a semi-custom or series production yacht you’re going for, your team understands your vision and is ready to review, negotiate and modify the builders’ pre-existing designs and specifications. It’s time to shortlist the builders. Home Handbook Building / / Engage a Builder 10 May 2023 Last revised minutes 3 Reading time So you have your team in place. In the case of a full custom yacht, you have your design and specification to hand. And if it’s a semi-custom or series production yacht you’re going for, your team understands your vision and is ready to review, negotiate and modify the builders’ pre-existing designs and specifications. It’s time to shortlist the builders. minutes 3 Reading time 10 May 2023 Last revised So you have your team in place. In the case of a full custom yacht, you have your design and specification to hand. And if it’s a semi-custom or series production yacht you’re going for, your team understands your vision and is ready to review, negotiate and modify the builders’ pre-existing designs and specifications. It’s time to shortlist the builders. The asking prices of yachts depend on builder pedigree and size, with Northern Europe, France, Italy, and Turkey being viewed as having higher pedigree. Builders often subcontract parts of builds to suppliers, so effective build agreements and project management are crucial. Whittle down the short-list of builders by checking their available build slots and assessing their insurances and financial stability. Visit the builder's facilities to evaluate their cleanliness, safety, and organization, as well as the quality of their craftsmen and office facilities. Assess the builder's management team for communication and receptiveness to new concepts, as well as their flexibility in equipment suppliers and subcontractors. Consider the builder's financial security and willingness to have the build agreement subject to English law and jurisdiction. Choose a builder based on factors beyond the lowest bid, such as personal impression and team performance. Builders often request a Letter of Intent (LOI) before reserving a build slot, which outlines the price, payment terms, design, specification, and delivery timeframe. Clarify which parts of the LOI are binding and split it into a binding and non-binding section if necessary. Negotiate the build agreement after securing the LOI, taking legal advice before agreeing to any terms. Consider the builder's financial security and willingness to have the build agreement subject to English law and jurisdiction. Choose a builder based on factors beyond the lowest bid, such as personal impression and team performance. Builders often request a Letter of Intent (LOI) before reserving a build slot, which outlines the price, payment terms, design, specification, and delivery timeframe. Clarify which parts of the LOI are binding and split it into a binding and non-binding section if necessary. Negotiate the build agreement after securing the LOI, taking legal advice before agreeing to any terms. The asking prices of yachts depend on builder pedigree and size, with Northern Europe, France, Italy, and Turkey being viewed as having higher pedigree. Builders often subcontract parts of builds to suppliers, so effective build agreements and project management are crucial. Whittle down the short-list of builders by checking their available build slots and assessing their insurances and financial stability. Visit the builder's facilities to evaluate their cleanliness, safety, and organization, as well as the quality of their craftsmen and office facilities. Assess the builder's management team for communication and receptiveness to new concepts, as well as their flexibility in equipment suppliers and subcontractors. As your broker will have told you – or as you’ll have worked out by browsing online listings – the asking prices of yachts are dependent on builder pedigree as well as size. Broadly, builders in Northern Europe tend to be viewed as having the highest pedigree, followed by France and Italy and then Turkey. But this is much about perception than anything else. The reality is that many parts of the builds are subcontracted to suppliers who can place teams into any yard you wish. What’s key is an effective build agreement and project management. The use of well-known exterior and interior designers can add kudos and value. You’ll soon establish where your project can built. ASSESS THE CANDIDATES The short-list can be whittled down by making inquiries and establishing at the outset which of these builders have build slots available which suit your time horizon. The next task is to establish that the builder has the correct insurances and place and a strong balance sheet. A build taken on which was too ambitious or priced too keenly can quickly turn a prestigious name into a financial basket case. Some information will be publicly available, or an NDA can be put in place to allow you to examine more sensitive details. You should obtain a credit reference if possible. Then you should visit the builder in person. Modern yacht-building facilities are clean, safe, well-lit and orderly. Owners’ teams should have excellent office facilities, and there should be secure areas where owner-supplied items are clearly marked and stored. The workers are well-paid and highly-skilled craftsmen and women. It is (or should be) a far cry from many commercial and military shipyards. By meeting the builder’s management team, you can get a feel for their communicativeness, and their receptiveness to any new concepts you have in mind. You also need to assess the degree to which they are wedded to certain equipment suppliers and subcontractors in case you're considering alternatives. The builder will need to provide the right financial security and be open to having the build agreement subject to English law and jurisdiction: if it came to it, would you really receive justice in the builder’s local courts? You may well choose the builder you liked the look of, or whose team impressed you, over the one which came in with the lowest bid. RESERVE A SLOT It’s common practice for builders to request a Letter of Intent (LOI) from a prospective buyer before they’ll reserve a build slot. This stage is half-way between an informal expression of interest and a build agreement. The term is often used, but parties can be at odds about what the LOI means in practice and, in particular, the extent to which it’s going to bind the parties. As with many contracts in the international maritime sphere, the uncontroversial default choice of law for LOIs is that of England. Insistence on local laws should ring alarm bells. Under English law, contracts must be certain. Agreements to agree, and to negotiate in good faith, are unenforceable as they’re uncertain. The LOI can, and should, set out the price and payment terms, the design and specification, and the delivery timeframe. You may also want the right of first refusal for any earlier slots which become available. Depending on how these are drafted, each of these elements may or may not be binding. Different builders may have different expectations, but there is no overall consensus on this. The parties need to be clear on which parts are binding, and may be helpful to split the LOI into a binding and non-binding section. The degree to which you obtain certainty, while still retaining the flexibility to change or cancel the slot, is a matter of negotiation. Money may or may not change hands. If you haven’t had the owning company incorporated, the builder may want the LOI to be in your name personally. Whether you accede to such request is, of course, up to you, but the LOI must then contain a right for you to assign your interest over to the company upon incorporation. Never agree to an LOI before taking legal advice. With the LOI in place, it’s time to negotiate the build agreement . Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about The Build Agreement Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about The Build Agreement

The loan agreement and/or the deed of covenant will provide that the ship mortgage will become enforceable following a defined default event. What constitutes default will be set out in the loan agreement – and will cover more than just a failure to make loan repayments. A breach of any term of the security documentation, in particular positive or negative covenants, can constitute a default. Home Handbook Financing / / Loan Enforcement 3 March 2014 Last revised minutes 3 Reading time The loan agreement and/or the deed of covenant will provide that the ship mortgage will become enforceable following a defined default event. What constitutes default will be set out in the loan agreement – and will cover more than just a failure to make loan repayments. A breach of any term of the security documentation, in particular positive or negative covenants, can constitute a default. minutes 3 Reading time 3 March 2014 Last revised The loan agreement and/or the deed of covenant will provide that the ship mortgage will become enforceable following a defined default event. What constitutes default will be set out in the loan agreement – and will cover more than just a failure to make loan repayments. A breach of any term of the security documentation, in particular positive or negative covenants, can constitute a default. When there is a default, the lender may choose to waive it or demand that it be corrected by the borrower. The lender can enforce the mortgage through a deed of covenant that grants specific powers. The deed of covenant allows the lender to order the yacht to a specific port, manage the yacht, take possession of it, and sell it. The lender can use a power of attorney granted by the borrower to act on their behalf, including selling the yacht. Lenders have pre-existing rights, such as taking possession of the yacht or selling it when loan repayments are outstanding. Lenders can arrest the yacht through a court application, leading to a judicial sale that may attract higher prices. The lender is responsible for immediate expenses incurred after the arrest, such as crew salaries and mooring fees. The lender can apply for an order of sale before judgment, which involves appraisal, valuation, and advertising for sealed bids. If a default occurs during a charter, the lender's rights may be restricted if it interferes with the charter, but certain conditions must be met. The lender's claim as a mortgagee is prioritized over unpaid creditors with maritime liens and possessory liens. After a court sale, proceeds are distributed in a specific order. Lenders can arrest the yacht through a court application, leading to a judicial sale that may attract higher prices. The lender is responsible for immediate expenses incurred after the arrest, such as crew salaries and mooring fees. The lender can apply for an order of sale before judgment, which involves appraisal, valuation, and advertising for sealed bids. If a default occurs during a charter, the lender's rights may be restricted if it interferes with the charter, but certain conditions must be met. The lender's claim as a mortgagee is prioritized over unpaid creditors with maritime liens and possessory liens. After a court sale, proceeds are distributed in a specific order. When there is a default, the lender may choose to waive it or demand that it be corrected by the borrower. The lender can enforce the mortgage through a deed of covenant that grants specific powers. The deed of covenant allows the lender to order the yacht to a specific port, manage the yacht, take possession of it, and sell it. The lender can use a power of attorney granted by the borrower to act on their behalf, including selling the yacht. Lenders have pre-existing rights, such as taking possession of the yacht or selling it when loan repayments are outstanding. Where there is a default, the lender decide that the commercial relationship is worth saving. The lender may therefore choose to waive the default – either unconditionally or if the borrower complies with new conditions. Alternatively, the lender may demand that a default be put right by the borrower or even put things right itself and charge the borrower for this – such as renewing an insurance policy. If all else fails, the lender may press ahead with enforcement action. CONTRACTUAL ENFORCEMENT The deed of covenant sets out the lender’s enforcement powers, exercisable once the mortgage has become enforceable. This is on top of the rights existing in law anyway (set out below). Typical rights granted by the deed of covenant include the following: To order the captain to proceed to a port nominated by the lender – which will be within a jurisdiction where arresting the yacht is particularly easy or convenient; To manage the yacht, including chartering her out (assuming that the yacht is commercially registered and insured for chartering), and even replacing the entire crew if need be; To take possession of the yacht ahead of a sale, and take her to a jurisdiction where a relatively rapid sale can be concluded or where the lender will rank higher than other creditors; and To sell the yacht, either by public action or private sale. POWER OF ATTORNEY As well as the borrower’s covenants, the lender can use any power of attorney granted by the borrower to the lender, by which the lender can act in the borrower’s name to correct any default, or even go so far as to sell the yacht without much further ado. PRE-EXISTING RIGHTS Beyond the lenders rights which exist by virtue of the borrower’s covenants and any power of attorney, the law automatically gives lenders the ability to do any of the following: To take possession of the yacht, where the borrower has actually defaulted on loan repayments, or the lender’s security has been compromised as a result of the borrower’s (in)actions. In reality, this is rare as the lender will be on the hook for operational costs – even assuming that the lender has the relevant experience or can procure this at short notice. To sell the yacht, but only when the mortgage repayments are outstanding, and not simply where covenants have been breached: for this the lender will have to rely on the express provisions of the loan agreement and deed of covenant. To arrest the yacht, on application to the court, as a procedural step leading to the judicial sale of the vessel. A judicial sale may be preferred over a sale by the lenders this allows a buyer to but a yacht free from pre-existing liens and encumbrances – which benefits may help to boost the price of what will otherwise be something of a fire sale. The arrest of a yacht will result in the court’s officer, the Admiralty Marshal, incurring expenses right away, such as crew salaries, mooring fees and essential maintenance. The lender’s lawyer must provide a personal undertaking to pay such expenses, and will need a considerable sum paid to his or her firm on account. The lender will also need to arrange first and third party insurance if need be. Following arrest, the lender may apply to the court, even before judgment has been handed down, for an order for sale. The court order will contain instructions for the Admiralty Marshal to have the yacht appraised, valued and advertised for sale, typically on a sealed bid basis. The Admiralty Marshal’s Conditions of Sale will apply, under which – if the Admiralty Marshal accepts a sealed offer – the buyer must pay 10% right away and the balance within one week. CHARTERS Should a default occur when a charter has been booked or the she’s out on charter, the lender, as mortgagee, will be bound by the terms of charter, and prevented from exercising its rights under the mortgage, such as taking possession, arrest and/or sale, where doing so would interfere with the charter, as long as: Undertaking or completion of the charter doesn’t compromise the lender’s security; and The borrower is willing and able to complete the charter. PRIORITY Even with all the loan documentation, covenants, etc, in place, a lender’s claim as mortgagee is trumped by those with maritime liens such as unpaid crew, or those with a possessory lien such as a refit yard. This is the case even though neither maritime nor possessory liens can be registered anywhere. Mortgagees will take priority over all other unpaid creditors. The deed of covenant will usually stipulate that, following sale, the lender’s costs and expenses are paid first, then the outstanding principal and interest will be paid off. The borrower will then receive any amount left over. Following a court sale, the proceeds are distributed in the following order: Admiralty Marshal’s fees and expenses; Lender’s legal costs; Maritime liens; Possessory liens; Mortgages and charges over the yacht, in order of registration; and Statutory liens. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Leasing Overview Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Leasing Overview

Yacht brokers play an essential role in the sale and purchase market. Reputable brokers know the current market, how to market the vessel, how much for and to whom. While they can also be engaged to represent buyers, this article looks at their role as the seller’s representative. Home Handbook Buying / / The Brokers' Role 2 September 2020 Last revised minutes 5 Reading time Yacht brokers play an essential role in the sale and purchase market. Reputable brokers know the current market, how to market the vessel, how much for and to whom. While they can also be engaged to represent buyers, this article looks at their role as the seller’s representative. minutes 5 Reading time 2 September 2020 Last revised Yacht brokers play an essential role in the sale and purchase market. Reputable brokers know the current market, how to market the vessel, how much for and to whom. While they can also be engaged to represent buyers, this article looks at their role as the seller’s representative. Yacht brokers are generally unregulated in most parts of the world, allowing anyone to become a broker without barriers to entry. Due diligence is essential for prospective yacht buyers to assess the credibility and ethics of brokerages and individual brokers. Brokers often prefer to work under a Central Agency Agreement, granting them exclusive rights to market the yacht and ensuring a return on their investment. It is important for buyers to verify if the broker they are dealing with is the Central Agent to avoid complex communication chains. The exclusivity term in the Central Agency Agreement can be negotiated, but sufficient time should be given to the broker for marketing and selling the vessel. Even if a sale is not directly related to the broker's efforts, they may still be entitled to a commission during the agreement period. Joint Central Agency Agreements may involve multiple agents deciding on marketing and commission splits, requiring careful consideration. Disputes between sellers and brokers often arise due to vague or ambiguous broker instructions. Standard terms and conditions provided by brokers should be examined carefully to understand the scope of services and any limitations or exclusions. Yacht brokers have fiduciary duties to act in the best interest of their principals, exercise reasonable care and skill, and avoid conflicts of interest. Even if a sale is not directly related to the broker's efforts, they may still be entitled to a commission during the agreement period. Joint Central Agency Agreements may involve multiple agents deciding on marketing and commission splits, requiring careful consideration. Disputes between sellers and brokers often arise due to vague or ambiguous broker instructions. Standard terms and conditions provided by brokers should be examined carefully to understand the scope of services and any limitations or exclusions. Yacht brokers have fiduciary duties to act in the best interest of their principals, exercise reasonable care and skill, and avoid conflicts of interest. Yacht brokers are generally unregulated in most parts of the world, allowing anyone to become a broker without barriers to entry. Due diligence is essential for prospective yacht buyers to assess the credibility and ethics of brokerages and individual brokers. Brokers often prefer to work under a Central Agency Agreement, granting them exclusive rights to market the yacht and ensuring a return on their investment. It is important for buyers to verify if the broker they are dealing with is the Central Agent to avoid complex communication chains. The exclusivity term in the Central Agency Agreement can be negotiated, but sufficient time should be given to the broker for marketing and selling the vessel. In most parts of the world, yacht brokers aren’t regulated in law. There are no barriers to entry. Anyone can set themselves up as one – and many frequently do. Some brokers are not averse to offering insurance, for example, without the necessary regulatory permits to do so – which often paints an accurate picture of their approach to professional ethics and legal niceties. Recommendations are useful, but prospective buyers need to conduct due diligence on both brokerages and individual brokers. CENTRAL AGENTS As well as working under their own terms and conditions, brokers usually prefer to work under a Central Agency Agreement – under which they have the exclusive right to market the yacht. This gives them peace of mind and will encourage them to do their best to sell the vessel, safe in knowledge that – unless the vessel fails to sell at all – they will see a return on their investment. As a prospective buyer, you should ensure that the broker you are dealing with is indeed the Central Agent: otherwise an unnecessary and inefficient chain of communications can be set up which makes negotiating that much more complex, lengthy and uncertain. MYBA, for example, produces its own approved, standard Central Agency Agreement which is reasonably fair if somewhat simplistic. The exclusivity term of the Central Agency Agreement is a matter of negotiation, but the broker should be afforded a sufficient chance to market and sell the vessel – keeping in mind the yacht show calendar, the vessel’s usual mooring location and the time needed to produce promotional materials, videos, etc. Crucially, under such agreement the broker is usually entitled to commission where the yacht is sold during the period of its currency – even if the sale had nothing to do with the broker’s efforts. Perhaps the seller has a business associate looking to buy her – or a regular charterer is looking to make her his own: if these are realistic possibilities, the agreement will need amending. Alternatively, the seller may prefer to appoint more than one central agent under a Joint Central Agency Agreement, with multiple agents deciding between themselves how the vessel is to be marketed and the commission split. Attention must still be paid to what is to happen where a sale occurs regardless of the joint central agents’ efforts. Disputes between sellers and brokers most often occur because of the vagueness of, or ambiguities contained in, the broker's instructions. Brokers may also seek to regulate the relationship between them and their clients with ‘standard’ terms and conditions. Any prospective client would be urged to examine these carefully, and take advice, to ensure that there are no misunderstandings about the scope of the services being supplied – and the limitation and exclusions which may apply. Any clauses seeking to exclude or limit liability will be subject to laws governing unfair contract terms – and so cannot necessarily be taken at face value. Further, in the unlikely event that the seller is an individual, rather than a company, the terms must usually comply with the Consumer Rights Act 2015 which seeks to ensure that contracts within its remit are, broadly, as fair as possible. In providing brokerage services, a legal agent/principal relationship is established. This means that the relationship between seller and broker is governed not only by the written arrangements made in the brokerage agreement, but by the unwritten (as far as the parties are concerned) law of agency. Well understood by lawyers, but not necessarily by the parties, there can be obligations owed by broker to the seller, and vice versa, of which one or neither is completely unaware. INTERMEDIARY BROKERS Sometimes, central agents just don’t have sufficient market penetration. Perhaps they just don’t have the necessary geographic or cultural reach, or it’s just that their little black book doesn’t have the right numbers in it. They may use other brokers (known as intermediary or sub brokers) and/or other parties to reach the ear of the prospective client. While this should be avoided, for the reasons touched on above, sometimes it’s unavoidable if an opportunity isn’t to be lost. While intermediary brokers have no contractual connection with the seller, they nevertheless have certain rights and obligations. The law recognises the intermediary broker’s right (unless other arrangements have been agreed between them and the Central Agent) to be paid a commission – but only where such broker introduces the buyer to the purchase opportunity, and – crucially – was thereby the, or an, “effective cause” of the sale. In determining where an intermediary broker’s’ actions formed an effective cause rather than simply a cause, the question is whether the party actually brought about the relationship between the buyer and seller. There is no clear set of principles which can be distilled from the many legal cases on this subject. Whether such broker is the effective cause simply depends on the facts of each case – but such an effective cause will be very readily implied by the courts. The intermediary broker does not have to complete or even take part in the negotiations which do take place, nor arrange any meeting, nor persuade either party to enter into the contract. Commission will still be due where the price agreed is lower than that originally put forward. REASONABLE CARE & SKILL Under section 13 of the Supply of Goods and Services Act of 1982, the broker will have an automatic legal duty to exercise reasonable care and skill in performing its services - subject to any express terms of the brokerage agreement. What constitutes reasonable care and skill is what one would expect of a competent yacht broker. In court, independent and authoritative expert testimony would likely be sought to establish what such expectations are and whether these have been met. Intermediary brokers also owe sellers a duty to exercise reasonable care and skill – even in the absence of a direct contractual link. FIDUCIARY DUTIES As agents, brokers owe their principals other particular legal duties, including acting in good faith, and not acting in its own interest (or that of a third party) without the principal's consent. It’s no excuse that the principal would have consented had he or she been asked. COMMISSION There can be confusion regarding the extent to which broker must disclose third party commissions paid, by the broker, in connection with each sale. The courts have accepted that – in the commercial shipping world at least – market practice encompasses the paying of commission, by brokers, to intermediary brokers and other third parties, as part of the broker’s own outgoings. The broker is not required to disclose such costs to his principal unless specifically requested. But (and it’s a big but!) brokers must ensure that their actions do not lead to anyone breaching the provisions of the Bribery Act. It is easy to foresee circumstances under which a captain of the yacht for sale receives a commission without the consent of his employer – thereby committing a criminal offence to which the broker is then an accessory. BROKER AS STAKEHOLDER Under the MYBA Memorandum of Agreement (MOA), the seller’s broker normally acts as ‘stakeholder’ – holding the deposit. This is typical of many such standard sale agreements. The broker must distribute the funds upon the occurrence of certain events listed in the agreement – and must not follow the instructions of other parties including the broker’s own client. Surprisingly, there’s nothing in the MYBA MOA obliging the broker to keep funds in a separate client account, nor pay interest on the cash it holds. PAYING THE BROKER Under the MYBA sale form, the seller must pay the commission directly to the broker(s) identified in the MOA, on successful completion of the sale, or where the sale is not finalised but the seller and the buyer agree a sale within two years of the sale agreement. The broker is made a party to the agreement for certain purposes – giving it the right to enforce those clauses relating to commission. Where the broker isn’t party to the sale agreement, a right of enforcement may be provided by the Contracts (Rights of Third Parties) Act of 1999, which grants a third party the right to enforce a contract under certain circumstances. What practical use this would be where the seller is an owning company which has just sold its only asset and distributed the resulting funds is another matter. COMPLAINTS Where owners are dissatisfied with a broker’s behaviour, it is often worth seeing if matters can be brought to satisfactory conclusion without the need for litigation. Brokers are often members of associations which may have their own codes of conduct, and may have a complaints mechanism. Professional indemnity insurance may be required, and a conversation with underwriters may focus minds especially where there is a substantial policy excess. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about MYBA MOA Clause by Clause Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about MYBA MOA Clause by Clause

