AIS was created as a safety tool. But somewhere along the line, something changed. Today, an industry exists to collect, archive and monetise vessel location data. For commercial shipping, that raises few eyebrows. But large yachts are part-time floating homes often associated with identifiable individuals, families and children. Drawing on legislation, human rights judgments, and celebrity privacy cases, this article examines where maritime safety ends and perpetual surveillance begins. Home Handbook Managing / / The Right to Vanish 19 May 2026 Last revised minutes 9 Reading time AIS was created as a safety tool. But somewhere along the line, something changed. Today, an industry exists to collect, archive and monetise vessel location data. For commercial shipping, that raises few eyebrows. But large yachts are part-time floating homes often associated with identifiable individuals, families and children. Drawing on legislation, human rights judgments, and celebrity privacy cases, this article examines where maritime safety ends and perpetual surveillance begins. minutes 9 Reading time 19 May 2026 Last revised AIS was created as a safety tool. But somewhere along the line, something changed. Today, an industry exists to collect, archive and monetise vessel location data. For commercial shipping, that raises few eyebrows. But large yachts are part-time floating homes often associated with identifiable individuals, families and children. Drawing on legislation, human rights judgments, and celebrity privacy cases, this article examines where maritime safety ends and perpetual surveillance begins. AIS was created for navigation safety, not global public tracking. Yacht location data may qualify as personal data under UK GDPR where a yacht is closely associated with an identifiable owner, family or crew. Publishing real-time yacht locations may lack a lawful GDPR basis. Human rights and privacy law increasingly protect individuals against location surveillance. Public figures retain privacy rights despite wealth, fame or media attention. Courts may eventually decide when maritime transparency becomes unlawful surveillance. Human rights and privacy law increasingly protect individuals against location surveillance. Public figures retain privacy rights despite wealth, fame or media attention. Courts may eventually decide when maritime transparency becomes unlawful surveillance. AIS was created for navigation safety, not global public tracking. Yacht location data may qualify as personal data under UK GDPR where a yacht is closely associated with an identifiable owner, family or crew. Publishing real-time yacht locations may lack a lawful GDPR basis. It’s said that while money shouts, wealth whispers. And there was a time when you could sail quietly away to enjoy secluded adventure. No online tracking. No voyeurs or bad actors following your movements in real time. That’s all gone. Today, modern superyachts glide across the oceans leaving an invisible digital trail like a tin can tied to a wedding car. Every movement, every anchorage, every discreet arrival is vacuumed up, republished and monetised by online AIS tracking platforms. You could, of course, pull the plug. Some do. But that’s not lawful and there may be insurance repercussions if switching off were to be a contributory factor in a collision. So, that aside, what rights do owners have to vanish? USEFUL KIT AIS was not designed as a global voyeurism product. It’s a navigational tool. All yachts of 300 gross tonnage or more and engaged on international voyages must be fitted with Class A AIS equipment (per Regulation 19 of Chapter V of SOLAS). It enhances safety and security. By broadcasting key information through short-range radio signals to nearby vessels, it supplements the picture produced by radar, so enhancing traffic awareness. Many of the problems common to radar, such as clutter, do not affect AIS. So it’s also used in search and rescue operations. So far, so sensible. A HARMLESS HOBBY? There’s a comforting assumption that if something is broadcast, it’s public and you’re entitled to hoover this information up, monetise it if you want, then post it online with complete moral serenity. After all, tracking aircraft, like trainspotting, is harmless enough. But AIS’s core purpose is nearby safety, not global stalking. Commercial ships exist to trade. Ferries exist to transport passengers. Tugs, dredgers and offshore support vessels exist to work. Superyachts, by contrast, exist for one purpose only: private leisure. They are not mere transport assets. They are floating private residences, often carrying owners, families, children, guests and crew in circumstances that are deeply personal and deliberately secluded. Where a vessel is commonly associated with an individual, then it becomes a proxy for that person. The location data is thereby also – crucially – personal data. ENTER GDPR The General Data Protection Regulation (GDPR) is a comprehensive data protection law enacted by the European Union (EU) to safeguard the personal data within the EU and the European Economic Area (EEA). The UK’s own version of GDPR was retained in domestic law post-Brexit by virtue of the Data Protection Act 2018 . And data in respect of an individual’s location is undoubtedly ‘personal data’. Article 4(1) of UK GDPR defines personal data as “ any information relating to … an identifiable natural person … who can be identified, directly or indirectly, in particular by reference to an identifier such as … location data ”. So AIS data can become personal data when there’s a sufficient link to a habitual individual user, or even a crewmember, because of, for example, credible media reports. It becomes pattern-of-life information which can be used to map the movements of individuals. LAWFUL BASIS Under Article 6 of UK GDPR, every single act of processing personal data (such as posting online) must have a lawful basis. You cannot simply decide that because information is technically available, you can do whatever you like with it. There are six lawful bases under Article 6(1): Consent : has the owner consented to having their real-time location posted and published? Obviously not. They have not been asked. They have not consented. Contract : is there a contract? Of course not. Legal Obligation : is there a law requiring the publishing of a private individual's real-time location? Nope. Vital