The Owners Club's Rules from an agreement between the Club on the one hand, and all Associates, Members and Governors and anyone using this website on the other. They establish a fair and balanced framework which governs respective rights and responsibilities. Home About Rules / / Them's the Rules These Rules from an agreement between the Club on the one hand, and all Associates, Members and Governors and anyone using this website on the other. They establish a fair and balanced framework which governs respective rights and responsibilities. You’re bound by the Rules, so please take a moment to read them thoroughly. Please contact us if there’s anything you’d like clarified. 1. DEFINITIONS 1.1. In the Rules the following words have the following meanings: 1.1.2. IP Rights: any and all intellectual property rights, whether registered or unregistered, including but not limited to any patents, trademarks, domain names, URLs, design rights, copyright, software rights, database rights, rights in and to business names, product names and logos, processes, trade secrets, confidential information and any similar rights in any jurisdiction. 1.1.3. Link(s): link(s), provided in the Website, to third party resources and businesses; 1.1.4. Material: information, articles, guides, documents and clauses, provided by Us, whether via the Website or otherwise; 1.1.5. Membership: a paid subscription granting You access to certain Material; 1.1.6. Our: belonging to, or emanating from, Us; 1.1.7. Rules: this present document, known as the Rules; 1.1.8. Staff: any employee or representative of The Owners Club, including but not limited to the Our General Secretary; 1.1.9. We, Us: The Owners Club; 1.1.10. Website: the website theownersclub.org, and all pages, parts and elements thereof; 1.1.11. You: You, whether Associate, Member or Governor of The Owners Club, or user of the Website, as the case may be, and Your employer or principal where you act on behalf of one; 1.1.12. Your: of or from You. 2. APPLICATION 2.1. For good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, You agree to be bound by all of the Rules. 2.2. By using the Website, or viewing, downloading, using, sending, storing or receiving, any Material, You agree to be bound by all of the Rules, as well as Our [privacy policy]. 2.3. You are responsible for ensuring that all persons who access the Website through Your internet connection are aware of all of the Rules and that they comply with them. 3. MEMBERSHIP 3.1. Memberships are for one year, payable monthly. 3.2. A Membership entitles You, for one year, subject to monthly Membership fee instalments having been paid to date, to access those parts of the Website which We may from time to time restrict access to those only with Membership, and to access and download certain Material. 3.3. On each anniversary of You joining Us, We will automatically renew Membership unless You have notified Us that You want to cancel Membership by emailing us at gensec@theownersclub.org. 3.4. We may store and when possible update Your payment method on file. It is Your responsibility to maintain current credit card information on file with Us. 3.5. We reserve the right to change Membership fees from time to time. 3.6. From time to time, we may also offer different Membership terms and benefits. 3.7. Membership fees are non-refundable. 3.8. You authorise Us, to collect, without notice, Membership fees using any valid payment source We have on record for You. 3.9. If You fail to provide a payment to Us in full and on time, or We are unable to obtain payment using Your designated payment, We may deem such a failure as notice of cancellation and cancel Membership immediately. 3.10 We may cancel Membership at any time where We consider that You are in breach of any part of the Rules. 3.11. You are responsible for ensuring all contact details You provide Us with are correct and up to date. 3.12. If You choose, or You are provided with, a user identification code, password or any other piece of information as part of Our security procedures, You must treat such information as confidential, and You must not disclose it to any third party. 3.13. We have the right to disable any user identification code or password, whether chosen by You or allocated by Us, at any time, if in Our reasonable opinion You have failed to comply with any of the provisions of these terms of use. 3.14. If You know or suspect that anyone other than You knows Your user identification code or password, You must notify Us promptly at gensec@theownersclub.org. 4. WEBSITE 4.1. You are responsible for making all arrangements necessary for You to have access to the Website. 4.2. You will not: 4.2.1. Use the Website for any purpose that is unlawful or prohibited by the Rules; 4.2.2. Use the Website in any manner which could damage, disable, overburden or impair the Website, or interfere with any other party’s use and enjoyment of the Website; or 4.2.3. Obtain or attempt to obtain any Material through any means not intentionally provided for on the Website. 4.3. We will use reasonable efforts to keep the Website available to You, but if necessary, We may suspend access to the Website, or close it indefinitely. We will not be liable if for any reason the Website is unavailable at any time or for any period. 4.4. The Website may include information and materials uploaded by other users of the Website, including to bulletin boards and chat rooms. Such information and materials have not been verified or approved by Us. The views expressed by other users of the Website do not represent Our views or values. 5. VIRUSES 5.1. We do not guarantee that the Website will be secure or free from bugs or viruses. 5.2. You are responsible for configuring Your information technology, computer programmes and platform to access the Website. You should use Your own virus protection software. 5.3. You must not: 5.3.1. Misuse the Website by introducing viruses, trojans, worms, logic bombs or other material that is malicious or technologically harmful. 5.3.2. Gain unauthorised access to the Website, the server on which the Website is stored or any server, computer or database connected to the Website. 5.3.3. Attack the Website via a denial-of-service attack or a distributed denial-of service attack. 6. UPLOADING 6.1. Any content You upload to the Website will be considered non-confidential and non-proprietary. You retain all of Your ownership rights in Your content, but You grant Us a licence to use, store and copy that content and to distribute and make it available to third parties. 6.2. We have the right to disclose Your identity to any third party who is claiming that any content posted or uploaded by You to the Website constitutes a violation of their intellectual property rights, or of their right to privacy. 6.3. You are solely responsible for securing and backing up Your content. 6.4. When You upload or post content to the Website, You grant Us the following rights to use that content: 6.4.1. A worldwide, non-exclusive, royalty-free, transferable licence to use, reproduce, distribute, prepare derivative works of, display, and perform that user-generated content in connection with the service provided by the Website and across different media, including to promote the site or the service, forever; and 6.4.2. A worldwide, non-exclusive, royalty-free, transferable licence for other users, partners or advertisers to use the content for their purposes, forever. 7. LINKS 7.1. Links are only provided for Your convenience and to help You identify and locate other resources that may be of interest to You. 7.2. We do not control, endorse or monitor the contents of any sites subject to a Link, including, without limitation, any further link contained in a site referenced by a Link, and any changes or updates to site referenced by a Link. 7.3. If You use any service provided on a site to which a Link refers: 7.3.1. We will not be responsible for any act or omission of any third party, including such third party’s access to or use of Your data; and 7.3.2. We do not warrant or support any product or service provided by the third party. 7.4. You may link to the Website home page, provided You do so in a way that is fair and legal and does not damage Our reputation or take advantage of it. 7.5. You must not establish a link in such a way as to suggest any form of association, approval or endorsement on Our part where none exists. 7.6. You must not establish a link to the Website in any website that is not owned by You. 7.7. Our site must not be framed on any other site, nor may You create a link to any part of the Website other than the home page. 7.8. We reserve the right to withdraw linking permission without notice. 8. MATERIAL 8.1. We do not guarantee that Material is correct, up-to-date, or suitable for particular persons or situations. 8.2. The Material may include inaccuracies or typographical errors. 8.3. From time to time, changes may be made to the Material, with or without You being notified. 8.4. Material must not be relied upon for legal, tax or financial decisions and You should consult an appropriate professional for specific advice tailored to Your situation. 8.5. Any templates within the Material are for use only as a starting point for the preparation of legal documents. They must be adapted by You to meet Your individual requirements. You should always take legal advice for Your specific situation. 8.6. We make no representations about the suitability, reliability, availability, timeliness, and accuracy of the Material. 8.7. All Material is provided ‘as is’ without warranty or condition of any kind including all implied warranties or conditions of satisfactoriness, fitness for a particular purpose, title and non-infringement. 8.8. You use the Material and the Website at Your own risk. 8.9. Neither Us nor any Staff will be liable to You or any other party for any losses or damages whatsoever or howsoever arising in connection with the Material or the Website, whether under contract or as a result of any misrepresentation, misstatement or tortious act or omission, including negligence. 8.10. Our and the Staff’s liability to You for any loss or damage, including any losses, damages, costs or expenses whatsoever or howsoever arising in connection with the use of the Material or Website, whether under the Rules or other Rules or as a result of any misrepresentation, misstatement or tortious act or omission, including negligence, is limited to damages of an amount equal to that received by Us from You for a year’s Membership. 9. INTELLECTUAL PROPERTY 9.1. We own and retain all rights, title, interest and IP Rights in relation to the Material. 9.2. Except in connection with the ownership or management of a yacht(s) which You own directly or indirectly or You manage, You must not reproduce, modify, translate or create derivative works of any Material. 9.3. Without exception, You may not sell, license, sublicense, rent, lease, distribute, copy, publicly display or publish any Material. 10. RELATIONSHIP 10.1. We only provide a platform for information and self-help. 10.2. Material is provided for Your private use, does not constitute legal and/or financial advice and should not be relied upon as such. 10.3. We are not a regulated or unregulated law firm. Communications between You and Us or Staff will not be protected by legal professional privilege and may be disclosable to third parties. 10.4. No communications between You and Us or Staff constitute legal advice or can be relied on as such. 10.5. Use by You of the Website or Material does not establish a duty of care (either in tort or in contract) between You and Us or Staff, or create a lawyer-client relationship between You and Us or Staff. 10.6. Names of third parties are published on the Website or in Material, or provided to Members, for information purposes only. We do not endorse or recommend any third party nor do We make any warranty as to the qualifications or competency of any third party. 10.7. You agree that no joint venture, partnership, employment, or agency relationship exists between You and Us as a result of the Rules or Your use of the Website or the Material. 11. SEVERANCE 11.1. If any part of the Rules is determined to be invalid or unenforceable under any applicable law, then the invalid or unenforceable provision will be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision will be deemed deleted. Following such modification or deletion, the remainder of the Rules will continue in effect. 12. REVISIONS 12.1. We may revise the Rules from time to time, and will always post the most current version on the Website. By continuing to use or access the Website or Material, You agree to be bound by the most recent revision of the Rules. 13. ENTIRE AGREEMENT 13.1. Unless otherwise specified, the Rules constitutes the entire Rules between You and Us with respect to the matters covered by the Rules, and extinguishes all previous Ruless, arrangements, representations and understandings between You and Us, whether written or oral, relating such matters. 14. ASSIGNMENT 14.1. You must not assign or otherwise transfer any right granted under the Rules. We can freely assign Our rights under the Rules. 15. WAIVER 15.1. A failure or delay by Us to exercise any right or remedy provided under the Rules or by law will not constitute a waiver of that or any other right or remedy, nor will it prevent or restrict any further exercise of that or any other right or remedy. 16. THIRD PARTIES 16.1. A person who is not a party to the Rules will not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Rules. 17. LAW & JURISDICTION 17.1. The Rules and any dispute or claim arising out of or in connection with it or its subject matter or formation will be governed by and construed in accordance with English law. 17.2. The courts of England and Wales will have non-exclusive jurisdiction to settle any dispute or claim arising out of or in connection with the Rules or its subject matter or formation. Contact Us These Rules from an agreement between the Club on the one hand, and all Associates, Members and Governors and anyone using this website on the other. They establish a fair and balanced framework which governs respective rights and responsibilities. You’re bound by the Rules, so please take a moment to read them thoroughly. Please contact us if there’s anything you’d like clarified. 1. DEFINITIONS 1.1. In the Rules the following words have the following meanings: 1.1.2. IP Rights: any and all intellectual property rights, whether registered or unregistered, including but not limited to any patents, trademarks, domain names, URLs, design rights, copyright, software rights, database rights, rights in and to business names, product names and logos, processes, trade secrets, confidential information and any similar rights in any jurisdiction. 1.1.3. Link(s): link(s), provided in the Website, to third party resources and businesses; 1.1.4. Material: information, articles, guides, documents and clauses, provided by Us, whether via the Website or otherwise; 1.1.5. Membership: a paid subscription granting You access to certain Material; 1.1.6. Our: belonging to, or emanating from, Us; 1.1.7. Rules: this present document, known as the Rules; 1.1.8. Staff: any employee or representative of The Owners Club, including but not limited to the Our General Secretary; 1.1.9. We, Us: The Owners Club; 1.1.10. Website: the website theownersclub.org, and all pages, parts and elements thereof; 1.1.11. You: You, whether Associate, Member or Governor of The Owners Club, or user of the Website, as the case may be, and Your employer or principal where you act on behalf of one; 1.1.12. Your: of or from You. 2. APPLICATION 2.1. For good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, You agree to be bound by all of the Rules. 2.2. By using the Website, or viewing, downloading, using, sending, storing or receiving, any Material, You agree to be bound by all of the Rules, as well as Our privacy policy . 2.3. You are responsible for ensuring that all persons who access the Website through Your internet connection are aware of all of the Rules and that they comply with them. 3. MEMBERSHIP 3.1. Memberships are for one year, payable monthly. 3.2. A Membership entitles You, for one year, subject to monthly Membership fee instalments having been paid to date, to access those parts of the Website which We may from time to time restrict access to those only with Membership, and to access and download certain Material. 3.3. On each anniversary of You joining Us, We will automatically renew Membership unless You have notified Us that You want to cancel Membership by emailing us at gensec@theownersclub.org. 3.4. We may store and when possible update Your payment method on file. It is Your responsibility to maintain current credit card information on file with Us. 3.5. We reserve the right to change Membership fees from time to time. 3.6. From time to time, we may also offer different Membership terms and benefits. 3.7. Membership fees are non-refundable. 3.8. You authorise Us, to collect, without notice, Membership fees using any valid payment source We have on record for You. 3.9. If You fail to provide a payment to Us in full and on time, or We are unable to obtain payment using Your designated payment, We may deem such a failure as notice of cancellation and cancel Membership immediately. 3.10 We may cancel Membership at any time where We consider that You are in breach of any part of the Rules. 3.11. You are responsible for ensuring all contact details You provide Us with are correct and up to date. 3.12. If You choose, or You are provided with, a user identification code, password or any other piece of information as part of Our security procedures, You must treat such information as confidential, and You must not disclose it to any third party. 3.13. We have the right to disable any user identification code or password, whether chosen by You or allocated by Us, at any time, if in Our reasonable opinion You have failed to comply with any of the provisions of these terms of use. 3.14. If You know or suspect that anyone other than You knows Your user identification code or password, You must notify Us promptly at gensec@theownersclub.org. 4. WEBSITE 4.1. You are responsible for making all arrangements necessary for You to have access to the Website. 4.2. You will not: 4.2.1. Use the Website for any purpose that is unlawful or prohibited by the Rules; 4.2.2. Use the Website in any manner which could damage, disable, overburden or impair the Website, or interfere with any other party’s use and enjoyment of the Website; or 4.2.3. Obtain or attempt to obtain any Material through any means not intentionally provided for on the Website. 4.3. We will use reasonable efforts to keep the Website available to You, but if necessary, We may suspend access to the Website, or close it indefinitely. We will not be liable if for any reason the Website is unavailable at any time or for any period. 4.4. The Website may include information and materials uploaded by other users of the Website, including to bulletin boards and chat rooms. Such information and materials have not been verified or approved by Us. The views expressed by other users of the Website do not represent Our views or values. 5. VIRUSES 5.1. We do not guarantee that the Website will be secure or free from bugs or viruses. 5.2. You are responsible for configuring Your information technology, computer programmes and platform to access the Website. You should use Your own virus protection software. 5.3. You must not: 5.3.1. Misuse the Website by introducing viruses, trojans, worms, logic bombs or other material that is malicious or technologically harmful. 5.3.2. Gain unauthorised access to the Website, the server on which the Website is stored or any server, computer or database connected to the Website. 5.3.3. Attack the Website via a denial-of-service attack or a distributed denial-of service attack. 6. UPLOADING 6.1. Any content You upload to the Website will be considered non-confidential and non-proprietary. You retain all of Your ownership rights in Your content, but You grant Us a licence to use, store and copy that content and to distribute and make it available to third parties. 6.2. We have the right to disclose Your identity to any third party who is claiming that any content posted or uploaded by You to the Website constitutes a violation of their intellectual property rights, or of their right to privacy. 6.3. You are solely responsible for securing and backing up Your content. 6.4. When You upload or post content to the Website, You grant Us the following rights to use that content: 6.4.1. A worldwide, non-exclusive, royalty-free, transferable licence to use, reproduce, distribute, prepare derivative works of, display, and perform that user-generated content in connection with the service provided by the Website and across different media, including to promote the site or the service, forever; and 6.4.2. A worldwide, non-exclusive, royalty-free, transferable licence for other users, partners or advertisers to use the content for their purposes, forever. 7. LINKS 7.1. Links are only provided for Your convenience and to help You identify and locate other resources that may be of interest to You. 7.2. We do not control, endorse or monitor the contents of any sites subject to a Link, including, without limitation, any further link contained in a site referenced by a Link, and any changes or updates to site referenced by a Link. 7.3. If You use any service provided on a site to which a Link refers: 7.3.1. We will not be responsible for any act or omission of any third party, including such third party’s access to or use of Your data; and 7.3.2. We do not warrant or support any product or service provided by the third party. 7.4. You may link to the Website home page, provided You do so in a way that is fair and legal and does not damage Our reputation or take advantage of it. 7.5. You must not establish a link in such a way as to suggest any form of association, approval or endorsement on Our part where none exists. 7.6. You must not establish a link to the Website in any website that is not owned by You. 7.7. Our site must not be framed on any other site, nor may You create a link to any part of the Website other than the home page. 7.8. We reserve the right to withdraw linking permission without notice. 8. MATERIAL 8.1. We do not guarantee that Material is correct, up-to-date, or suitable for particular persons or situations. 8.2. The Material may include inaccuracies or typographical errors. 8.3. From time to time, changes may be made to the Material, with or without You being notified. 8.4. Material must not be relied upon for legal, tax or financial decisions and You should consult an appropriate professional for specific advice tailored to Your situation. 8.5. Any templates within the Material are for use only as a starting point for the preparation of legal documents. They must be adapted by You to meet Your individual requirements. You should always take legal advice for Your specific situation. 8.6. We make no representations about the suitability, reliability, availability, timeliness, and accuracy of the Material. 8.7. All Material is provided ‘as is’ without warranty or condition of any kind including all implied warranties or conditions of satisfactoriness, fitness for a particular purpose, title and non-infringement. 8.8. You use the Material and the Website at Your own risk. 8.9. Neither Us nor any Staff will be liable to You or any other party for any losses or damages whatsoever or howsoever arising in connection with the Material or the Website, whether under contract or as a result of any misrepresentation, misstatement or tortious act or omission, including negligence. 8.10. Our and the Staff’s liability to You for any loss or damage, including any losses, damages, costs or expenses whatsoever or howsoever arising in connection with the use of the Material or Website, whether under the Rules or other Rules or as a result of any misrepresentation, misstatement or tortious act or omission, including negligence, is limited to damages of an amount equal to that received by Us from You for a year’s Membership. 9. INTELLECTUAL PROPERTY 9.1. We own and retain all rights, title, interest and IP Rights in relation to the Material. 9.2. Except in connection with the ownership or management of a yacht(s) which You own directly or indirectly or You manage, You must not reproduce, modify, translate or create derivative works of any Material. 9.3. Without exception, You may not sell, license, sublicense, rent, lease, distribute, copy, publicly display or publish any Material. 10. RELATIONSHIP 10.1. We only provide a platform for information and self-help. 10.2. Material is provided for Your private use, does not constitute legal and/or financial advice and should not be relied upon as such. 10.3. We are not a regulated or unregulated law firm. Communications between You and Us or Staff will not be protected by legal professional privilege and may be disclosable to third parties. 10.4. No communications between You and Us or Staff constitute legal advice or can be relied on as such. 10.5. Use by You of the Website or Material does not establish a duty of care (either in tort or in contract) between You and Us or Staff, or create a lawyer-client relationship between You and Us or Staff. 10.6. Names of third parties are published on the Website or in Material, or provided to Members, for information purposes only. We do not endorse or recommend any third party nor do We make any warranty as to the qualifications or competency of any third party. 10.7. You agree that no joint venture, partnership, employment, or agency relationship exists between You and Us as a result of the Rules or Your use of the Website or the Material. 11. SEVERANCE 11.1. If any part of the Rules is determined to be invalid or unenforceable under any applicable law, then the invalid or unenforceable provision will be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision will be deemed deleted. Following such modification or deletion, the remainder of the Rules will continue in effect. 12. REVISIONS 12.1. We may revise the Rules from time to time, and will always post the most current version on the Website. By continuing to use or access the Website or Material, You agree to be bound by the most recent revision of the Rules. 13. ENTIRE AGREEMENT 13.1. Unless otherwise specified, the Rules constitutes the entire Rules between You and Us with respect to the matters covered by the Rules, and extinguishes all previous Ruless, arrangements, representations and understandings between You and Us, whether written or oral, relating such matters. 14. ASSIGNMENT 14.1. You must not assign or otherwise transfer any right granted under the Rules. We can freely assign Our rights under the Rules. 15. WAIVER 15.1. A failure or delay by Us to exercise any right or remedy provided under the Rules or by law will not constitute a waiver of that or any other right or remedy, nor will it prevent or restrict any further exercise of that or any other right or remedy. 16. THIRD PARTIES 16.1. A person who is not a party to the Rules will not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Rules. 17. LAW & JURISDICTION 17.1. The Rules and any dispute or claim arising out of or in connection with it or its subject matter or formation will be governed by and construed in accordance with English law. 17.2. The courts of England and Wales will have non-exclusive jurisdiction to settle any dispute or claim arising out of or in connection with the Rules or its subject matter or formation. Contact Us

Many of our Members will already be familiar with the reasoning behind corporate ownership and the use of trusts. If that’s you, then feel free to skip to the next step of building your team. Too many buyers, however, still purchase in their own names. As well as raising privacy concerns, legal owners can be held liable for accidents and regulatory non-compliance. Corporate services aren’t cheap, but it’s a sensible choice when building and owning a large yacht. Home Handbook Building / / A Firm Foundation 10 May 2023 Last revised minutes 5 Reading time Many of our Members will already be familiar with the reasoning behind corporate ownership and the use of trusts. If that’s you, then feel free to skip to the next step of building your team . Too many buyers, however, still purchase in their own names. As well as raising privacy concerns, legal owners can be held liable for accidents and regulatory non-compliance. Corporate services aren’t cheap, but it’s a sensible choice when building and owning a large yacht. minutes 5 Reading time 10 May 2023 Last revised Many of our Members will already be familiar with the reasoning behind corporate ownership and the use of trusts. If that’s you, then feel free to skip to the next step of building your team . Too many buyers, however, still purchase in their own names. As well as raising privacy concerns, legal owners can be held liable for accidents and regulatory non-compliance. Corporate services aren’t cheap, but it’s a sensible choice when building and owning a large yacht. Companies have a seperate legal personality, which allows companies to buy and sell goods and services like people. Trusts are arrangements where property is held by a trustee for the benefit of a beneficiary, sometimes with the same person as the settlor and beneficiary. Companies and trusts can be used to protect assets, reduce tax exposure, and shield personal wealth. Yachts can be owned through companies to ring-fence liability and protect other assets of the owner. Yachts can still be arrested in cases of accidents, pollution allegations, or unpaid debts. Releasing a yacht release from arrest requires payment of the claim or providing acceptable security, often requiring a personal guarantee from the beneficial owner. Lifting the corporate veil may expose individuals involved in fraudulent or tax evasion. The use of nominees can help to protect the identity of real directors and shareholders. Privacy is not guaranteed, as international treaties and conventions may override privacy laws, and trusts aren't always recognized. Offshore jurisdictions offer tax-efficient and legal ways for multinational companies and yacht owners, but careful consideration of jurisdiction is essential for reputation, integrity, costs, rule of law, political stability, and practicalities of winding-up corporate structures. Lifting the corporate veil may expose individuals involved in fraudulent or tax evasion. The use of nominees can help to protect the identity of real directors and shareholders. Privacy is not guaranteed, as international treaties and conventions may override privacy laws, and trusts aren't always recognized. Offshore jurisdictions offer tax-efficient and legal ways for multinational companies and yacht owners, but careful consideration of jurisdiction is essential for reputation, integrity, costs, rule of law, political stability, and practicalities of winding-up corporate structures. Companies have a seperate legal personality, which allows companies to buy and sell goods and services like people. Trusts are arrangements where property is held by a trustee for the benefit of a beneficiary, sometimes with the same person as the settlor and beneficiary. Companies and trusts can be used to protect assets, reduce tax exposure, and shield personal wealth. Yachts can be owned through companies to ring-fence liability and protect other assets of the owner. Yachts can still be arrested in cases of accidents, pollution allegations, or unpaid debts. Releasing a yacht release from arrest requires payment of the claim or providing acceptable security, often requiring a personal guarantee from the beneficial owner. Companies are said by lawyers to have their own ‘legal personality’. This colourful phrase just means that they are able to buy and sell goods and services in just the same way as a human being. Although corporations were developed as a means to allow entrepreneurs to raise money and conduct business without risking their personal wealth, companies can also be used for non-commercial purposes – as vehicles for asset ownership. TRUSTS Trusts are a rather different concept. They have no such personality. They are simply an arrangement whereby property is handed over by one party (the ‘settlor’) to another (the ‘trustee’) for the benefit of another (the ‘beneficiary’), on the basis that the property will be held and used as the trustee wishes. The settlor and beneficiary can be the same person. Although legal title is actually transferred from the settlor to the trustee, the beneficiary’s rights are recognisable and enforceable by the courts. As with companies, the use of trusts has come along way since their invention: they were first used to protect the property of medieval knights while away on crusade. BENEFITS Now and then, yachts are involved in accidents. Liability could easily exceed the value of the yacht, and, should the owner be held liable, his or her other assets are at risk. More sensible, then, to ring-fence any such source of liability by owning the yacht through a company. Companies and trusts can also be used, quite lawfully, to reduce an individual’s apparent wealth and personal tax exposure, and to protect assets from creditors where the beneficial owner is asked to provide personal guarantees in respect of the financing of his or her commercial activities. With very limited exceptions, yachts must, by law, be registered somewhere. In some cases, including during the build stage. Shipping registers being open to inspection by the public, details of a yacht’s owner are readily available. Most owners just don’t like the idea of journalists – or perhaps even former spouses – knowing what they own. Although the identity of company directors and shareholders is often a matter of public record, many jurisdictions allow directorships and shares to be held in the name of nominees. LIMITATIONS No amount of corporate structing can prevent the arrest of the yacht itself. Where this happens, the yacht is legally prevented from leaving her mooring. Typically, police or customs officers present the yacht with the court papers – this is the process which used to involve the nailing of a writ to the mast. Yachts are often arrested following a collision, an allegation of pollution, or where a good or service has been provided to the yacht without the provider (including crew) having been paid. There is no need for judgment to have been given and there may be little or no warning before the yacht is arrested – potentially leaving the owner in an awkward and embarrassing position in the middle of a busy charter season. The only way to release the yacht from arrest is either to pay the claim or to provide security. Such security may only be acceptable if provided or supported by a large bank. In turn, the bank will require a personal guarantee from the yacht’s beneficial owner. On occasion it may be possible to look behind the company at the individuals involved. This is known as lifting the corporate veil. The laws of certain jurisdictions, for example, state that where it appears that, in the course of winding-up a bankrupt company, transactions have been carried out with the intent to defraud creditors, a court may declare the individuals involved liable. Criminal sanctions can also apply. Creditors here only includes those owed money at the time the transfer was made, excluding future creditors. The burden of proving the necessary intent lies with the creditors. The same principle applies where it looks as if a company was set up to frustrate a court order to freeze assets. The use of nominees only prevents the true identity of directors and shareholders being made available to the public. It is not normally possible to offload liability onto the nominees, and there is likely to be a clause in the agreement to set up the company, obliging the actual directors and shareholders to indemnify the nominees. Privacy cannot be entirely guaranteed in any event. Not unreasonably, international treaties on the exchange of information relating to criminal activities, including tax evasion, can allow require even the strongest privacy laws to be brushed aside. Further, although trusts are usually recognised in common law jurisdictions, and some countries are party to an international convention on the recognition of trusts, known as the Hague Trust Convention, trusts aren’t always recognised. One final drawback of buying through a company is that the laws which automatically protect consumers only applies to people - not to companies. Such laws are of limited value where a bespoke yacht is being built, but consumers will have ambiguous build contract provisions interpreted in their favour. CHOICE OF JURISDICTION Offshore jurisdictions still have a reputation as being sunny places for shady people. In fact, virtually all the world’s leading multinationals use offshore companies and trusts to undertake business in a private, tax-efficient yet entirely legal way. ‘Offshore’ simply means a jurisdiction other the one someone is already resident or domiciled. They certainly don’t need to be far-flung islands – although many are as it can form a lucrative boost to otherwise tourist-dependent economies. In fact, a good example of an offshore centre is the United Kingdom – which was becoming increasingly popular long before Brexit. For yacht owners, the principal advantage of using a respectable, well-known offshore jurisdiction is that there is rarely the need to reinvent the wheel: they are geared up to provide yacht owning structures. As these activities often provide a sizeable proportion of foreign income, their governments make it a priority to make matters simple for those looking for this type of service. It is important to choose the jurisdiction(s) with care, however. No two are the same. There are bad apples in the barrel, especially with regards the integrity of local practitioners. With companies, but more particularly with trusts – where legal title is transferred to a local trustee who may have discretionary powers – there exists opportunities to extract more from their clients than had been expected. Other factors to consider include initial and ongoing costs (including local taxes), international reputation, and the strength of their rule of law – in other words how tough their courts are. Political stability is another important factor, as is the time zone, the exchange controls, and any escape provisions – which allow companies to change jurisdictions while maintaining their legal personality and trusts to be transferred without needing to be rewritten. Finally, the most overlooked aspect is the ease, timeframe and expense of winding-up a corporate structure when it’s no longer needed. Working with a local branch of an international legal or accounting group may provide reassurance, but on the other hand one may end up being steered towards just those places where they happen to have an office. Ideally, guidance in the earliest stages should be sought from an independent, trusted source, capable of providing an impartial, global overview. Reach out to our General Secretary if you need a steer. With the correct ownership structure in place, it's time to build your team . Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Build Your Team Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Build Your Team

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 72 m Length Thompson Yachts Builder 1996 Build year 1020 Gross tonnage Cayman Islands Registry Particulars Instance