Interests : is publication necessary to save a life? Another no. Public Task : is the person posting this data a public authority exercising a public function? Unless the poster is, say, the coastguard, then this basis doesn't apply. Legitimate Interest : is publication necessary for legitimate interests of the publisher or a third party? This is the publisher’s last chance saloon. What legitimate interest could be invoked for posting someone's real-time location? Maritime safety? The vessel is already broadcasting AIS for that purpose. Reposting online adds nothing. Curiosity? Entertainment? These are not ‘legitimate interests’ in the legal sense. And crucially, even where there is a legitimate interest, the balancing test must be passed. The data subject's rights are weighed in the scales. Real-time, continuous disclosure of a specific person's location is a highly significant privacy intrusion. The scales would need something very substantial on the other side to tip them the other way. FURTHER HURDLES Even if a lawful basis were somehow established, the processing would still need to comply with the data protection principles in Article 5 of UK GDPR. These include: Lawfulness, Fairness & Transparency : publishing someone's location without their knowledge is not transparent. Whether it is fair is highly context-dependent, but continuous real-time location disclosure is unlikely to pass muster. Purpose Limitation : data must be collected for specified, explicit and legitimate purposes, and not further processed in a manner incompatible with those purposes. AIS data is broadcast for maritime safety. Republishing it to reveal an individual's location for non-safety purposes is incompatible with that original purpose. The vessel owner did not switch on their AIS transponder so that strangers on the internet could track their movements. Storage Limitation : data should not be kept longer than necessary. If an archive of a person's historical movements is being maintained, this requires separate justification. Data Minimisation : only data adequate, relevant, and limited to what is necessary may be processed. Real-time, continuous, geographically precise location tracking of a specific individual is the opposite of minimisation. HUMAN RIGHTS The European Convention on Human Rights ( ECHR ) is an overriding international treaty, protecting human rights and fundamental freedoms in Europe. All member states of the Council of Europe, including the UK and EU countries, are bound by the ECHR. Under Article 8 of the ECHR, everyone’s private and family life must be respected. The European Court of Human Rights, which oversees compliance with the ECHR, has stated in Uzun v Germany that GPS surveillance would via GPS would amounted to an interference with someone’s private life, as protected by Article 8, unless safeguards were put in place and the surveillance was targeted, proportionate and justified by strong public interests (such as a serious criminal investigation in that case). In the subsequent Shimovolos v Russia judgment the Court confirmed that, “ Collection, through a GPS device attached to a person’s car, and storage of data concerning that person’s whereabouts and movements in the public sphere was also found to constitute an interference with private life ”. Admittedly, these cases concerned state surveillance rather than yacht websites. But the principle is unmistakable: location data is intrinsically sensitive. MISUSE OF PRIVATE INFORMATION The misuse of private information is also a distinct civil wrong, according to Google v Vidal-Hall , liability for which is determined on the basis of whether the claimant has an objective, reasonable expectation of privacy in respect of the data. Clearly, any yacht owner has just such an expectation. The victim doesn't have to rely on data protection law at all: they can go straight to court on the grounds that their reasonable expectation of privacy has been violated, with claimants receiving damages for the loss or diminution of the right to control their private information, independently of any distress caused. CELEBRITY PRIVACY But to what extent does placing oneself in the public spotlight erode the right to privacy? In Campbell v MGN supermodel Naomi Campbell successfully sued the Daily Mirror for publishing details of her treatment at a narcotics clinic. The court established that being a public figure means you must tolerate some additional scrutiny but that does not extend to unlimited surveillance of your private movements and personal life. The Campbell test is: Does the individual have a reasonable expectation of privacy? If he or she does, is that privacy interest outweighed by a competing interest, such as freedom of expression or public accountability? A famous superyacht owner, sailing on their own vessel, clearly expects privacy, it’s very hard to see how this could be outweighed by any competing interest. In the subsequent case of Murray v Big Pictures author JK Rowling was out walking with her infant son, when they were photographed and those images were published in the Sunday Express. The court held that the son had a reasonable expectation of privacy even when out and about in a public place. Here, the targeted surveillance of the son beforehand mattered enormously. AIS data which can be used to track an individual's real-time location is precisely this sort of targeted surveillance. UNLAWFUL INTERCEPTION Finally, there is also an overlooked technical issue lurking beneath the surface: interception law. In the United Kingdom, it is an imprisonable criminal offence, under section 48 of the Wireless Telegraphy Act 2006, to intercept without lawful authority a communication in the course of its transmission by means of a public telecommunication system - including VHF radio signals produced by AIS equipment. CONCLUSION So where does this leave us? AIS itself is not the villain. It is a sensible, important safety system:. The problem begins when information emitted for collision avoidance is scooped up, archived, enriched, monetised and republished to a global audience, transforming a navigational aid into a perpetual surveillance mechanism. The law distinguishes between availability and permissibility. Merely because data can be obtained does not mean it may lawfully be gathered and posted online. The courts have been consistent and clear: precise location data attached to identifiable individuals is inherently sensitive and deserving of protection. The argument that the information is already pubic doesn’t wash. By that logic, one might argue that because someone drives on public roads, their every journey may be catalogued indefinitely and provided to strangers. Courts have shown little enthusiasm for such reasoning. The seas remain vast. Solitude remains valuable. The question the courts may yet have to answer is surprisingly simple: when does maritime transparency stop being safety, and start becoming surveillance? Please contact us if you have any privacy concerns. 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