Other standard forms are in use, but the poorly drafted and incomplete MYBA Memorandum of Agreement (MOA) remains the standard agreement for the sale and purchase of yachts, used by brokers large and small, whether a member of that organisation or not. Before considering what needs to be added, let’s look at what’s there at the outset. Home Handbook Buying / / MYBA MOA Clause by Clause 9 December 2022 Last revised minutes 11 Reading time Other standard forms are in use, but the poorly drafted and incomplete MYBA Memorandum of Agreement (MOA) remains the standard agreement for the sale and purchase of yachts, used by brokers large and small, whether a member of that organisation or not. Before considering what needs to be added, let’s look at what’s there at the outset. minutes 11 Reading time 9 December 2022 Last revised Other standard forms are in use, but the poorly drafted and incomplete MYBA Memorandum of Agreement (MOA) remains the standard agreement for the sale and purchase of yachts, used by brokers large and small, whether a member of that organisation or not. Before considering what needs to be added, let’s look at what’s there at the outset. The article focuses on the MYBA Memorandum of Agreement (MOA) November 2008 edition, which is the most commonly used contract in large yacht sales and purchases. The MOA should not be accepted at face value, and it is crucial to amend and supplement it before any transaction takes place. Clause 14 allows the seller to negotiate with other potential buyers as long as no commitments are made, even after signing the MOA. Clause 15 removes the statutory buyer protection provided by the Sale of Goods Act 1979 (as amended), and it is important to clarify the meaning of "warranty" in this context. The list of things that the vessel should be "free and clear of" in Clause 15 should be expanded to avoid ambiguity and potential disputes. Clause 16 highlights the importance of maintaining an inventory of the vessel's items, especially for larger vessels, and clarifies the consequences of rejecting the inventory. Clause 17 emphasizes the mandatory nature of making the vessel available for sea trials and surveys, and precautions should be taken to prevent conflicting charter arrangements. Clause 18 requires the seller to provide specific documents known as "Addendum One" that prove compliance with regulations and establish the vessel's value and validity of the sale. The list of things that the vessel should be "free and clear of" in Clause 15 should be expanded to avoid ambiguity and potential disputes. Clause 16 highlights the importance of maintaining an inventory of the vessel's items, especially for larger vessels, and clarifies the consequences of rejecting the inventory. Clause 17 emphasizes the mandatory nature of making the vessel available for sea trials and surveys, and precautions should be taken to prevent conflicting charter arrangements. Clause 18 requires the seller to provide specific documents known as "Addendum One" that prove compliance with regulations and establish the vessel's value and validity of the sale. The article focuses on the MYBA Memorandum of Agreement (MOA) November 2008 edition, which is the most commonly used contract in large yacht sales and purchases. The MOA should not be accepted at face value, and it is crucial to amend and supplement it before any transaction takes place. Clause 14 allows the seller to negotiate with other potential buyers as long as no commitments are made, even after signing the MOA. Clause 15 removes the statutory buyer protection provided by the Sale of Goods Act 1979 (as amended), and it is important to clarify the meaning of "warranty" in this context. This article considers the MYBA MOA, clause by clause. We’re looking at the November 2008 edition, because this is most commonly used. It’s available online. The February 2005 edition is still occasionally used and a 2021 electronic edition, featuring a few nips and tucks, has been published but is not yet in widespread use. The key takeaway is that, despite its official appearance, the MOA must not be accepted at face value, and no transaction should ever take place without the MOA being amended and supplemented. The MOA clauses themselves are in an illogical sequence, but are looked at in numerical order nevertheless. CLAUSES 1-13 The first two pages contain Clauses 1 to 13 in the form of boxes for the relevant details. A format commonly used in the commercial shipping sector. The attention to detail is immediately obvious: assuming “G.R.T.” is meant to mean Gross Register(ed) Tonnage, this is a term which was consigned to history long ago by the International Convention on Tonnage Measurement of Ships 1969. Clause 1 refers to "banking days" without reference to a specific location. And it may be wise to not to leave Clause 5 blank in the context of Clause 25 and Clause 38 : buyers may not want to pay a pay a deposit to the seller’s statutorily unregulated broker. CLAUSE 14 While this clause commits seller to the sale process, the seller isn’t prevented from negotiating with other would-be buyers – as long as no commitments are made with any such third party. Having signed the MOA, if the buyer comes under pressure from a broker to improve on the deal – as other would-be buyers are circling – this can be ignored. CLAUSE 15 While, in law, the term “warranty” has a specific meaning, it appears under this context – confusingly – that it simply means “represents”. This clause is important as the ordinary statutory buyer protection provided by the Sale of Goods Act 1979 (as amended) is normally removed by Clause 34 . Compared to the sale agreements for trading ships, the list of things which has to be “free and clear of” is a bit simplistic and limited – and should be expanded to include charters, mortgages, writs and port state and other administrative detentions rather than leave scope for argument over what “encumbrance” encompasses in the context of the MOA. The seller needs to ensure that anything of this kind is affecting the vessel: it’s not good enough to expect that the buyer will come across details of these in the public domain. Releasing the vessel from such encumbrance is a prerequisite to the sale completing as set out in Clause 30 . Where any such only comes to light after completion, the seller obliged to indemnify the buyer – which is of no use where the seller’s a company the only asset of which was the vessel just sold. Hence the need for a guarantee from a bank or the seller’s beneficial owner. Under Clause 15, the seller also represents that it(or he/she) is the legal registered owner of the vessel, with title to and the right to sell the vessel – and this will remain the case right up to the point of delivery to the buyer. This is the case anyway under section 12(1) of the Sale of Goods Act 1979 (as amended) in spite of Clause 34 which only excludes statutory protection “in relation to the VESSEL, fault or errors in her description or her quality or her fitness, for any particular purpose”. CLAUSE 16 The larger the vessel, the greater the inventory, and the longer it’s going to take to compile or update and check. This should be produced or updated as soon as the vessel is placed on the market, having regard to Clause 21 , as the buyer’s surveyor will need to check the items off against it as part of the pre-purchase survey. Once agreed on, the inventory forms part of the sale agreement. Clause 16 is silent as to consequences of rejection of the inventory by the buyer, but it seems likely that the agreement itself will be unaffected – and it’s still open for the buyer to reject under Clause 26 . Regarding significant works of art, sculptures, equipment, tenders and toys, it’s helpful to obtain a clear understanding of what’s staying on board (and, as importantly, what's not) before the MOA is signed. CLAUSE 17 While self-explanatory, this clause makes it clear that making the vessel available for a Clause 26 sea trial and Clause 27 survey is mandatory, not a nice-to-have, and the seller must take care that a charter broker does not arrange for a charter to take place which might prevent this. CLAUSE 18 While this clause simply sets out that the “Addendum One” documents must be provided by the seller, the MOA doesn’t come with Addendum One – or any addenda for that matter. The documents are so much more than mere paperwork: they are evidence that the vessel complies with certain regulations. Non-compliance may require major works to be carried out. Certain documents will be needed for re-registration and for proving title – without which the vessel may be worth less or even worthless. The sale itself could be invalidated where the correct corporate authorities and powers of attorney aren’t in place. And such documents may need to be authenticated in a particular way(s) in order to be accepted by the vessel’s new or existing flag state. CLAUSE 19 Unusually for the MOA, this clause is self-explanatory. Keep in mind that “berthing fees and crew’s wages” are implicitly not an exhaustive list. CLAUSE 20 This clause makes clear that where the seller fails to deliver the vessel (that is, in the legal sense of the word ‘deliver’) per Clause 21 or documentation per Clause 18 then all bets are off and the agreement is cancelled. However, as will be seen with regard to Clause 30 , all that’s needed with broad compliance with Addendum One - there’s no mention of the documentation needing to be authenticated as the buyer may require – or even to be effective at all. CLAUSE 21 The vessel must be delivered in the condition it was in at the time of the Clause 9 / Clause 26 sea trial and Clause 9 / Clause 27 condition survey, making this a sale of the vessel on an ‘as was’ basis – not ‘as-is’. ‘Delivery’ in this clause means the transfer of physical possession, rather than the vessel being moved. The vessel may have to be delivered elsewhere than at its usual mooring – usually for tax purposes – after which it’ll head straight back to its berth. While the financial consequences for the buyer of having the vessel delivered in the wrong place could lead to an unexpected Value Added Tax liability of up to 25% of the sale price, it seems that delivering elsewhere than that stated in Clause 11 will only entitle the buyer to claim damages. By contrast, the delivery date is a contractual condition breach of which allows the buyer to cancel the agreement: this is clear from the use of the phrase “time being of the essence” in Clause 12 . How this element of Clause 21 is affected by Clause 35 - which deals with force majeure events - isn't clear. By listing in Clause 21 various specific items which are to be included in the sale, those items not listed are, arguably, excluded. It would have been better simply to state “with everything belonging to the VESSEL on board and on shore” or some such – at least the scope for disagreement would have been reduced. CLAUSE 22 As risk of loss of, or damage to, the vessel passes under this clause immediately upon delivery, the buyer must make sure that suitable cover has been obtained well in advance. CLAUSE 23 This may seem like an obvious provision, but keep in mind that where the seller is a company which is in liquidation it may require authorisation to sell the yacht. CLAUSE 24 The companion to Clause 14 this clause commits the buyer to the sale process. The buyer may only exit from the deal - should the buyer have a change of heart - will be as the agreement allows. CLAUSE 25 While the “four banking days” clock only begins to tick once the agreement has been signed, as with Clause 1 , the term “banking days” isn’t defined in terms of any particular country’s banks. And that’s a problem as a failure to pay is breach of contract, allowing the seller to terminate and sue for damages – which could be an amount equivalent to the unpaid deposit. It’s not the case that the deposit needs to be paid for the agreement to come into effect. It’s also unclear whether the date of signature is included or excluded in the four-day period. Buyers must be aware of, and take into account, the time taken for identity checks and anti-money laundering to be carried out. CLAUSE 26 One of the many ways in which the drafting of the MOA leaves much to be desired is Clauses 26 and 27 – which between presuppose that the vessel is in the water at the outset. Of course, large yachts can be out of the water for months at a time. No sensible owner would normally place his or her pride and joy on the market while she’s on the hard: often parts of the interior will have been covered-up or removed while works are ongoing, but if the sale is urgent there may be no choice. Where the vessel is out of the water, the necessary amendments will have to be detailed. Assuming the vessel is in the water when the MOA is agreed, then the seller must make her available for a sea trial of up to four hours. This does not mean that the seller is obliged to make all necessary arrangements. It’s unclear, for example, who would be responsible for ordering pilots if required. While this clause fails to mention this, the buyer would be well advised to arrange for a surveyor to attend to examine certain aspects of the vessel’s performance which can’t be tested out of the water. How easily the main engine(s) and gensets start, and how much smoke is emitted at various engine temperatures, for example, typically can’t be tested as the engine’s heat exchangers require the vessel to be in the water, and the engines should be tested under load. Following the sea trial, the buyer may then elect not to go ahead with the purchase – although it’s not clear whether the grounds for this are for any reason (i.e. the saloon cushions are the wrong colour or a similar trivial reason) or whether the reason must relate to the performance of the vessel during the sea trial. To be effective, the buyer must ensure that the rejection is: In writing; To the seller or broker; Within 24 hours of the sea trial; and Submitted as a formal notice in compliance with Clause 43 . CLAUSE 27 It should not be underestimated how difficult it can be to find at short notice a suitably qualified surveyor, appropriately insured, with availability, who the buyer can be reasonably confident will be thorough and independent. It may not be advisable to go along with the seller’s broker’s suggestion. Yard space and facilities may also be a premium – especially out of season. It is also usually be advisable for samples to taken of the engine’s lubricating oil for laboratory analysis. Elemental spectroscopy of the oil can reveal premature engine wear, while the presence of water might indicate a gasket or heat exchanger seal failure. Combined with testing for acidity a picture can be built of the seller’s crew’s approach to equipment maintenance. Differences in results for two identical engines can be an obvious cause for concern. It’s crucial to consider timescales for surveying and testing before dates are set in stone in the MOA. The object of the survey is only to discover defects which haven’t already been disclosed to the buyer in writing – although the buyer may wish to ascertain the nature and extent of disclosed defects. It’s not clear when the nature and extent of such defects is such that it could be considered that these defects haven’t actually been disclosed. While a “defect” is determined in Clause 27 to be a defect which “affect(s) the operational integrity of the VESSEL or her machinery or her systems or renders the VESSEL unseaworthy”. There’s no definition of “operational integrity” either in the MOA or in the law generally. Unseaworthiness is also not defined in the MOA. Broadly, as a matter of law, a vessel is unseaworthy when she is not reasonably fit in all respects to encounter the ordinary perils of the seas – but this still leaves plenty of scope for factual and legal argument. Where such an undisclosed defect is found by the surveyor, the buyer must choose one of the option given in (a) paragraph (a), bearing in mind that such notice must be given: In writing; To the seller or broker; Within seven days of the completion of the survey; and In conformity with Clause 43 . If the buyer elects for the seller to carry out remedial works, then it would be wise to set a realistic date for the completion of these, rather than just rely on the “without undue delay” provision. CLAUSE 28 This clause makes clear that the notice provisions in Clause 26 and Clause 27 must be complied with to the letter – failing which the vessel will have been accepted. CLAUSE 29 While it is hard to imagine circumstances where the vessel is damaged as a result of the captain complying with a request from the buyer during a sea trial, given the captains duty of care to the seller, it is conceivable that the buyer’s surveyor causes damage. This underlines the importance of checking that the surveyor carries suitable insurance. CLAUSE 30 Completion (more often known as ‘closing’) is the final stage of the sale and purchase process, during which payment of the balance is made, and the vessel and documents are delivered to the buyer. Subject to any Clause 27 notice or Clause 35 force majeure event, the Clause 12 completion date is the date on which the buyer must pay the balance. There is no mention of this also being the date upon which the seller must receive the funds, but it’s clearly in everyone’s interests for payment to be made as quickly as possible. The currency, bank details and payment method should be agreed in Addendum One and expressly made conditions of the agreement to be strictly adhered with. Payment is required as soon as the Addendum One documents have been tendered to the buyer – seemingly even if they are defective in terms of their effectiveness or authentication, as long as they comply with their descriptions set out in Addendum One. CLAUSE 31 This clause elaborates on Clause 25 . It’s odd that these two clauses aren’t drafted as a single clause for greater clarity. CLAUSE 32 This clause elaborates on Clause 23 . Again, it’s odd that these two clauses aren’t also drafted as a single clause for greater clarity. CLAUSE 33 While it used to be considered bad luck to change the name of a yacht, the MOA copies the now standard practice in the shipping industry to change name upon change of ownership. It’s as good to be aware of this clause, given that it is the default position. Given the amount of equipment on board bearing the yacht’s name, logo or monogram, the expense of compliance isn’t to be underestimated. An oil tanker’s name can be changed with a paintbrush: a modern yacht will almost certainly have a custom-made, illuminated name which must be installed and the immediate surrounding area filled and repainted as required. The standard seven days may be no way near long enough. That said, the seller is going to face an uphill task in proving what losses may have followed from any delay in remaining. CLAUSE 34 In the normal course of events, sections 13, 14 and 15A of the Sale of Goods Act 1979 (as amended) will apply to the sale and purchase of the vessel. Under these sections, goods sold must corresponded with the seller’s description of them, they must be of satisfactory quality, fit for purpose, etc. But parties are free, subject to certain statutory limitations, to agree to exclude such provisions. And this is what Clause 34 aims to do. It succeeds in this aim, albeit in respect of corporate buyers : individual buyers are ‘consumers’ meaning that these sections cannot be excluded. This clause does not affect the seller’s Clause 15 warranty. CLAUSE 35 This clause sets out what the parties are to do where certain external events beyond their control delay the sea trial, survey or closing. As the law aims to ensure that the parties carry through with the deal, force majeure clauses are interpreted restrictively and against the party seeking to rely on them. And even then, that party must then prove that it used reasonable endeavours to minimise the delay. CLAUSE 36 This is a standard so-called boilerplate clause, which are normally placed after all the commercial terms. But MYBA, it seems, likes to do things differently. CLAUSE 37 Though detailed, Clause 37 is self-explanatory and requires no further explanation. CLAUSE 38 While Clause 5 presupposes that the stakeholder will be a broker, the seller should think long and hard about whether it’s wise to place money at the disposal of a statutorily unregulated party which is acting for the buyer. It is increasingly common for funds to be placed with the buyer’s lawyer – which also alleviates the broker from the increasing bureaucracy associated with satisfying anti-money laundering rules. Even then, the choice of lawyer is important. CLAUSE 39 This otherwise self-explanatory clause only applies where the parties agree that the bottom should be painted with antifouling and anodes replaced. Notably, it makes no mention of more modern and environmentally-friendly antifouling wraps. Where there is significant fouling but the sacrificial anodes do not require replacing, there could be a cathodic grounding fault which the surveyor should investigate. The anodes are implicitly those on the hull, shafts and rudders – rather than those within the raw-water side of the engines’ cooling systems. CLAUSE 40 Arbitration is a way of setline disputes in private, which is no less effective than going through the public courts potentially in the media spotlight. Missing from the MOA is a specific reference to the arbitration being conducted in accordance with the London Maritime Arbitrators Association (LMAA) terms – which allow for different levels of procedural complexity according to the amount in issue. CLAUSE 41–44 These are standard boilerplate clauses, but the reference to the “telefax” is now obviously very outdated and needs amending. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Corporate Ownership Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Corporate Ownership

Unavailable at present Latest Position New Horizons Listing Email WhatsApp +44 7773 246 246 Central Agent 62 m Length Builder & Co Builder 2009 Build year 700 Gross tonnage Cayman Islands Registry Particulars Result

The automatic identification system (AIS) is a tracking system that establishes the positions of ships, and fixed and floating objects, in real time. Used as a navigational aid, it also lets the world see a yacht’s position - which isn’t always what we owners want. There are times when ‘going dark’ is allowed and times when it’s not. Home Handbook Managing / / Going Dark 28 November 2022 Last revised minutes 4 Reading time The automatic identification system (AIS) is a tracking system that establishes the positions of ships, and fixed and floating objects, in real time. Used as a navigational aid, it also lets the world see a yacht’s position - which isn’t always what we owners want. There are times when ‘going dark’ is allowed and times when it’s not. minutes 4 Reading time 28 November 2022 Last revised The automatic identification system (AIS) is a tracking system that establishes the positions of ships, and fixed and floating objects, in real time. Used as a navigational aid, it also lets the world see a yacht’s position - which isn’t always what we owners want. There are times when ‘going dark’ is allowed and times when it’s not. The Automatic Identification System (AIS) enhances safety and security by providing positional information and supplementing radar for traffic situation awareness. AIS is used in search and rescue operations, providing accurate information on the position of survival craft. It automates mandatory ship reporting to port authorities or vessel traffic service stations. Ships over 300 gross tonnage engaged in international voyages are required by SOLAS regulations to be fitted with Class A AIS equipment. Local regulations may be significantly more stringent. Yachts not subject to SOLAS requirements can carry Class B AIS devices. AIS systems consist of a small box with VHF transmitters, receivers, and a central processing unit, connected to various shipborne sensors and navigation systems. It transmits static information, dynamic information updated from ship sensors, and voyage-related information. AIS should not be solely relied upon for collision avoidance and does not replace radar target-tracking. It can be switched off under certain circumstances, but the master should report it to the competent authority and restart it when the source of danger has disappeared. Failure to operate AIS may lead to penalties by port state authorities and insurance underwriters may claim the vessel was unseaworthy in case of a collision without AIS. AIS systems consist of a small box with VHF transmitters, receivers, and a central processing unit, connected to various shipborne sensors and navigation systems. It transmits static information, dynamic information updated from ship sensors, and voyage-related information. AIS should not be solely relied upon for collision avoidance and does not replace radar target-tracking. It can be switched off under certain circumstances, but the master should report it to the competent authority and restart it when the source of danger has disappeared. Failure to operate AIS may lead to penalties by port state authorities and insurance underwriters may claim the vessel was unseaworthy in case of a collision without AIS. The Automatic Identification System (AIS) enhances safety and security by providing positional information and supplementing radar for traffic situation awareness. AIS is used in search and rescue operations, providing accurate information on the position of survival craft. It automates mandatory ship reporting to port authorities or vessel traffic service stations. Ships over 300 gross tonnage engaged in international voyages are required by SOLAS regulations to be fitted with Class A AIS equipment. Local regulations may be significantly more stringent. Yachts not subject to SOLAS requirements can carry Class B AIS devices. AIS enhances safety and security in various ways. By plotting positional information provided by nearby vessels, it supplements the picture produced by radar, so enhancing traffic situation awareness. Many of the problems common to radar, such as clutter, target swap as ships pass close by and target loss following a fast manoeuvre, do not affect AIS. AIS is also used in search and rescue operations. Search And Rescue operators, on land, at sea and in the air, get more accurate information, especially on the position of survival craft. Further, because AIS is used to exchange data ship-to-ship and with shore-based facilities, it is useful in automating mandatory ship reporting to port authorities or vessel traffic service (VTS) stations. LEGAL REQUIREMENT By virtue of Regulation 19 of Chapter V of the International Convention for the Safety of Life at Sea (SOLAS) 1974, as amended, all ships of 300 gross tonnage or more and engaged on international voyages must be fitted with Class A AIS equipment. In law, all yachts are ships – and it is irrelevant whether registered as a private or commercial vessel. Class B devices may be carried on yachts which are not subject to the SOLAS requirements. Certain national laws take this further. For example, US Federal law requires commercial vessels of just 65 feet and over to be fitted with a Class A AIS device. HOW IT WORKS The system is contained within a small box, containing one very high frequency (VHF) radio transmitter, various VHF receivers and a central processing unit. To this is attached antennae, and interfaces for heading, speed devices and other shipborne sensors, plus interfaces to radar, Automatic Radar Plotting Aids (ARPA), Electronic Chart System/Electronic Chart Display and Information System (ECS/ECDIS) and Integrated Navigation Systems (INS). There’s also a display and keyboard to input and retrieve data. The AIS can be connected either to an additional dedicated AIS display unit, possibly one with a large graphic display, or as an input to existing navigational system devices such as a radar display, ECS, ECDIS, or INS. INFORMATION SHARED The AIS information is transmitted continuously by a ship, and includes the following three types: Static information, which is entered into the AIS on installation and need only be changed if the ship changes its name, Maritime Mobile Service Identity (MMSI), location of the electronic position fixing system (EPFS) antenna, or undergoes a major conversion from one ship type to another; Dynamic information, which, apart from navigational status information, is automatically updated from the ship sensors connected to AIS; and Voyage-related information, some of which such as destination and estimated time of arrival (ETA) will need to be entered manually at the start of the voyage and kept up to date as necessary. INCOMPLETE PICTURE AIS doesn’t always give the complete picture, and – as with any navigational aid – should only be used by itself – especially for collision-avoidance. It doesn’t take the place of radar target-tracking. The officer of the watch (OOW) should always be aware that other ships, in particular smaller leisure craft, fishing boats and warships might not be fitted with AIS. The OOW should always be aware that AIS fitted on other ships as a mandatory carriage requirement might, under certain circumstances, be switched off on the master's professional judgement. SWITCHING OFF Details of yachts whose AIS is switched on maybe accessed by anyone, anywhere, simply by looking at MarineTraffic , VesselFinder or any of the other myriad of similar websites. Not all owners will be happy about this. According to the International Maritime Organisation’s Resolution A.1106(29) of 14 December 2015, entitled Revised Guidelines for The Onboard Operational Use of Shipborne Automatic Identification Systems (AIS): AIS should always be in operation when ships are underway or at anchor. If the master believes that the continual operation of AIS might compromise the safety or security of his/her ship or where security incidents are imminent, the AIS may be switched off. Unless it would further compromise the safety or security, if the ship is operating in a mandatory ship reporting system, the master should report this action and the reason for doing so to the competent authority. Actions of this nature should always be recorded in the ship's logbook together with the reason for doing so. The master should however restart the AIS as soon as the source of danger has disappeared. If the AIS is shut down, static data and voyage-related information remains stored. Restart is done by switching on the power to the AIS unit. Ship's own data will be transmitted after a two-minute initialization period. In ports AIS operation should be in accordance with port requirements. CONSEQUENCES Port state authorities will expect AIS to be operational, and may impose penalties for this not being the case – especially where there is a collision which AIS may have helped to avoid. Keep in mind, too, that non-compliance with more stringent local regulations will be punished . Even in international waters, where a yacht goes dark other than allowed by Resolution A.1106(29), while this may not be noticed by the flag state authority, if there’s a collision then insurance underwriters could claim that, without this important navigational aid working, the vessel was, in law, unseaworthy, and they are entitled to refuse payment. But going dark may not be intentional. Interference, weak radio signals and patchy satellite reception can all compromise AIS data exchange. Distinguishing intentional from unintentional signal drop-outs is difficult but not impossible. The frequency and regularity of drop-outs prior to a full blackout may be indicative. And the reason may not be malevolent. It is known, for example, that in certain parts of the world fishing vessels switch off AIS in order not to reveal productive catch areas to competitors. CONCLUSION Whether we, as owners, like it or not, AIS is governed by international convention – and it’s here to stay. If there are legitimate concerns then going dark may be permissible, but it’s as well to discuss this with the captain and insurance underwriter well in advance of a transit through waters in which it may be prudent or desirable. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about State Yachts Join the discussion over in the Club's group Questions or comments? 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As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. Home Handbook Employing / / Commission or Kickback? 2 November 2013 Last revised minutes 3 Reading time As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. minutes 3 Reading time 2 November 2013 Last revised As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. T he Bribery Act 2010 in th e UK is considered one of the toughest anti-bribery laws globally, with similar principles found in the US Foreign Corrupt Practices Act. The Act applies extraterritorially, meaning that a crime can be committed even if the transaction occurs outside of the UK. There are four key offences under the Act: bribing, receiving a bribe, bribing a foreign public official, and failing to prevent bribery. Bribing involves offering or promising a financial or other advantage in exchange for improper performance of a function or activity, while receiving a bribe includes requesting or accepting such an advantage. Local practices should be disregarded when determining improperness, unless they are part of the written local law. Hospitality can be considered bribery if it is disproportionately generous, especially in industries focused on luxury. The offence of failing to prevent bribery applies to all commercial organizations, including companies and partnerships operating in the UK. Bribery crimes committed outside the UK can be investigated and prosecuted if there is a "close connection" to the UK, such as being a UK passport holder or ordinarily resident. The Serious Fraud Office (SFO) in the UK handles corruption allegations involving UK nationals or incorporated bodies overseas, and there is international cooperation in investigating and prosecuting bribery and corruption. The United States' Foreign Corrupt Practices Act allows payments to foreign public officials to expedite their duties, even if it violates local laws. Civil actions can also be taken against individuals involved in bribery, and a criminal conviction serves as proof of civil liability. The offence of failing to prevent bribery applies to all commercial organizations, including companies and partnerships operating in the UK. Bribery crimes committed outside the UK can be investigated and prosecuted if there is a "close connection" to the UK, such as being a UK passport holder or ordinarily resident. The Serious Fraud Office (SFO) in the UK handles corruption allegations involving UK nationals or incorporated bodies overseas, and there is international cooperation in investigating and prosecuting bribery and corruption. The United States' Foreign Corrupt Practices Act allows payments to foreign public officials to expedite their duties, even if it violates local laws. Civil actions can also be taken against individuals involved in bribery, and a criminal conviction serves as proof of civil liability. T he Bribery Act 2010 in th e UK is considered one of the toughest anti-bribery laws globally, with similar principles found in the US Foreign Corrupt Practices Act. The Act applies extraterritorially, meaning that a crime can be committed even if the transaction occurs outside of the UK. There are four key offences under the Act: bribing, receiving a bribe, bribing a foreign public official, and failing to prevent bribery. Bribing involves offering or promising a financial or other advantage in exchange for improper performance of a function or activity, while receiving a bribe includes requesting or accepting such an advantage. Local practices should be disregarded when determining improperness, unless they are part of the written local law. Hospitality can be considered bribery if it is disproportionately generous, especially in industries focused on luxury. In the United Kingdom, giving incentives and rewards may be a criminal offence – or not – according to whether it falls foul of the Bribery Act 2010 . This law is widely recognised as the toughest of its kind in the world, but its principles are much the same in the rest of the world, including the United States’ Foreign Corrupt Practices Act. Significantly, under the Bribery Act, a crime may be committed even if the transaction takes place outside of the UK. This was already the effect of a small and little-known piece of anti-terror legislation introduced in 2001, but the globe-trotting aspects of the 2010 Act are clearer and more coherent. COMMISSIONS To be clear, a lot of commission arrangements are perfectly legal – but it’s easy to overstep the mark, and there can be a false assumption that formality means legality. The penalties for getting it wrong include an unusually long prison sentence and unlimited fines. OFFENCES There are four key offences: Bribing Receiving a bribe Bribing a foreign public official, and Failing to prevent bribery Bribing occurs when a person offers, gives, or promises to give, a financial or other advantage to someone else in exchange for ‘improperly’ performing a function or activity. Receiving a bribe is defined as requesting, accepting or agreeing to accept such an advantage. An activity will be ‘improperly’ performed when any expectation of good faith or impartiality has been breached, or when the function has been performed in a way not expected of a person in a position of trust. Helpful, this now clarifies what is expected when a commission is an overt element of any business model – even where this may lead to a reduced commission. GREASING PALMS So what about those instances where greasing palms to get things to happen is just the way things work? The Act states that local practises should be disregarded when deciding on improperness – unless they form part of the written local law. While the UK authorities are alive to the necessity of ‘facilitation payments’, official tolerance relates only to small payments, made by companies with the right bribery policies and procedures in place. HOSPITALITY Hospitality can constitute bribery if it is disproportionately generous. In an industry devoted to luxury, it can be easy for crewmembers to confuse the lifestyle of their wealthy employers with their own – and not think twice about receiving hospitality which, seen from afar, is completely over the top. PREVENTION The offence of failing to prevent bribery applies only to ‘commercial organisations’, but this includes any company or partnership carrying on any business in the UK. Conceivably, this could yacht owning companies managed from the UK. With regard to the first three offences, while crimes committed outside the UK (except on board UK-flagged vessels) are normally beyond the jurisdiction of the courts, this is not the case with bribery. Given its seriousness, it’s one of a unique group of crimes (along with terrorism and war crimes) that the authorities can and will investigate worldwide. All that’s needed is a ‘close connection’ with the UK – including just being a passport-holder or ordinarily resident. INVESTIGATION The UK’s Serious Fraud Office (SFO) acts as the focal point for any allegations of corruption by UK nationals or incorporated bodies overseas, while the City of London Police has an Overseas Anti-Corruption Unit with the specific function of supporting overseas corruption investigations undertaken by the SFO. The idea that prosecuting authorities have tentacles that can reach worldwide is not limited to the UK. As with many areas of the criminal law, most countries’ laws are broadly similar, and both European Union and United Nations conventions provide for international co-operation with regard to both the investigation and prosecution of bribery and corruption. UNITED STATES While the reach of law enforcers in the United States is equally global in nature, however, a slight difference can be seen in their approach, as the Foreign Corrupt Practices Act of 1977 allows payments to be made to foreign public officials to facilitate or expedite their performance of the duties they’re already bound to perform, even if this still violates local laws. So making a payment to an official to speed up a visa application, for example, would be acceptable. CIVIL ACTION In addition to the threat of prosecution, an owner may sue an employee or other agent for any loss – and, while a criminal conviction is not necessary for a civil action, it would be undeniable proof of civil liability. The owner may also be able to withdraw from the contract agreed to by the agent, whether or not he or she brings an action against the agent, and this option may be useful if, for example, the owner has managed to find a better deal elsewhere. CONCLUSION While it might seem that the authorities are coming down rather hard on corruption, it’s not because they are trying to spearhead some kind of moral crusade but simply because corruption distorts rational product and service choices, which can ultimately prevent the cream of the industry from rising to the top, distort markets and threaten economic growth. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Harassment Prevention Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Harassment Prevention

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Most large yachts are bought and sold on the basis of the MYBA MOA. While the mechanics of the sale process is dealt with in that document, there’s one glaring omission: what documents does the seller need to produce to prove ownership and liabilities? As mere paperwork, such matters are often only negotiated once the MOA has been agreed, leaving scope for an otherwise viable deal to falter. Consider what’s likely to be requested at the outset and prepare accordingly. Home Handbook Selling / / Preparing the Paperwork 29 January 2025 Last revised minutes 9 Reading time Most large yachts are bought and sold on the basis of the MYBA MOA . While the mechanics of the sale process is dealt with in that document, there’s one glaring omission: what documents does the seller need to produce to prove ownership and liabilities, and ensure a smooth transaction? As mere paperwork, such matters are often only negotiated once the MOA has been agreed, leaving scope for an otherwise viable deal to falter. Consider what’s likely to be requested at the outset and prepare accordingly. minutes 9 Reading time 29 January 2025 Last revised Most large yachts are bought and sold on the basis of the MYBA MOA . While the mechanics of the sale process is dealt with in that document, there’s one glaring omission: what documents does the seller need to produce to prove ownership and liabilities, and ensure a smooth transaction? As mere paperwork, such matters are often only negotiated once the MOA has been agreed, leaving scope for an otherwise viable deal to falter. Consider what’s likely to be requested at the outset and prepare accordingly. Clause 18 of the MOA requires "Addendum One" documents, but no such addendum is included. Essential documents are needed for re-registration and proving title, without which the vessel could lose value. Missing corporate authorities or powers of attorney could invalidate the sale. Documents may need specific authentication to be accepted by the flag state. Seller’s documents are crucial for proving ownership and regulatory compliance. Legal professionals have standard expectations for required documents, beyond outdated MYBA lists. Proper planning is needed before the MOA is agreed to ensure all documents are available. Sale documents fall into six categories, which are considered in detail below. Seller’s documents are crucial for proving ownership and regulatory compliance. Legal professionals have standard expectations for required documents, beyond outdated MYBA lists. Proper planning is needed before the MOA is agreed to ensure all documents are available. Sale documents fall into six categories, which are considered in detail below. Clause 18 of the MOA requires "Addendum One" documents, but no such addendum is included. Essential documents are needed for re-registration and proving title, without which the vessel could lose value. Missing corporate authorities or powers of attorney could invalidate the sale. Documents may need specific authentication to be accepted by the flag state. Unhelpfully, Clause 18 of the MOA simply sets out that the “Addendum One” documents must be provided by the seller, yet the MOA doesn’t come with Addendum One – or any addenda for that matter. Certain documents will be needed for re-registration and for proving title – without which the vessel may be worth less or even worthless. The sale itself could be invalidated where the correct corporate authorities and powers of attorney aren’t in place. And such documents may need to be authenticated in a particular way(s) in order to be accepted by the vessel’s new or existing flag state. The seller’s documents are so much more than mere paperwork: they help prove ownership, and are evidence that the vessel complies with certain regulations. They’re fundamental, not a formality. Most lawyers involved in yacht sale and purchase will have their own standard document setting out what they expect to see when representing the buyer. At some point, MYBA has produced it own rather meagre list, versions of which are still doing the rounds years later. It’s best to think about what’ll be asked for, and who has possession of these (or can provide them) even before the MOA is agreed. Assuming the vessel is owned through a company, the paperwork can be divided into six broad categories: Seller due diligence, proving that the company exists and has the capacity to own and sell the vessel; Beneficial owner due diligence, confirming identity and providing a personal guarantee; Seller corporate documents, resolving to sell and appointing attorneys; Asset due diligence, demonstrating provenance and conformity with safety regulations; Liability due diligence, showing that those would could have a claim against the vessel do not; and Sale process documents, which will show that the sale took place, when and where. Let’s look at each group in further detail. SELLER DUE DILIGENCE A Certificate of Incorporation , Memorandum of Association and Articles of Association , in respect of the selling company (including any amendments) are needed to verify that the seller is the legally-registered entity it appears to be, which actually has the authority to own and sell the asset. This may sound obvious, but companies can only do what they’re empowered to do. A recent Certificate of Incumbency , or equivalent certificate, is important in verifying the current shareholders and directors of the seller, as well as confirming that the seller is in good standing and no action is being taken against them. A Certificate of Good Standing , or equivalent certificate, is also needed from the seller's registry to certify that they are in good standing with that registry. These documents are necessary fundamental to ensuring that the buyer is not at risk of fraud. BENEFICIAL OWNER DUE DILIGENCE A Personal Guarantee & Indemnity , whether on standard MYBA terms or otherwise, from the yacht’s beneficial owner, goes a long way to providing additional security for the buyer in case the seller is unable to fulfil its obligations under the sale agreement. The seller, after all, is almost certainly an offshore company with no assets to claim against other than the vessel which has just been sold. The guarantee should make provision for private arbitration so that, in the event of a dispute, matters aren’t settled in the public eye. Up-to-date personal identity documents are also useful in making sure that whoever signs the guarantee is who they claim to be. It should be noted that not all beneficial owners are happy to provide these documents. Some take the view that all their assets are owned through companies with which they don’t want to have any involvement. If you don’t want to agree to provide these to the seller, that’s your prerogative. This may or may not be a deal-breaker for the buyer. SELLER CORPORATE DOCUMENTS As with any large transaction undertaken by a company, the seller needs to produce written Resolutions , signed by someone with the requisite authority, confirming ownership, approving the sale, and authorising representatives to act on behalf of the company in respect of the completion of the sale (such attending on board at completion, and signing the sale documents). For the sake of certainty, Powers of Attorney are also needed to give the individuals the powers which the company has resolved to given them. ASSET DUE DILIGENCE It doesn’t provide conclusive proof, but the Certificate of Registry does help to prove ownership. The Builder’s Certificate shows who the builder was (yard pedigree being an important component of value) as well as it’s specification (which is vital when establishing what regulations will apply and establishing whether it can be chartered). Providing all the previous Bills of Sale will establish a chain of ownership transferal, extending back to its launch, which helps to confirm current ownership, as well as being documents which a fraudster would struggle to produce. The yacht will be subject to various regulations and all the relevant safety and convention certificates must be obtained well in advance of the sale so that the buyer knows that the yacht is capable of satisfying these rules. LIABILITY DUE DILIGENCE Debts incurred by an owner, in respect of their yacht, can be enforced against that yacht (as well as that owner) even after it’s been sold to an unsuspecting buyer. So a recent Transcript of Register will show that the vessel is free from any registered liens or encumbrances and is still solely owned by the seller. It’s also important to obtain a Manager’s Letter (if a yacht manager has been engaged) and a Captain’s Letter , confirming that the seller has no liabilities to the manager, or captain, or any third parties, and that the yacht has not been involved in any incidents or accidents since the pre-sale condition survey. Crewmembers’ Letters will confirm that each crewmember has been paid everything owed to them. And where the yacht is being sold as having a tax-paid status, evidence of this must be prepared – allowing sufficient time for the buyer to take advice from a local tax specialist. SALE PROCESS DOCUMENTS A Completion Timetable , which lists all parties involved in the completion of the sale, their contact details, and the necessary steps to be taken during and after completion, is essential to ensure that all parties are aware of the steps required to complete the sale and that they are well-coordinated. The Bill of Sale , signed by the seller, declares that the vessel is free from all debts, claims, liens, and encumbrances and transfers ownership to the buyer. This document is necessary to establish transfer of ownership, and is vital for re-registration in the buyer’s name. As the time and location of the transfer of ownership may have tax implications, a Protocol of Delivery & Acceptance , in an agreed format, must be agreed. As a formal payment request, the seller’s Commercial Invoice is essential for bookkeeping and provides customs authorities with essential information regarding the transaction. Finally, the seller must produce a Letter of Undertaking that the yacht will be deleted from the current ship registry soon after the sale. Deletion isn’t free and involves professional time which the seller will have to pay for. Feel free to contact us for further guidance. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Document Authentication Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Document Authentication