Unavailable at present Latest Position Yachts & More Listing Email WhatsApp +44 7773 246 246 Central Agent 46 m Length Placeholder Yards Builder 2016 Build year 499 Gross tonnage Cayman Islands Registry Particulars Exemplar

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

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 27 m Length Finest Craft Builder 1999 Build year 240 Gross tonnage United Kingdom Registry Particulars Forerunner

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 96 m Length Builder & Co Builder 2021 Build year 1400 Gross tonnage Italy Registry Particulars Pattern

Preparing the crew for the sale of your yacht is an essential part of the selling process. Tact and transparency are key to ensuring that crewmembers play their part in a swift sale. A lack of cooperation on the part of crew can make marketing that much harder, while a disgruntled crewmember can potentially bring the sale process to a halt. With a good chance of being re-employed by the buyer, crew should be encouraged to see the sale process as a recruitment opportunity, and a normal part of a career afloat. Home Handbook Selling / / Preparing Your Crew 29 January 2025 Last revised minutes 7 Reading time Preparing the crew for the sale of your yacht is an essential part of the selling process. Tact and transparency are key to ensuring that crewmembers play their part in a swift sale. A lack of cooperation on the part of crew can make marketing that much harder, while a disgruntled crewmember can potentially bring the sale process to a halt. With a good chance of being re-employed by the buyer, crew should be encouraged to see the sale process as a recruitment opportunity, and a normal part of a career afloat. minutes 7 Reading time 29 January 2025 Last revised Preparing the crew for the sale of your yacht is an essential part of the selling process. Tact and transparency are key to ensuring that crewmembers play their part in a swift sale. A lack of cooperation on the part of crew can make marketing that much harder, while a disgruntled crewmember can potentially bring the sale process to a halt. With a good chance of being re-employed by the buyer, crew should be encouraged to see the sale process as a recruitment opportunity, and a normal part of a career afloat. Cooperation is crucial. The sale of a yacht typically requires terminating existing crew employment. Early engagement with the captain ensures crew cooperation, vessel upkeep, and a smooth transition. Buyers prefer a clean purchase. Rather than acquiring the owning company (which may have hidden liabilities), buyers usually re-register the yacht, necessitating crew redundancies. Most crew members are legally considered employees, though specialist technicians may be independent contractors with different rights. Employers must consult crew about redundancy, both individually and collectively if 20+ jobs are affected. Written notifications and meeting records are essential. Notice depends on service length, but if immediate sale is required, pay in lieu of notice may be agreed. Crew with at least two years’ continuous service are entitled to redundancy pay, calculated based on age, service duration, and salary. Under the Maritime Labour Convention (MLC) 2006, employers must cover costs for returning crew home, including travel and accommodation. Crew Release Letters, signed by crew confirming receipt of all owed payments, help protect sellers from future claims. Employment Tribunal claims remain a risk. Notice depends on service length, but if immediate sale is required, pay in lieu of notice may be agreed. Crew with at least two years’ continuous service are entitled to redundancy pay, calculated based on age, service duration, and salary. Under the Maritime Labour Convention (MLC) 2006, employers must cover costs for returning crew home, including travel and accommodation. Crew Release Letters, signed by crew confirming receipt of all owed payments, help protect sellers from future claims. Employment Tribunal claims remain a risk. Cooperation is crucial. The sale of a yacht typically requires terminating existing crew employment. Early engagement with the captain ensures crew cooperation, vessel upkeep, and a smooth transition. Buyers prefer a clean purchase. Rather than acquiring the owning company (which may have hidden liabilities), buyers usually re-register the yacht, necessitating crew redundancies. Most crew members are legally considered employees, though specialist technicians may be independent contractors with different rights. Employers must consult crew about redundancy, both individually and collectively if 20+ jobs are affected. Written notifications and meeting records are essential. For clarity’s sake, we’re going to look at the case of United Kingdom law, which applies to any UK-registered yacht, or any vessel operating for the UK, or to any crewmember operating from the UK (which is very broadly defined). Similar rules apply to other Red Ensign vessels. COOPERATION Buyers will usually want to buy the yacht, rather than its owning company, and re-register it in the name of their new owning company – enough though this is a more complex route than simply transferring company shares. There are various reasons for this, but the most important is that an owning company’s debts, lawsuits, unpaid taxes and other obligations may not be immediately apparent. Debts can still attach to a yacht directly, but at least such risks are minimised. The upshot of this is that the existing crew’s employment has to come to an end. But they can’t simply be ‘let go’. There are legal and financial obligations that sellers must meet ahead of the sale. As soon as you’re minded to sell your yacht, you or your representative needs to discuss this with your captain(s) to ensure their full engagement and cooperation. The captain will be instructed to disseminate this information to the crew. The vessel must look her best for photoshoots, and the pre-purchase survey must not highlight missed maintenance. Recruitment is an expensive process for buyers. Re-hiring makes sense – especially in the case of engineers who will know the vessel’s systems and technical idiosyncrasies better than anyone, but the existing crew’s expectations need to be managed. The marketing period is their opportunity to shine. STATUS Nearly all crew will, as a matter of law, have the status of employee – but this isn’t always the case. Specialist technicians might be engaged on board in respect of a specific project, but they’re likely to be contractors and won’t have the same rights. CONSULTATION With redundancy on the horizon, employers are obligated to consult with crewmembers, both on an individual basis – and a collective one if 20 or more are to lose their jobs. This is not just a formality; it's about ensuring a transparent and fair process. For both types, employers should provide a written notification of any potential redundancy, and a representative should discuss the situation in person – with records of this kept. NOTICE How much notice period is required depends on the length of service, i.e. 1 week’s notice for 1 month to 2 years of service, 1 week’s notice per year of service for 2 to 12 years17, and 12 weeks’ notice for 12 or more years of service. If the employment contract specifies a longer notice period then this must be honoured. Of course, this is a problem where the sale of a yacht is to complete within a short timeframe. So, employers can offer pay in lieu of notice if the contract allows for this, or otherwise the amount will be that which is mutually agreed. REDUNDANCY PAY Employees who have at least two years’ continuous service will be eligible for redundancy pay, calculated on the basis of age, length of service and pay. REPATRIATION Repatriation is an essential seafarer’s right, enshrined in the Maritime Labour Convention (MLC) 2006. Employers are obligated to cover all costs including travel, accommodation, and subsistence until the individual is safely home. The home country should be stated in the employment agreement, and if that’s where the vessel is then the crewmember will have been repatriated simply by stepping off the passerelle. RECORDS While the importance of record-keeping throughout cannot be over-emphasised, the most important documents to obtain are the Crew Release Letters. Drafted by the seller’s lawyer, these are addressed to the seller and signed by each crewmember, confirming that they have received everything owed to them and have not claim against the owning company or the yacht. Once signed, while not a complete bar to legal action, this provides the best evidence that the crewmember concerned has no claim against the seller. The provision of a full set of such from each and every crewmember is likely to be a condition of the sale, so a refusal to provide one can be disruptive. Crewmembers can also bring a later claim in an Employment Tribunal. This is a public forum, akin to a court, in which beneficial owners can be – and have been – named. PREPARE EARLY For a long time, it was assumed that if crew didn’t like the fact that the yacht was being sold then that was simply tough luck. But, with easier access to advice, and with seafarer unions (especially Nautilus ) more willing to act on behalf of individual members, it is important to prepare crew for a sale as early and fully as possible. 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 the Paperwork Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Preparing the Paperwork

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 29 m Length Placeholder Yards Builder 2001 Build year 160 Gross tonnage Cayman Islands Registry Particulars Symbol

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

Unavailable at present Latest Position Superyachts'R'Us Listing Email WhatsApp +44 7773 246 246 Central Agent 33 m Length DMS & Co Builder 2017 Build year 350 Gross tonnage Malta Registry Particulars Display

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

It’s important to understand the yacht insurance claims process, in advance of an incident, to make sure that underwriters have no excuses when it comes to the crunch. If you’re an owner reading this because your yacht has just been involved in an incident, then you should contact us right away to make sure that you’re taking the appropriate advice. Home Handbook Insuring / / Making A Claim 18 May 2023 Last revised minutes 4 Reading time It’s important to understand the claims process, in advance of an incident, to make sure that underwriters have no excuses when it comes to the crunch. If you’re an owner reading this because your yacht has just been involved in an incident, then you should contact us right away to make sure that you’re taking the appropriate advice. minutes 4 Reading time 18 May 2023 Last revised It’s important to understand the claims process, in advance of an incident, to make sure that underwriters have no excuses when it comes to the crunch. If you’re an owner reading this because your yacht has just been involved in an incident, then you should contact us right away to make sure that you’re taking the appropriate advice. You must notify the underwriter, through your broker if your're using one, of a loss - and provide evidence within a specified time frame or (if none) a reasonable period. You should take reasonable steps to minimize the loss in the event of an incident. You are responsible for proving the amount and scope of the loss and that it was caused by a covered peril. Both you and the underwriter have obligations of cooperation during the claims process. Underwriters must pay valid claims within a reasonable timeframe, and delays may result in additional damages payable to you. Subrogation allows the underwriter to recover money paid to the insured from the third party responsible for the loss. Settlements reached with the underwriter can be invalidated if fraudulent misrepresentation by the insured is later discovered. Double insurance can occur when both the yacht and its tender are insured separately, requiring coordination between insurers. Independent advice