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Converting working and naval ships in to yachts can save time and money, and the results can be spectacular. As each project is unique and challenging, it is crucial that terms are agreed with the yard undertaking the work which are clear, fair and practical. And each such agreement will be a one-off. Home Handbook Upcycling / / Conversion Agreements 10 August 2019 Last revised minutes 5 Reading time Converting working and naval ships into yachts can save time and money, and the results can be spectacular. Each project is unique and challenging. It is crucial that the terms agreed with the yard undertaking the work are clear, fair and practical. And each such agreement will be as unique as the project. minutes 5 Reading time 10 August 2019 Last revised Converting working and naval ships into yachts can save time and money, and the results can be spectacular. Each project is unique and challenging. It is crucial that the terms agreed with the yard undertaking the work are clear, fair and practical. And each such agreement will be as unique as the project. By choice, most shipping agreements, including yachting, are governed by English law regardless of the parties' location. Conversion agreements are subject to the Supply of Goods and Services Act 1982, which implies terms such as satisfactory quality and reasonable fitness for purpose. Yards must use reasonable care and skill in providing services, but it may not meet the high standards expected in yachts. Parties should seek legal advice to create fair and workable terms for conversion agreements. The price for conversion works is usually a fixed fee payable in installments, with adjustments for changes in specifications. The scope of works should be clearly defined, including repair and conversion components, with detailed technical specifications and objective performance standards. The agreement should address interface risks and allocate responsibility for inaccuracies in plans and specifications. A specific timeframe, known as the Redelivery Date, should be agreed upon, with provisions for liquidated damages and cancellation if the project overruns. Other key provisions include force majeure clauses, security arrangements, material ownership, insurance coverage, and warranty periods for remedying faults. The scope of works should be clearly defined, including repair and conversion components, with detailed technical specifications and objective performance standards. The agreement should address interface risks and allocate responsibility for inaccuracies in plans and specifications. A specific timeframe, known as the Redelivery Date, should be agreed upon, with provisions for liquidated damages and cancellation if the project overruns. Other key provisions include force majeure clauses, security arrangements, material ownership, insurance coverage, and warranty periods for remedying faults. By choice, most shipping agreements, including yachting, are governed by English law regardless of the parties' location. Conversion agreements are subject to the Supply of Goods and Services Act 1982, which implies terms such as satisfactory quality and reasonable fitness for purpose. Yards must use reasonable care and skill in providing services, but it may not meet the high standards expected in yachts. Parties should seek legal advice to create fair and workable terms for conversion agreements. The price for conversion works is usually a fixed fee payable in installments, with adjustments for changes in specifications. Most agreements in shipping (including yachting) are governed, by contract if not otherwise, by English law – no matter where in the world the parties are. Unlike shipbuilding agreements, which under English law are contracts for the sale and purchase of goods, conversion agreements are, broadly, contracts for the sale and purchase of labour combined with a supply of materials. As such, they are governed by the Supply of Goods and Services Act 1982 (as amended) and thereby subject to the same implied terms that apply to a contract for the sale of goods, namely that the materials must be of “ satisfactory quality ” and “ reasonably fit ” for any specific purpose expressly or implicitly disclosed to the yard. Further, in providing services, the yard must merely use “ reasonable care and skill ” – which the courts have determined means “ the ordinary skill of an ordinary competent [person] performing that particular art .” The result may be far from the highest standards of workmanship expected in the context of yachts. Far better, then, to agree to certain objective specifications being met. KEY PROVISIONS As with yacht building, there is no standard conversion agreement for parties to use and adapt. Elements of standard shipbuilding, and standard yacht refit, agreements could be used but the parties should take advice at the outset so that fair and workable terms are agreed – including some of the following key terms. PRICE Works are typically carried on for fixed fee, payable in instalments following the completion of particular stages of the conversion. Changes in specifications are reflected in adjustments agreed to the fee. Owners should insist on unit prices for labour and key materials being fixed at the outset, in order that the yard cannot raise these unduly in respect of additional works. SCOPE Setting out the scope of the works to be completed is key. There is no alternative to drafting a detailed technical specification – including plans, objective performance and/or finish standards to be achieved. It's helpful to divide the scope into two distinct components: A repair scope, setting out the elements needing repair following the thorough pre-purchase survey; and A conversion scope, setting out what needs to be added – or removed – in order for the vessel to become a yacht. The repair scope will need some inherent flexibility as the repairs themselves may reveal further issues which weren’t apparent during the survey, while the conversion scope can, and should, be very rigid. In addition, the conversion agreement will have to describe standards to be met by the yard in respect of the works. Vague standards often used in the context of trading vessels – such as “ first class ” shipbuilding standards – should be avoided, and objective standards used. Comparisons can be made to other existing vessels. But ideally, reference should be made to Classification Society Rules or other objective standards and measurements. There are few, if any, aspects which can’t be measured objectively – which is crucial especially where the yard isn’t used to the very high standards expected by yacht owners. Converting a vessel into a yacht may pose “interface risks”. These are the risks of a failure of materials and/or design where new materials and equipment are installed into an existing structure. So, if possible, the yard should bear such risks. Yards can require owners to warrant that plans and specifications of the vessel as it comes into the yard are accurate – meaning that additional expenses arising from any inaccuracies will be for the owner’s account. TIMEFRAME Parties will need to agree that the works should be finished by a specific date, typically referred to as the Redelivery Date – with fixed amounts of money (known by lawyers as “liquidated damages”) payable for each day that the project overruns. This avoids otherwise lengthy and expensive arguments about quantifying loss of use. And if the overrun goes beyond an agreed date, the owner must be allowed to cancel the agreement and take the vessel for completion elsewhere. Yards will need to prepare for the vessel’s arrival well ahead of time. In particular, other projects may need to be relocated within the yard to make space. Manpower will need to be arranged. Supplies will have been ordered and/or delivered, and third-party contractors may have been booked or will be on standby. The yard will therefore want to be notified of the actual arrival date – and be updated on her progress towards the yard – irrespective of the specific agreed starting date. The agreement will typically specify what will happen if the vessel is delivered late, with the yard usually being allowed to extend the contractual redelivery date by the same amount of time. Alternatively, the redelivery date may be replaced by an obligation on the yard’s part to finish the work and redeliver the vessel within a reasonable amount of time. FORCE MAJEURE Force majeure clauses automatically retard the redelivery date by an amount of time equivalent to that of the delaying event – where such event is due to certain circumstances beyond the yard’s control. As with the timeframe for the works, it is wise to have a long-stop date, beyond which the owner can cancel the agreement and take the vessel away elsewhere for completion. SECURITY It must be expressly agreed that the owner at all times retains title in the vessel, and all her machinery, equipment and items awaiting installation. Indeed, the owner may need to keep a skeleton crew on board, at least a build captain, for the duration of the works. The conversion agreement should also state that the owner acquires title to the works and equipment that are continuously added as the project progresses. As owner, should you wish to cancel the project prior to completion, your remedies are normally limited to removing your project for completion at a second yard, and suing the yard for any additional completion costs over and above the outstanding balance of the price agreed with the first yard. This will take time – especially where enforcement proceedings are required in the yard’s own jurisdiction – and some legal costs may not be recoverable. Far better, then, to obtain a performance guarantee or completion bond, giving security against major cost overruns when finishing the vessel elsewhere. MATERIALS With a steady throughflow of materials at the yard, there is scope for disagreement over who owns what at any given time. It is vital to establish this, as such materials must be insured, and protected from the yard’s creditors in the event of insolvency. The yard must ensure that such provisions in the conversion agreement do not contradict the terms under which such materials have been bought by the yard form third party suppliers. Where ownership has passed to the owner, the yard may want to have a contractual lien over such materials in case of a future non-payment by the owner. INSURANCE It’s vital that the owner and yard agree on how the risks of loss or damage to the vessel and materials will be covered. This includes owner-supplied items being stored ashore at the yard. Owners usually maintain their Hull & Machinery (first party) and Third Party Liability policies. And it’s vital not only to discuss the works in detail with insurance brokers , but to be as certain as possible that the underwriters themselves have been notified and agree to the scope of the works, which yard is to be used, etc. Particular attention must be paid to policy terms, especially any requiring the vessel to remain fully crewed at all times. It would be unwise to assume that underwriters will overlook such a requirement just because the vessel is subject to extensive works. WARRANTY A warranty period of twelve months is typical – during which the yard is contractually obliged to remedy faults arising – as is normally found in build agreements. However, the warranty will need to be carefully drafted to avoid disputes over whether is it the new or original parts or equipment which have failed, and if it’s the original elements whether this is due to the presence of the new elements. Yards will often only agree to limit its liability to the repair of its own defective materials or workmanship. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Conversion Projects Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Conversion Projects

Connect to us your way regarding any aspect of The Owners Club - by email, WhatsApp or through LinkedIn. Feel free to run anything past us regarding buying or building a yacht or superyacht, or any aspect of owning, managing or selling. Plus anything to do with superyacht crew recruitment and employment. Home / Contact Reach Out CONNECT YOUR WAY Feel free to drop us a line gensec@theownersclub.org Connect with the General Secretary on LinkedIn here Chat directly with the General Secretary on WhatsApp here Follow our LinkedIn page here

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Unavailable at present Latest Position Wright A Way & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 105 m Length Builder & Co Builder 2022 Build year 1980 Gross tonnage Panama Registry Particulars Role Model

Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. Home Handbook Chartering Out / / Difficult Guests 3 October 2017 Last revised minutes 3 Reading time Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. minutes 3 Reading time 3 October 2017 Last revised Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. In the absence of an agreement stating otherwise, the broker marketing the yacht is considered the owner's agent and must act in the owner's best interests. Once the broker books the charter, the owner is bound by the charter agreement and must provide the yacht to the charterer. The terms of the charter agreement are often based on the MYBA Charter Agreement, which allows the owner to back out only in exceptional circumstances and with financial consequences. The captain is required by law to refuse illegal instructions from the charterer, but there are other unsavory or immoral actions that may not be illegal. The MYBA form explicitly prohibits certain behaviors, such as causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Any breach of the charter agreement may entitle the owner to terminate the contract immediately and claim damages. The captain must raise issues with the charterer before the owner can terminate the contract, according to the MYBA Charter Agreement. Despite the challenges, chartering can help offset the costs of owning large yachts with the right guidance and support. The MYBA form explicitly prohibits certain behaviors, such as causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Any breach of the charter agreement may entitle the owner to terminate the contract immediately and claim damages. The captain must raise issues with the charterer before the owner can terminate the contract, according to the MYBA Charter Agreement. Despite the challenges, chartering can help offset the costs of owning large yachts with the right guidance and support. In the absence of an agreement stating otherwise, the broker marketing the yacht is considered the owner's agent and must act in the owner's best interests. Once the broker books the charter, the owner is bound by the charter agreement and must provide the yacht to the charterer. The terms of the charter agreement are often based on the MYBA Charter Agreement, which allows the owner to back out only in exceptional circumstances and with financial consequences. The captain is required by law to refuse illegal instructions from the charterer, but there are other unsavory or immoral actions that may not be illegal. Had the owner known who the charterer was, he would have never have agreed. The charter broker was aware of the charterer’s reputation but remained silent until just before the start of the charter. In the absence of agreement to the contrary, the broker marketing the yacht on behalf of the owner will often be, in law, the owner’s agent. As such, the broker must perform with the appropriate care and skill, and not allow any conflict between personal interests and those of the principal. By booking a charter with someone known to be unsuitable, it could be said that the broker wasn’t careful and just wanted the commission. THE AGREEMENT Once the broker has booked the charter, however, the owner will have been bound by the charter agreement, and is bound to provide his yacht to the charterer. The terms will have been set out in the charter agreement. The most common terms are those published by the Mediterranean Yacht Brokers Association (‘MYBA’), which have also been adopted by the American Yacht Charter Association. The MYBA Charter Agreement only allows the owner to back out as a result of circumstances beyond his control, on pain of reimbursing the owner plus an extra 50%. EDGY BEHAVIOUR While, subject to the charter agreement, the yacht is the charterer’s to do with as he pleases, the captain is obliged by law to refuse to comply with illegal instructions. However, there are many things a charterer may do which, while unsavoury or immoral, are not illegal. The MYBA form therefore expressly bans, for example, behaviour causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Member’s Experience: “ I have been chartering my yachts for more than 15 years and have maintained an excellent relationship with brokers and charterers. In fact, my yachts are considered some of the most successful yachts on the charter market. What has occurred is certainly an aberration and not to be confused with the excellent work the broker community has done these many years. ” Generally, any breach may allow the owner to treat the charter as having come to an end immediately and claim damages, or just claim damages afterwards, depending on how serious the breach is. But the owner must have suffered some sort of actual loss as a result of the breach: an upset crew may not be enough. RAISING ISSUES The MYBA Charter Agreement specifically requires the captain to raise issues with the charterer first, before the owner has a chance to terminate the contract. A failure to do this could arguably be seen as a waiver of the owner’s rights, and owners may wish to amend such standard form contracts. The Member was at pains to point out that these circumstances are unusual, commenting, “I have been chartering my yachts for more than 15 years and have maintained an excellent relationship with brokers and charterers. In fact, my yachts are considered some of the most successful yachts on the charter market. What has occurred is certainly an aberration and not to be confused with the excellent work the broker community has done these many years.” DON’T BE PUT OFF For all the pitfalls and hurdles, chartering can substantially offset the costs associated with the ownership of large yachts – with the right guidance and support. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about How to Charter Out Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about How to Charter Out

Unavailable at present Latest Position Yachts & More Listing Email WhatsApp +44 7773 246 246 Central Agent 32 m Length Thompson Yachts Builder 2018 Build year 347 Gross tonnage United Kingdom Registry Particulars Token