may be necessary, as your interests anf those of the underwriter are not aligned. You must not jeopardize the underwriter's subrogation rights by settling or abandoning a claim against a third party. Subrogation allows the underwriter to recover money paid to the insured from the third party responsible for the loss. Settlements reached with the underwriter can be invalidated if fraudulent misrepresentation by the insured is later discovered. Double insurance can occur when both the yacht and its tender are insured separately, requiring coordination between insurers. Independent advice may be necessary, as your interests anf those of the underwriter are not aligned. You must not jeopardize the underwriter's subrogation rights by settling or abandoning a claim against a third party. You must notify the underwriter, through your broker if your're using one, of a loss - and provide evidence within a specified time frame or (if none) a reasonable period. You should take reasonable steps to minimize the loss in the event of an incident. You are responsible for proving the amount and scope of the loss and that it was caused by a covered peril. Both you and the underwriter have obligations of cooperation during the claims process. Underwriters must pay valid claims within a reasonable timeframe, and delays may result in additional damages payable to you. In order to receive payment or obtain the benefit(s) specified in the contract, the insured must inform the underwriter that it has experienced a loss that it believes is covered by the contract, and provide evidence demonstrating that their claim is indeed covered by the contract. A specific claims procedure may be set out in the contract. Written notice may be required – which may need to be in a particular form. Notice must be given within any specified time frame, or otherwise within a reasonable period. If the notice provision is considered a condition precedent, the underwriter may be able to deny liability. CAUSATION The insured is normally responsible for proving, on a balance of probabilities: The amount and scope of their loss; and That their loss was ‘proximately caused’ by a peril covered by the policy, unless the policy states that the loss may be ‘directly or indirectly’ caused by such a peril (or similar). Quite often, losses involve a chain of events, one or more of which are excluded from coverage. Generally, if there are two proximate causes of loss, one covered and one not covered, the underwriter will be on the hook for that loss. But if the insured cannot establish which peril (covered or not covered) caused the loss, or if none of the causes appear inherently likely, there will be no coverage. DUTY TO CO-OPERATE The insurance contract normally obligations of cooperation for both the insured and the underwriter when a claim is filed. In the case of a liability policy, the underwriter is generally required to negotiate with third party claimants in good faith, taking into account the insured's best interests – and, if necessary, assume responsibility for defending against a third party claim. The insured, meanwhile, must not admit liability without the underwriter's consent – and must obtain the underwriter's approval before settling a third party claim. PAYING CLAIMS Underwriters must pay valid claims within a ‘reasonable’ timeframe. If there is a delay or failure to pay, the insured can sue for damages for any additional losses suffered. It’s up to the insured to establish that the payment was only made after an unreasonable delay. Where the underwriter has reasonable grounds to dispute the claim, the manner in which it handles the claim can be a relevant factor in determining whether the implied term of timely payment was breached. SUBROGATION When an underwriter pays out money to an insured under an indemnity policy, such as Hull & Machinery , the rules of ‘subrogation’ allow the underwriter to recover all or part of that money from the third party who caused the loss. Subrogation means that the underwriter can step into the insured's shoes and pursue the third party itself, seeking to recover what it’s just paid out. The underwriter can not only claim the rights of the insured but also any benefits awarded by a court, such as interest on judgment debts and costs. The right of subrogation can be explicitly stated in the insurance contract, but it is also a pre-existing legal right. As set out above, it is essential for the insured not to jeopardize the underwriter's subrogation rights by settling or abandoning the claim against the third party, as this could lead to the underwriter seeking damages from the insured. FRAUDULENT CLAIMS Underwriters are always alive to the possibility of fraud. They’re seen it all before. Even where a settlement has been reached between underwriter and insured, this can be invalidated where it’s later shown that there was a fraudulent misrepresentation by the insured. Underwriters have the option to terminate the insurance contract from the date of the fraudulent act - without refunding any premiums. This means that the underwriter can refuse liability for genuine losses or claims made after the fraudulent act. Claims made before the fraudulent act will be unaffected. DOUBLE INSURANCE Recent years have seen a rise the use of support yachts, carrying large tenders and helicopters. If close attention isn’t paid to the policies of both yacht and tender (itself often a large motor yacht), it is possible to end up in a situation where the tender is ‘double insured’. In the event of a loss, the insured generally has the freedom to choose under which policy to claim payment. However, this is subject to the terms and conditions of each insurance contract, and some policies may prevent the making of a claim if there is other insurance covering the same risk. Double insurance does not provide additional protection to the insured. Instead, it may complicate the claims process and require coordination between multiple insurers. If an underwriter pays out a claim under an insurance policy, it may have the right to seek a contribution from another underwriter that provided coverage for the same loss. CONCLUSION Should any incident ever arise, potentially involving damage to the yacht or liability to a third party, sitting back is not an option. The insured is usually under an express obligation to notify the underwriter, and do everything reasonable to minimise the loss. The advice of the underwriter or broker, at the initial stages of an incident, is therefore vital, but the interests of underwriter and insured not being one and the same, and it will be prudent for you to take independent advice, right away. 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 Who's Who Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Who's Who

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Without sufficient security in place, having provided a loan to a shell company to buy an expensive, mobile asset, lenders could be left out-of-pocket and finance would be impossible to obtain. While loan security can be found in various documents, the requirements themselves can always be traced back to the loan agreement. Home Handbook Financing / / Loan Security 4 April 2017 Last revised minutes 6 Reading time Without sufficient security in place, having provided a loan to a shell company to buy an expensive, mobile asset, lenders could be left out-of-pocket and finance would be impossible to obtain. While loan security can be found in various documents, the requirements themselves can always be traced back to the loan agreement. minutes 6 Reading time 4 April 2017 Last revised Without sufficient security in place, having provided a loan to a shell company to buy an expensive, mobile asset, lenders could be left out-of-pocket and finance would be impossible to obtain. While loan security can be found in various documents, the requirements themselves can always be traced back to the loan agreement. Unpaid crew, suppliers, and collision victims have liens over yachts, creating competing claims for lenders. Port authorities can detain a yacht for unpaid dues, further complicating the lender's position. Yards can have possessory liens on yachts if the owner hasn't paid for works carried out. Mortgages grant lenders rights against the yacht itself in the event of default, and they are the most important type of security. Mortgage registration is essential, either as a statutory mortgage or a common law mortgage, to establish priority and enforceability. Covenants and assignments supplement the mortgage document and dictate obligations and transfers of rights. Deeds of covenant and collateral security documents cannot be registered but are still important for additional protection. Non-statutory mortgages serve as a backup when statutory mortgages are invalid, but they have limitations in enforcement. Yacht registration is required, and the deed ensures the yacht remains registered throughout the mortgage term. Insurance covenants are crucial, and policies must cover the yacht and third-party liabilities to safeguard the lender's interests. Covenants and assignments supplement the mortgage document and dictate obligations and transfers of rights. Deeds of covenant and collateral security documents cannot be registered but are still important for additional protection. Non-statutory mortgages serve as a backup when statutory mortgages are invalid, but they have limitations in enforcement. Yacht registration is required, and the deed ensures the yacht remains registered throughout the mortgage term. Insurance covenants are crucial, and policies must cover the yacht and third-party liabilities to safeguard the lender's interests. Unpaid crew, suppliers, and collision victims have liens over yachts, creating competing claims for lenders. Port authorities can detain a yacht for unpaid dues, further complicating the lender's position. Yards can have possessory liens on yachts if the owner hasn't paid for works carried out. Mortgages grant lenders rights against the yacht itself in the event of default, and they are the most important type of security. Mortgage registration is essential, either as a statutory mortgage or a common law mortgage, to establish priority and enforceability. At the outset, it’s important to note that, with regards the yacht, the lender can still be left competing with the following who may automatically have claims against a yacht – which is why security has to be so wide-ranging: Unpaid crew and suppliers, collision victims, etc, all have liens over yachts Port authorities can have a statutory right to detain a yacht for unpaid dues Yards can have possessory liens where works have been carried for which the owner hasn’t paid: where the yacht is out of the water, it’s a case of no-cash-no-splash MORTGAGES A mortgage grants a lender (the ‘mortgagee’) rights against the yacht itself (known as rights ‘in rem’), rather than just against the owner (the ‘mortgagor’) in the event of default. While it still needs to be beefed-up by other types of security, such as covenants, and assignments of earnings and insurances, the mortgage is the most important type of security taken by a lender. Mortgages over yachts are known as ship mortgages to distinguish them from real estate mortgages. A mortgage can be taken over the whole yacht or just a number of the 64 available shares. MORTGAGE REGISTRATION The mortgagee’s power to sell the yacht in the event of default is specifically granted by statute. A mortgage is said to be ‘statutory’ where it has been set out and registered as prescribed by statute (in this case, regulation 57 of, Merchant Shipping (Registration of Ships) Regulations 1993 (SI 1993/3138) and paragraph 7 of Schedule 1 to the Merchant Shipping Act 1995. Otherwise, they are known as ‘common law’ mortgages but these are very unusual. A statutory mortgage can only be created over a yacht registered under Part I (but not the Part III ‘Small Ships Register’). The mortgagee will likely use a Form 4736 ‘Account Current’ statutory mortgage to secure not just the principal sum and interest but also costs and expenses. A Notice of Mortgage Intent MSF 4739 can be lodged in advance in order to record as early a date as possible for the mortgage: this is important when establishing the priority of debts in the event of later default. The mortgage is a brief document, just setting out the names of the parties, details of the yacht, and a short description of the secured obligation with reference to the agreement and the deed of covenant that supplements the mortgage. It must be lodged with the Registrar General of Shipping and Seamen, and the relevant fee paid. The Registrar will the register and returned the mortgage document. Where the mortgagor is a company registered in