While adherence to classification society Rules is often mandatory, don’t think of these organisations as being there to impose health and safety restrictions and add to an already considerable mound of paperwork. They have their limitations, but they are useful sources of technical knowhow, and their experts can add real value to your build. Home Handbook Building / / Keep it Classy 10 May 2023 Last revised minutes 3 Reading time While adherence to classification society Rules is often mandatory, don’t think of these organisations as being there to impose health and safety restrictions and add to an already considerable mound of paperwork. They have their limitations, but they are useful sources of technical knowhow, and their experts can add real value to your build. minutes 3 Reading time 10 May 2023 Last revised While adherence to classification society Rules is often mandatory, don’t think of these organisations as being there to impose health and safety restrictions and add to an already considerable mound of paperwork. They have their limitations, but they are useful sources of technical knowhow, and their experts can add real value to your build. Classification societies establish and apply standards (Rules) for design, construction, and maintenance of yachts, focusing on technical aspects. Building and keeping a yacht in Class can boost resale value and ensure compliance with Flag State requirements and insurance policies. Classification societies can provide additional consultancy services during builds and refits, assisting with design development. The connection between classification and insurance dates back to the 17th century, with societies like Lloyd's Register providing vessel information to underwriters. The leading classification societies are members of the International Association of Classification Societies (IACS), which aids in developing regulations. Societies have limitations, including their focus on physical aspects and potential reliance on sampling instead of full examinations due to their experience with larger ships. Claims against societies for mistakes during the build or regular surveys can be challenging due to the choice of law, historical links to specific countries, and liability exclusions in the agreement. When choosing a society, consider membership in IACS, acceptance by insurance underwriters, openness to new ideas, and a deep understanding of large yachts. Establish a good working relationship with the society's surveyor, considering them as an integral part of the build team. Classification does not guarantee build quality or vessel maintenance; it primarily focuses on technical compliance. Societies have limitations, including their focus on physical aspects and potential reliance on sampling instead of full examinations due to their experience with larger ships. Claims against societies for mistakes during the build or regular surveys can be challenging due to the choice of law, historical links to specific countries, and liability exclusions in the agreement. When choosing a society, consider membership in IACS, acceptance by insurance underwriters, openness to new ideas, and a deep understanding of large yachts. Establish a good working relationship with the society's surveyor, considering them as an integral part of the build team. Classification does not guarantee build quality or vessel maintenance; it primarily focuses on technical compliance. Classification societies establish and apply standards (Rules) for design, construction, and maintenance of yachts, focusing on technical aspects. Building and keeping a yacht in Class can boost resale value and ensure compliance with Flag State requirements and insurance policies. Classification societies can provide additional consultancy services during builds and refits, assisting with design development. The connection between classification and insurance dates back to the 17th century, with societies like Lloyd's Register providing vessel information to underwriters. The leading classification societies are members of the International Association of Classification Societies (IACS), which aids in developing regulations. Classification societies (sometimes known just as ‘Class’) are privately-organised groups of engineers and surveyors. They are experts in the technical aspects of yacht construction and maintenance. Their principal role is to research, establish and apply standards (known as ‘Rules’) for design, building and maintenance. The Rules are highly detailed, covering the integrity of the hull, machinery and key safety systems. Depending on your yacht’s size, and whether it’s going to be chartered-out, your chosen Flag State, may require the vessel to be built according to Rules, and, on launching, be kept ‘in Class’. Societies also offer additional consultancy services, going beyond basic classification, during builds and refits. Building to Rules and keeping your yacht in Class can boost the resale value whether or not it is chartered. Where must, as a matter of law, be kept in class, then failing to do so may invalidate insurance policies. Even before the build agreement is signed, the society can review the proposed plans, and in particular any novel features or materials. As well as assessing Rule compliance, they can assist with design development – in a relatively cost-effective way, too. CLASS & INSURANCE The connection between classification and insurance goes back a long way. The oldest society, Lloyd's Register , was named after a 17th-century London coffee house that was frequented by merchants, ship owners and insurance underwriters. Keen to encourage patrons to stay longer, coffee house owner, Edward Lloyd, printed and circulated industry news. The customers set up the Society for the Registry of Shipping in 1760, with the aim of recording information about vessel quality, thereby enabling the underwriters to make more informed decisions about risk. The records were listed, rated and classed in the Society’s Register Book. Subscriptions generated by the Register Book paid for surveyors to examine the vessels. Today, the leading 11 societies are all members of the International Association of Classification Societies (IACS) - a non-governmental organization covering over 90% of the world’s shipping tonnage. IACS is a non-governmental organization, which helps the International Maritime Organization to develop regulations. LIMITATIONS Societies have two principal limitations. Firstly, they only consider the physical aspects of the yacht and its equipment, not how they are used. Secondly, because they are more used to examining ships ten times the volume of even the largest yachts, there can be a reliance on sampling rather than full examinations: things can be missed. Classification doesn’t automatically assure build quality or vessel maintenance. LIABILITY Society surveyors are human and make mistakes. An owner might want to claim against a society where there has been a mistake made during the build process. More common are omissions made during the regular surveys, especially where the maintenance of the yacht ‘in Class’ is a reason underpinning a purchase. The latter may be an important route to getting compensation, given that the societies are large organisations with deep pockets, whereas the seller is often just an owning company with no other assets once the vessel is sold. What makes claims against societies difficult is that while commercial parties often automatically choose English law, the societies all have historical links to particular countries, and often insist on the law of their ‘home’ country. Further, there are still no international conventions on this subject, despite some initiatives. The choice of law is normally agreed in the contract, of course, but this may not automatically be respected by certain courts, and such a choice may be meaningless to third party buyer who was not party to original contract for classification services. Societies will, where possible, expressly exclude their own liability in the terms of the agreement with the owner. These attempts have largely been upheld. Amazingly, terms will commonly state, for example, that the society ‘does not warrant the accuracy of any information or advice supplied…’ and ‘…will not be liable for any … act, omission, error, negligence, or … any inaccuracy in any information or advice given’. Indeed, the society may also state if there has been negligence on their part, then they will compensate the owner, but only up to the amount of the society’s fees paid – which will usually be a fraction of the damages sought. CHOICE OF SOCIETY You should choose a society which: Is a member of IACS, Is acceptable to the proposed insurance underwriter, Is receptive to new ideas and solutions, and Really understands large yachts. The last point is particularly important where your build includes novel designs or materials. Much can be at the discretion of the society’s surveyor, so a good working relationship is vital. Think of the surveyor as an integral part of your build team. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Engage a Builder Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Engage a Builder

The types of yacht insurance you need depends on the size of your vessel – and how you use it. Various types of cover can be combined within one product. Having insufficient cover can breach local laws, but be careful not to be sold cover you don’t need. And make sure you understand the role of the company you’re buying the policy through. Home Handbook Insuring / / Types of Insurance 26 March 2023 Last revised minutes 8 Reading time The type of insurance you need depends on the size of your yacht – and how you use it. Various types of cover can be combined within one product. Having insufficient cover can breach local laws, but be careful not to buy cover you don’t need. And make sure you understand the role of the company you’re buying the policy through. minutes 8 Reading time 26 March 2023 Last revised The type of insurance you need depends on the size of your yacht – and how you use it. Various types of cover can be combined within one product. Having insufficient cover can breach local laws, but be careful not to buy cover you don’t need. And make sure you understand the role of the company you’re buying the policy through. Large yacht ownership involves various risks, and insurance coverage is available to mitigate those risks. Compulsory insurances are required by port authorities, including third-party liability cover for yachts over 300 gross tonnes. Protection & Indemnity (P&I) Clubs provide liability coverage and support for yacht owners, often combined with Freight, Demurrage & Defence (FD&D) cover. Employers' liability insurance is required under UK law for the legal owner's liability for employee injuries. Maritime Labour Convention (MLC) requirements include liability coverage for repatriation, outstanding salaries, and occupational injury-related payments for crew. Crew welfare insurance covers medical costs and financial repercussions for crew members in case of illness or accidents. Oil pollution insurance is necessary to cover the legal owner's liability for oil spills caused by crew members. Wreck removal insurance is required by some countries and mandates coverage for the costs of removing wrecks. Hull & Machinery insurance covers loss or damage to the yacht, its engines, equipment, fittings, and accessories. Additional coverage options include war & strikes, fine art & valuables, subsea equipment, kidnap & ransom, project risk, and project liability insurance. Crew welfare insurance covers medical costs and financial repercussions for crew members in case of illness or accidents. Oil pollution insurance is necessary to cover the legal owner's liability for oil spills caused by crew members. Wreck removal insurance is required by some countries and mandates coverage for the costs of removing wrecks. Hull & Machinery insurance covers loss or damage to the yacht, its engines, equipment, fittings, and accessories. Additional coverage options include war & strikes, fine art & valuables, subsea equipment, kidnap & ransom, project risk, and project liability insurance. Large yacht ownership involves various risks, and insurance coverage is available to mitigate those risks. Compulsory insurances are required by port authorities, including third-party liability cover for yachts over 300 gross tonnes. Protection & Indemnity (P&I) Clubs provide liability coverage and support for yacht owners, often combined with Freight, Demurrage & Defence (FD&D) cover. Employers' liability insurance is required under UK law for the legal owner's liability for employee injuries. Maritime Labour Convention (MLC) requirements include liability coverage for repatriation, outstanding salaries, and occupational injury-related payments for crew. Here we’re looking at the various risks which large yacht ownership entails, and the cover available. Individual policies go by various names, and multiple risks are sometimes covered by one product, especially for smaller vessels. Compulsory insurances are considered first, followed by discretionary coverage. Many port authorities require not only cover, but also immediate proof in the form of certificates, so make sure these are issued simultaneously with insurance documentation. THIRD PARTY LIABILITY Risk Risk of the legal owner’s liability to third parties, while your yacht is in service. Required For yachts of 300 gross tonnes or more, third party liability cover is required by, and in accordance with, the Merchant Shipping (Compulsory Insurance of Shipowners for Maritime Claims) Regulations 2012 (UK) and Directive 2009/20/EC on the insurance of shipowners for maritime claims (EU). Most port states and private marinas require third party cover. Remarks Offered as Third Party Liability (TPL) insurance, or as broader Protection & Indemnity (P&I) cover - particularly for larger yachts. Historically, because third party claims can be so large (think oil spills), commercial ship owners joined together to form Protection & Indemnity Clubs, known as P&I Clubs. The larger ones are members of the International Group which has liability pooling arrangements to cope with the largest claims. Operating on a mutual not-for-profit basis, meaning that members can be asked to pay additional amounts to make the books balance, yacht owners can be an awkward fit. Some Clubs now offer fixed-premium cover. P&I Clubs in particular have claims handlers and foreign correspondents able to provide immediate advice following an incident, and can provide useful loss prevention guidance. In the unlikely event of a yacht being detained at a port following, for example, an accidental diesel discharge, the club will also have the known and respected financial muscle to provide security and allow the yacht to be released while the claim is processed at a later date. This support can be extremely useful in helping to keep a charter schedule on track, especially where problems are encountered in exotic destinations where local insider knowledge and contacts are vital. Although owners and managers should always ensure that they make the most of the Clubs’ support, this network is often overlooked. It can be packaged with Freight, Demurrage & Defence (FD&D) cover, which combines hands-on legal support provided by P&I Club in-house lawyers, and cover for external legal advice. EMPLOYERS’ LIABILITY Risk Risk of the legal owner’s liability for bodily injury or disease sustained by any of its employees and arising out of and in the course of their employment. Required Required within the waters of, and yards within, Great Britain under the Employers' Liability (Compulsory Insurance) Act 1969 as supplemented by the Employers' Liability (Compulsory Insurance) Regulations 1998, in respect of any employee ordinarily resident in Great Britain. Remarks This is a specific requirement of United Kingdom law, but similar requirements apply in many other jurisdictions, such as under the Jones Act in the United States. Cover will usually already be provided by a P&I Club (if applicable) so make sure you’re not paying for separate employers’ liability unnecessarily. Your broker should be able to advise you of cover limits applicable. It’s easy for dayworkers to become employees for the purposes of the law – even though they aren’t formally employed as crew or otherwise. MLC REQUIREMENTS Risk Risk of the legal owner’s liability for repatriation of crew and associated essentials, liability for outstanding salaries, etc, and liability for contractual payments for death or long-term disability due to an occupational injury, illness or hazard. Required Required in respect of all chartered yachts, where the Maritime Labour Convention 2006, as amended, (MLC) is in force, and aboard yachts registered in countries applying the MLC, pursuant to Regulation 2.5 Standard A2.5.2 Paragraph 9 and Regulation 4.2 Standard A4.2.1 paragraph 1(b) of MLC. Remarks Cover will usually already be provided by a P&I Club (if applicable) so make sure you’re not paying for separate MLC cover unnecessarily. Your broker should be able to advise you on whether such cover is needed. CREW WELFARE Risk Risk of a crewmember being unavailable for work for longer than necessary. Required Some elements may be required by law. Remarks Typically covers treatment costs, and financial repercussions, for crew in the event of illness or accident – whether on duty or not, and whether on board or ashore. Cover varies considerably, and there may be some elements of the cover which overlaps with, or includes, employers’ liability insurance and/or cover required by MLC. Beyond legal requirements, unless you’re prepared to pay this out of your own pocket, it makes sense to insure against crew accidents and medical treatments costs. It’s a benefit which is appreciated and may help to ensure that crew with minor injuries can return to work as soon as possible. OIL POLLUTION Risk Risk of the legal owner being held liable for the criminal acts of crewmembers in causing oil pollution, and the effects and costs of cleaning up. Required Insurance is usually required in respect of all yachts over 1,000 GT by the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001, but liability under this convention extends to vessels of all sizes. May also be required by other local laws, such as the United States Oil Pollution Act 1990. Remarks Fines and clean-up costs can be enormous, and the spectre of criminal liability – potentially meaning that beneficial owners cannot shelter behind an owning company – means that you must be clear that the requisite cover is in place. Cover is normally provided by P&I Clubs, and Blue Cards, proving cover, can normally be obtained on request. Fines can be issued for not carrying proof on board. WRECK REMOVAL Risk Risk of the legal owner being fined for not being insured against the costs of wreck removal. Required Insurance can be required in respect of all yachts of 300 GT and over – by a small but growing number of countries – under the Nairobi International Convention on the Removal of Wrecks 2007. It can also be mandated by local laws. Remarks Cover is normally provided by P&I Clubs, and Blue Cards, proving cover, can normally be obtained on request. Fines can be issued for not carrying proof on board. HULL & MACHINERY Risk Risk of loss of, or damage caused to, your yacht, its engines, equipment, fittings and accessories. Required Not normally required by law. Remarks The term Hull & Machinery is a little misleading since the whole yacht will be covered, not just the hull and ‘machinery’ – a shipping term essentially meaning the engine and sterngear. The precise scope of cover will vary. Check, for example, whether fine art and valuables are covered, as well as your other personal effects and those of guests and crewmembers. Be aware of conditions in respect of named storms, and geographical cruising limits. Also check whether tenders are covered. Aircraft and submersibles carried on board are normally excluded. WAR & STRIKES Risk Risk of loss of, or damage caused to, your yacht, its engines, equipment, fittings and accessories, caused by war, terrorism, insurrection and strikes, and not covered by your Hull & Machinery policy. Required Not normally required by law. Remarks While cruising in a war zone isn’t going to provide the most relaxing experience, this fills gaps in the Hull & Machinery policy which may exclude passages through waters known for piracy, and damage caused where volatile political demonstrations spill over into harbourside areas. FINE ART & VALUABLES Risk Risk of loss of, or damage caused to, works of art and other valuable items, installed or carried on board your yacht, and not covered by your Hull & Machinery policy. Required Not normally required by law. Remarks Because the sky could otherwise be the limit to losses – and because yacht insurance has its roots in commercial shipping, works of art and other valuable items are normally excluded from Hull & Machinery policies. This insurance fills that gap. Be alert of the need to agree item descriptions and valuations at inception. SUBSEA EQUIPMENT Risk Risk of loss of, or damage caused to, submersibles being carried on board your yacht, and not covered by your Hull & Machinery policy. Required Not normally required by law. Remarks Submersibles being too specialist a risk for many underwriters, they are normally excluded. KIDNAP & RANSOM Risk Risk of you having to pay for crisis response, negotiation services and ransoms in the event of a kidnapping. Required Not normally required by law. Remarks While damage caused to your yacht, by pirates, should be covered by Hull & Machinery or War & Strikes Risks, costs associated with any resulting kidnapping are not. This insurance looks to plug that gap. PROJECT RISK Risk Risk of loss of, or damage caused to, your yacht, its engines, equipment, fittings and accessories, while being built. Required Not normally required by law. Remarks Hull & Machinery insurance is for yachts that have been completed – not in-build projects. The builder will insure the project (and this should have been addressed in the build agreement ) but the builder’s cover may be limited. This cover looks to plug that gap, as well as covering parts and equipment in storage at the yard and awaiting installation. PROJECT LIABILITY Risk Risk of the legal owner’s liability to third parties, while your yacht is being built, refitted or repaired. Required May be required by law. Remarks While the builder’s insurances should provide cover in respect of its own contractors and employees, it will not normally cover your project manager(s), crewmembers and contractors which you engage in respect of the project, and its tenders. You may have specific employers’ liability insurance obligations, or the local equivalent. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Understanding the Contract Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Understanding the Contract