England and Wales, then, by virtue of section 860 of the Companies Act 2006, details of the statutory mortgage, the deed of covenant and any other security documents must be sent to the Registrar of Companies within 21 days, failing which such documents will be void as against a creditor, liquidator or administrator. COVENANTS & ASSIGNMENTS As the mortgage document itself is so brief, and there’s no scope for amending or adding to it, and also as the mortgage attaches to the yacht rather than the owner, it must be supplemented by covenants and assignments. Covenants dictate various dos and don’ts, and may be set out in the loan agreement and/or separately in a deed of covenant according to the lender’s house style. Assignments transfer rights from one party to another. The remainder of this article considers common covenants and assignments. For convenience, it is assumed that all covenants are set out in a deed. Unlike mortgages, deeds of covenant, and any other collateral security documents, cannot be registered with the Registrar of Ships. NON-STATUTORY MORTGAGE While a deed supports the mortgage, deeds can still have a clause by which the yacht is mortgaged. This is needed as a backup in case the statutory mortgage is invalid – which can be the case where, for example, the mortgage hasn’t been registered with the Companies Register. The deed will create a non-statutory mortgage which, while better than nothing, won’t be enforceable against a buyer who buys in good faith and isn’t aware of the mortgage, and will be ranked below a statutory mortgage should the mortgagor default. YACHT REGISTRATION The mortgagor will promise in the deed the yacht will be registered as a ship in the United Kingdom, and will remain, so, under the same registered name, for as long as the yacht is mortgaged. This is necessary as UK Part I ship registrations expire after only five years unless renewed. CHARGE REGISTRATION The deed will require, where the owner is a company registered in England or Wales, the mortgage to be registered as a charge with the United Kingdom companies register (known as Companies House). This is fallback requirement as the mortgagee isn’t going to leave anything to chance and will (or should) have registered the mortgage as soon as possible as not doing so risks the mortgagee loosing both the security and priority. INSURANCE Arguably just as important as the mortgage is the borrower’s covenants in respect of insurance, and policy assignments. In particular, the borrower covenants to: At the borrower’s expense, insure the yacht, for a value, on terms, and with an underwriter(s), all agreed with the lender. Comply with all policy terms throughout the term of the loan, including, of course, prompt payment of insurance premiums. Renew policies as needed to maintain cover. Not settle a claim without the lender’s consent It’s not only the yacht itself which must be insured, but third party liabilities which, if not satisfied, will expose the yacht itself to claims which might rank higher than the lender’s as mortgagee. Particular risks must also be covered, such as war risks, and mortgagee’s interest insurance. The latter provides cover where a failing on the borrower’s part means that other policies are rendered ineffective. For larger yachts, the policies must be assignable to the lender, and confirmation will have to be provided by underwriters that such assignments are noted on the policies and that proceeds of the insurance will be paid to the lender if necessary. For smaller yachts, it may be sufficient for the lender to be named as a co-assured on the policy. CLASSIFICATION SOCIETY An explanation as to the role of classification societies (often known as ‘class’) can be found here . Assuming the yacht must be classed, if the yacht isn’t maintained and surveyed as Class Rules stipulate, the yacht is said to be ‘out of class’ – which can lead to insurance policies being invalidated, as well as the yacht not being maintained properly. As this would jeopardise the mortgagee’s security, the deed of covenant will stipulate maintenance in class. REGULATORY COMPLIANCE Depending on the yacht’s length, gross tonnage and whether it’s registered for chartering, it will be subject to various regulations which help ensure it’s used safely. H ere’s a summary of those affecting your yacht . As well as being detained by port officials, non-compliance can render insurances void, which has obvious implications for the mortgagee’s financial security. Compliance with such regulations will be a key provision. INSPECTION As Class rules and flag state regulations only help to ensure the safe construction, maintenance and operation of the yacht, the mortgagee will want to have the opportunity to inspect the vessel to ensure that aesthetic aspects, and with them much of her value, are also being maintained. The mortgagee must therefore have a right to inspect, and this can be supported by a specific minimum value. MANAGEMENT While ‘yacht management’ can cover a broad spectrum of support services, regulations may require management of a specific type and quality, failing which the vessel may be off-cover for insurance purposes and liable to detention following a port state inspection. Managers also vary in approach and quality. Unsurprisingly, therefore, mortgagees will want to approve which manager is appointed. OPERATIONS The mortgagee may wish to restrict the movement of the yacht, not only by stipulating that she is to be kept out of waters close to areas known for piracy or adjacent to unstable countries, but also away from areas where actions in the event of default may be difficult or impractical. It may also be necessary for the deed to spell out that the yacht is to be used in a legal way – for example, not chartering out where the yacht is not registered as a commercial vessel and insured accordingly. CHARTERING An assignment of chartering income (if any) can be a helpful tool for a lender looking to recoup money, especially while awaiting the sale of a yacht in the event of default. Written notice will need to be served on the charterers – which can be commercially awkward for the borrower and a good incentive to keep on track with loan repayments. INCIDENTS Where any kind of incident occurs involving the yacht, whether that be a fire, grounding, flooding, or a legal action such as arrest or other formal court proceedings, the mortgagee will want to know right away, and the deed of covenant will reflect this. Crucially, liens can rank higher than a mortgage. MODIFICATIONS Refits don’t always improve or even add value to yachts: an owner’s ‘personal stamp’ can adversely affect value and may not even be carried in compliance with regulations. The mortgagee will want to know about, and if necessary veto, any proposed modifications. DISPOSAL While obvious, it needs to be set out in the deed of covenant that the mortgagor cannot sell the yacht while it provides security. COLLATERAL SECURITY As well as the mortgage and deed of covenant, the lender may want a mortgage or charge over the shares in the yacht owning company, involving share certificates being deposited with the lender, together with signed but undated stock transfers. Going one stage further, the lender may also require a personal guarantee from the beneficial owner. 