The loan finance business model is as simple as it sounds: the owner borrows part of the purchase price from a bank or other lender, and is the legal, registered owner of the yacht. The lender takes security over the yacht. While most yacht loan agreements and associated documentation is complex, most of this relates to the lender’s security. Home Handbook Financing / / Loans Overview 21 July 2015 Last revised minutes 2 Reading time The loan finance business model is as simple as it sounds: the owner borrows part of the purchase price from a bank or other lender, and is the legal, registered owner of the yacht. The lender takes security over the yacht. While most yacht loan agreements and associated documentation is complex, most of this relates to the lender’s security. minutes 2 Reading time 21 July 2015 Last revised The loan finance business model is as simple as it sounds: the owner borrows part of the purchase price from a bank or other lender, and is the legal, registered owner of the yacht. The lender takes security over the yacht. While most yacht loan agreements and associated documentation is complex, most of this relates to the lender’s security. Lenders typically use their own documentation, which may lack clarity and organization. The loan agreement outlines the availability of funds and conditions for repayment. Security provisions are crucial and can be detailed in the loan agreement and additional documents. Covenants in the loan agreement specify borrower obligations and restrictions, such as the sale and navigation of the yacht. Assignments of rights under insurance policies and charter earnings may be required. The mortgage on the yacht is registered as part of the loan agreement. Guarantees from third-party companies and beneficial owners provide additional security. Covenants and restrictions aim to ensure proper management, operational compliance, and insurance coverage. Choosing English law and jurisdiction is common in the ship finance sector due to expertise and favorable legal conditions. Opting for English law can save costs and promote amicable relationships among parties involved. The mortgage on the yacht is registered as part of the loan agreement. Guarantees from third-party companies and beneficial owners provide additional security. Covenants and restrictions aim to ensure proper management, operational compliance, and insurance coverage. Choosing English law and jurisdiction is common in the ship finance sector due to expertise and favorable legal conditions. Opting for English law can save costs and promote amicable relationships among parties involved. Lenders typically use their own documentation, which may lack clarity and organization. The loan agreement outlines the availability of funds and conditions for repayment. Security provisions are crucial and can be detailed in the loan agreement and additional documents. Covenants in the loan agreement specify borrower obligations and restrictions, such as the sale and navigation of the yacht. Assignments of rights under insurance policies and charter earnings may be required. Lenders will usually have their own ready-made documentation. While reasonably uniform in scope and contents, the taxonomy and readability usually leave much to be desired. Within the loan agreement, the loan clause sets out that the loan will be available, either in one lump sum where the yacht has already been built, or at certain newbuild milestones. Given that the lender’s not the owner, the security, detailed in the agreement, is comprehensive. Default events are set out in the loan agreement, to make clear the circumstances which will trigger the lender’s right to demand immediate repayment of the loan and what happens in the event such payment is not forthcoming. Finally, various standard boilerplate clauses in the loan agreement deal with key housekeeping matters, with the most important being the law and jurisdiction clause: parties must make sure they are taking advice from an experienced, insured lawyer duly qualified in the correct jurisdiction. SECURITY Security provisions make up most of the loan documentation, and can be set out both in the loan agreement and further documents: A covenants clause within the loan agreement, and/or a separate deed of covenant Assignments to the lender of the borrower’s rights under yacht’s insurance policies An assignment of the yacht’s charter earnings to the lender The mortgage on the yacht, registered pursuant to the loan agreement A guarantee from a third party company owned by the yacht’s beneficial owner A guarantee from the beneficial owner him or herself Covenants set out positive and negative promises on the part of the borrower. There is usually a restriction on the sale of the yacht, and restrictions the geographical navigation and use of the yacht – for example, the yacht may not be allowed to visit places where enforcement of loan could prove challenging. Chartering and operational management often may only be undertake on approved terms. Where management is deficient, insurance cover could be withdrawn and the lender’s security unnecessarily jeopardised. A more detailed analysis of the security requirements is set out here . LAW & JURISDICTION As, for historical reasons, the centre of the world’s ship finance sector is London, it makes sense to ensure that all the contractual relationships are governed by English law and subject to English jurisdiction. Although it is not easy to think of yachts as being ships, that is exactly what they are in the eyes of the law. A greater concentration of yachting lawyers and case-law, coupled with an innovative banking culture and a legal regime which encourages settlement, means that this choice may well save legal costs and maintain good relations among the parties. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Loan Security Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Loan Security

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 52 m Length Finest Craft Builder 2018 Build year 470 Gross tonnage Marshall Islands Registry Particulars Emblem

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 22 m Length Placeholder Yards Builder 2005 Build year 56 Gross tonnage British Virgin Islands Registry Particulars Innovation

Life’s short: build a yacht. Seems simple enough. For some, only new will do. But building a large yacht is a complicated process, the result of which is a complex series of systems, which need to work reliably, and in harmony. With the right guidance, the process is an exciting and satisfying journey. If you’re not already a Member, your first step's to contact us so we can help you find the right people. Home Handbook Building / / Build Your Team 10 May 2023 Last revised minutes 4 Reading time Life’s short: build a yacht. Seems simple enough. For some, only new will do. But building a large yacht is a complicated process, the result of which is a complex series of systems, which need to work reliably, and in harmony. With the right guidance, the process is an exciting and satisfying journey. If you’re not already a Member, your first step's to contact us so we can help you find the right people. minutes 4 Reading time 10 May 2023 Last revised Life’s short: build a yacht. Seems simple enough. For some, only new will do. But building a large yacht is a complicated process, the result of which is a complex series of systems, which need to work reliably, and in harmony. With the right guidance, the process is an exciting and satisfying journey. If you’re not already a Member, your first step's to contact us so we can help you find the right people. Exceptional projects require exceptional teams, and building a good working relationship with all team members from the start is essential. Small projects allow individuals to combine roles, especially in design. Trusted brokers with industry knowledge add value and may help in maintaining resale value. Exterior and interior designers, naval architects, and project managers are essential team members. Project managers coordinate efforts and seek compromises: some seagoing experience is helpful. Yachts are typically owned through companies for liability and privacy reasons. Cost savings can be achieved through proven hull designs and repurposing existing designs. Clear definitions of team roles, strict timescales, and engaging a lawyer with build experience are important. Project managers coordinate efforts and seek compromises: some seagoing experience is helpful. Yachts are typically owned through companies for liability and privacy reasons. Cost savings can be achieved through proven hull designs and repurposing existing designs. Clear definitions of team roles, strict timescales, and engaging a lawyer with build experience are important. Exceptional projects require exceptional teams, and building a good working relationship with all team members from the start is essential. Small projects allow individuals to combine roles, especially in design. Trusted brokers with industry knowledge add value and may help in maintaining resale value. Exterior and interior designers, naval architects, and project managers are essential team members. As with the counterparts building trading and passenger vessels, yacht builders tend to be conservative in their outlook. Why change what’s worked before? They’re also in business to make money and will look to save costs where they can – in particular by interpreting poorly-drafted build agreements to suit themselves. To a certain extent, builders’ yards are, in reality, pieces of waterside real estate where a multitude of suppliers and subcontractors come together to create the finished article. So putting the right team in place is a vital first step, whose members will advise, negotiate and integrate the efforts and wares of countless third parties. And the more exceptional the project, the more exceptional your team needs to be. All the participants need to be involved right from the start and an excellent working relationship must be built up and maintained. The smaller the project, the greater the scope for individuals to combine roles, especially when it comes to the vessel’s design. KEY TEAM MEMBERS Having decided on how and where they wish to use their yacht, a trusted broker is the best starting point for some Members. Trusted is the key word here. Brokers usually work on commission. Are they looking to build a relationship which could last many happy years, or are they just looking to complete the next deal? Good brokers will have excellent industry knowledge and will add real value. They are sounding boards for ideas, and arbiters of practicality and good taste: the latter two elements being essential in maintaining resale value. The next team members to have on board are the exterior and interior designers, plus a naval architect where a custom yacht is envisaged, and a project manager. Designers produce designs, not technical solutions. Even the most accomplished designers won’t know exactly how workable their designs are, and architects don’t always have an eye for design. So a project manager will also be needed to coordinate all their efforts, and – diplomatically – seek compromises here and there. The project manager should have recent seagoing experience, as captain or engineer, on a vessel of similar type and size. Everyone in the team – you included – need honest feedback on what is and isn’t going to work. Because yachts are sources of liability as well as being assets, and to provide privacy and make accounting easier, yachts are nearly always owned through companies. Trusts can provide an additional layer of secrecy, but keep in mind that obtaining justice can be challenging in some far-flung jurisdictions should your expectations not be met. DON’T ECONOMISE Costs can be kept down by using a proven hull design. Many builders offer semi-custom yachts, where you’ll be making mostly aesthetic choices. If you want to stand out from the crowd, commercial and even military designs can be repurposed to make striking yachts. You need to be clear on who owns the intellectual property and that you have the right to use such designs. Some team roles can be taken on by the same individual or company. Exterior and interior design can be carried out by the same person – arguably leading to more harmonious aesthetics. But trying to save costs by omitting any of the core technical skills sets can have significant adverse effects. Oversights at this first stage can require expensive modifications later, causing lengthy delays. Everyone’s remit must be clearly defined and dovetailed, with strict timescales baked-in to their service contracts. Engaging a good lawyer, with build experience, is crucial here. DESIGN ESSENTIALS A yacht’s design will be determined, in part, by the minimum technical standards dictated by the Flag State , which in turn may require your yacht to be built in compliance with classification society Rules. These are based on internationally agreed-to standards, which must be adhered to if your yacht is going to ever to sail anywhere, and without which you will find it near impossible to insure the vessel. They vary according to length, internal volume and use. But such standards do not generally cover some aspects, such as preventive maintenance, which, over time, will help support the vessel’s condition and resale value. Remove the panels of any yacht and you’ll see an array of pipes, wires and items of equipment. If it’s too difficult or time-consuming to reach such items, they can be overlooked and, eventually, fail. The result is not just you and your guests being inconvenienced. Some repairs can be disproportionately expensive, and in extreme cases this can lead to your yacht not being accepted by a buyer when it’s time to sell. With regards aesthetics, most buyers are reasonably conservative. Avant garde designs are going to look newer for longer, and this will help to maintain their value. But when futuristic tips into plain weird the resale market shrinks rapidly and cost of ownership skyrockets. THE END RESULT Playwright George Bernard Shaw once quipped that reasonable people adapt themselves to the world, while unreasonable people adapt the world to themselves – hence progress depends on unreasonable people. Challenging the innate conservativeness of builders and regulatory authorities requires an experienced, imaginative and practical team. In the case of a full custom yacht, the end result of this exciting pre-build stage should be a design and specification you’re happy with, which is ready to be put out to tender with shortlisted builders, and a team ready to oversee the build. If a semi-custom or series production yacht is your preference, the result is a team which understands your vision and is ready to review, negotiate and modify the builders’ pre-existing designs and specifications. With your team in place, it's time to chose a Flag State , and possibly a classification society , before engaging a builder . Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Choose a Flag Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Choose a Flag

Piracy raises a matrix of legal issues, just at the time when the consideration of these will be the last thing on anyone’s mind. This reinforces the desirability of taking advice in advance and, if necessary, placing a trained and equipped security team on board. For those with real concerns about security, compared with highways, houses and offices, yachts will always be – by far – the most secure location. Home Handbook Managing / / Piracy & Protection 16 April 2010 Last revised minutes 4 Reading time Piracy raises a matrix of legal issues, just at the time when the consideration of these will be the last thing on anyone’s mind. This reinforces the desirability of taking advice in advance and, if necessary, placing a trained and equipped security team on board. For those with real concerns about security, compared with highways, houses and offices, yachts will always be – by far – the most secure location. minutes 4 Reading time 16 April 2010 Last revised Piracy raises a matrix of legal issues, just at the time when the consideration of these will be the last thing on anyone’s mind. This reinforces the desirability of taking advice in advance and, if necessary, placing a trained and equipped security team on board. For those with real concerns about security, compared with highways, houses and offices, yachts will always be – by far – the most secure location. Piracy is defined as any illegal act of violence, detention, or destruction committed by the crew or passengers of a private vessel against another vessel or persons/property on board, outside any country's territorial waters. Hotspots for piracy include the coasts of Indonesia, Somalia, Bangladesh, Nigeria and some South American countries. Insurance coverage for yachts usually has restrictions on cruising areas, and breaching these restrictions may void coverage . Insurers have a broader definition of piracy than the legal definition, as attacks are more likely to occur within territorial waters. Obtaining up-to-date information on current piracy hotspots is crucial, and insurers and maritime security firms can provide assistance. Maintaining vigilance and employing defence measures such as acoustic defence systems and strong-rooms are recommended for yachts in high-risk areas. The legality of carrying weapons depends on the laws of the flag state (where the yacht is registered) and the port state (where the yacht is located). Some countries allow firearms on board as part of the yacht's equipment, while others prohibit certain weapons entirely. Legal consequences and the use of firearms in self-defence can vary depending on the laws of the flag state, port state, and international criminal law. Recognizing pirates can be challenging, and preemptive action may have legal implications. Self-defence and defence of others must be reasonable and proportional to the perceived threat. Maintaining vigilance and employing defence measures such as acoustic defence systems and strong-rooms are recommended for yachts in high-risk areas. The legality of carrying weapons depends on the laws of the flag state (where the yacht is registered) and the port state (where the yacht is located). Some countries allow firearms on board as part of the yacht's equipment, while others prohibit certain weapons entirely. Legal consequences and the use of firearms in self-defence can vary depending on the laws of the flag state, port state, and international criminal law. Recognizing pirates can be challenging, and preemptive action may have legal implications. Self-defence and defence of others must be reasonable and proportional to the perceived threat. Piracy is defined as any illegal act of violence, detention, or destruction committed by the crew or passengers of a private vessel against another vessel or persons/property on board, outside any country's territorial waters. Hotspots for piracy include the coasts of Indonesia, Somalia, Bangladesh, Nigeria and some South American countries. Insurance coverage for yachts usually has restrictions on cruising areas, and breaching these restrictions may void coverage . Insurers have a broader definition of piracy than the legal definition, as attacks are more likely to occur within territorial waters. Obtaining up-to-date information on current piracy hotspots is crucial, and insurers and maritime security firms can provide assistance. Piracy is defined internationally by the United Nations Convention on the Law of the Sea, Articles 101–103. Although local laws may add to this definition, the crime essentially consists of: Any illegal act of violence, detention, or destruction, Committed for private ends, By the crew or passengers of a private vessel, Against another vessel or against persons or property on board another vessel, Which is outside any country’s territorial waters; or Any act of inciting or intentionally facilitating such an act. HOTSPOTS Attacks are logged on the website of Commercial Crime Services (CCS), a division of the International Chamber of Commerce. Currently, while the principal hotspots are to be found off the coasts of Indonesia, Somalia, Bangladesh and Nigeria, acts have been committed off the coasts of various South American countries and even in the Caribbean. INSURANCE Insurers are usually very strict about where yachts can and cannot cruise while remaining covered. Any breach of these restrictions will allow them to escape paying out in the event of a claim for absolutely anything. Once the owner has decided where he or she wishes to cruise, this must be disclosed to the insurer if it is outside the area permitted in the policy, and additional cover negotiated – the cost of which will reflect any perceived increase in risk. In common with the IMB, the definition of ‘piracy’ used by insurers is generally much wider than that given above. This is fortunate since, statistically, attacks are more likely to occur within a state’s own territorial waters – i.e. within 12 nautical miles of the adjacent shoreline. Although piracy risks are specifically covered by the standard ‘Institute Yacht Clauses (1/11/85)’, which are the most commonly-used first-party insurance terms, the risks should still be discussed with the broker anyway. Where, unusually, the policy is not subject to English law, then it may be prudent to take independent legal advice. INFORMATION Patterns of worldwide piracy fluctuate with the political stability and, to a lesser extent, the economic fortunes of adjacent states. It is imperative to obtain up-to-date advice on where the current trouble spots are. Insurers can help with this, although specialist maritime security firms can often provide more detailed information. It should be noted that the security industry is not well regulated in some countries, and firms’ services vary in quality. DEFENCE Although the advice to all yachts travelling in high-risk areas is to maintain particular vigilance, and defences such as acoustic defence systems, satellite-alert systems and strong-rooms are options, the question most commonly raised is whether weapons are, legally, an option. To decide what’s legal and what’s not, it’s necessary to know which countries’ laws apply to any given situation. One needs to consider both the ‘Flag State’ law and the ‘Port State’ law. The Flag State law is the law of the country where the yacht is registered: it governs what happens on board the yacht, wherever in the world the yacht is located, as if the yacht was a small, floating piece of that country. The Port State law is that of the country in whose territorial waters the yacht is located – not just in or around any particular port. EQUIPMENT To take the example of one of the most popular Flag States, the United Kingdom, weapons may kept on board, but not all types. Under the Firearms Act 1968, as amended, firearms (including shotguns) and associated ammunition normally require a licence for purchase and possession. A firearm and ammunition, however, can be possessed on board a yacht, if it forms part of that yacht’s ‘equipment’, without the need for such a licence. A police permit is still needed to bring the firearm to and from the yacht, and a licence required to purchase the firearm in the first place. Section 5 of the same Act still outlaws some weapons altogether for the general public, including: Automatic and semi-automatic weapons, Pump-action weapons, Pistols, other than flare guns, Rocket launchers, other than those used for line-throwing or signalling, Air guns using gas cartridges, and Pepper sprays, TASER®s, etc. Port States will have their own laws relating to possession and disclosure. Researching and complying with these can be difficult and expert advice is a must. ACTION Clearly, there is no point in having weapons on board unless someone is prepared to use them. Introducing them into the equation might change a confrontation into a shoot-out. Guns in untrained hands are not an option. It is also very difficult to work out in advance what the legal consequences of firing shots might be. Thankfully, this choice can be neatly sidestepped by placing a specialist security team on board just for the necessary passages. Shooting at someone whilst they are on another vessel potentially constitutes an act of violence committed on both vessels. The shooter will therefore be subject to the laws of both Flag States, plus that of the Port State if the shooting occurs within 12 nautical miles of the coast (although this limit may not be respected in all countries). Looking by way of example at the UK criminal law, which is followed in much of the world, the raising of a weapon at a suspected pirate, who in fact wasn’t, could constitute an ‘assault’, i.e. putting someone in fear of violence. Shooting a pirate (or otherwise harming him) could lead to charges of grievous bodily harm, where serious injury is caused. Where the pirate is unintentionally or intentionally killed, manslaughter or murder charges could follow. Obviously, a number of defences could be put forward in response, the most useful of which would be self-defence or the defence of another. The accused would not need to have retreated as far as possible before the act of self-defence. Indeed, an act of self-defence or the defence of another may be pre-emptive, given reasonable apprehension. If the threat of force would have been enough, it may be unreasonable to go ahead and use force. If one person on a yacht is threatened, all are can be seen as having been threatened. The force used in self-defence or in the defence of another must be ‘reasonable’ in the circumstances as the accused saw it. What is reasonable would be up to the jury and difficult to predict. The main practical problem is recognising whether or not the yacht is faced with pirates. Until they raise a weapon in your direction or commit any act of violence against anyone, they are just other seafarers. Attack first, and you risk becoming the pirate. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Going Dark Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Going Dark