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 Enforcement Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Loan Enforcement

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From afar, buying a superyacht looks straightforward. You have money, and you wish to exchange it for a large, shiny boat. You browse websites, attend some yacht shows, view some vessels, shake hands and sign an agreement – et voilà – it’s yours. Except, of course, it isn’t that straightforward. Beneath the perfect teak decks is a matrix of interconnected systems, built and maintained in accordance with specifications and regulations, and run by a community of skilled seafarers. Home Handbook Buying / / You Need Help! 13 May 2026 Last revised minutes 5 Reading time From afar, buying a large yacht looks straightforward. You have money, and you wish to exchange it for a large, shiny boat. You browse websites, attend some yacht shows, view some vessels, shake hands and sign an agreement – et voilà – it’s yours. Except, of course, it isn’t that straightforward. Beneath the perfect teak decks is a matrix of interconnected systems, built and maintained in accordance with specifications and regulations, and run by a community of skilled seafarers. minutes 5 Reading time 13 May 2026 Last revised From afar, buying a large yacht looks straightforward. You have money, and you wish to exchange it for a large, shiny boat. You browse websites, attend some yacht shows, view some vessels, shake hands and sign an agreement – et voilà – it’s yours. Except, of course, it isn’t that straightforward. Beneath the perfect teak decks is a matrix of interconnected systems, built and maintained in accordance with specifications and regulations, and run by a community of skilled seafarers. Superyacht purchases demand specialised expertise beyond general business or negotiation experience. Epistemic trespassing causes confident decisions despite lacking essential yacht-specific knowledge or skills. Deferred maintenance, compliance, and operational realities often escape inexperienced yacht purchasers’ understanding. The Dunning–Kruger effect encourages misplaced confidence while concealing critical gaps in expertise. Successful owners recognise complexity and assemble strong multidisciplinary advisory and operational teams. Thorough due diligence, realistic budgeting, and scepticism reduce costly superyacht purchasing mistakes. The Dunning–Kruger effect encourages misplaced confidence while concealing critical gaps in expertise. Successful owners recognise complexity and assemble strong multidisciplinary advisory and operational teams. Thorough due diligence, realistic budgeting, and scepticism reduce costly superyacht purchasing mistakes. Superyacht purchases demand specialised expertise beyond general business or negotiation experience. Epistemic trespassing causes confident decisions despite lacking essential yacht-specific knowledge or skills. Deferred maintenance, compliance, and operational realities often escape inexperienced yacht purchasers’ understanding. WHAT'S TRESPASSING? In his eponymous 2019 paper, Nathan Ballantyne, Associate Professor of Philosophy at Arizona State University, defines what he calls ‘epistemic trespassing’. This is when someone who is an expert in one field trespasses into another – in which he or she lacks the knowledge and/or skills needed for good judgment, and yet confidently makes decisions anyway – leading to suboptimal outcomes. In other words: just because you are brilliant at making money, you’ll still need help when buying. And that, argues the professor, is exactly as it should be. Epistemology is just the term given to that branch of philosophy devoted to the study of knowledge: its nature, sources, justification, and limits. Epistemic expertise requires both sufficient knowledge and the skills required to use that knowledge properly. Being an ‘expert’ here doesn’t mean omniscience: experts can disagree with each other while still meeting the thresholds of knowledge and skill. FORMS OF TRESPASSING Specifically, trespassing takes one of the following forms: Having the skills but lacking knowledge. For example, you’re excellent at negotiations, but lack certain technical facts – such as the realities of deferred maintenance. Having knowledge but lacking the skills. For example, you’ll be shown the stability booklet but you haven’t got a clue what Hydrostatic Particulars are. Lacking both knowledge and skills. For example, you don’t know what you don’t know about class compliance or charter restrictions. Most trespasses occur due to the hybrid nature of the subject matter. So while you’ll be familiar with asset procurement, superyachts are a very different proposition to, say, real estate or aircraft. Similarly, your businesses may employ vast numbers of workers, but their rights and expectations will differ significantly from those of seafarers. The Dunning–Kruger effect also comes into play. This is the academic label applied to situations where people who lack knowledge are also oblivious to their inexperience, leaving them unreasonably confident in their judgment. It’s a ‘double curse’ of inability, plus an inability to detect that inability. Trespassers may have just enough knowledge to feel confident, but not enough to avoid error. NOT ALWAYS OBVIOUS Buy why isn’t trespassing obvious to the trespasser? Ballantyne has identified three main defences, which, in the context of a superyacht purchase, are as follows: You’re trespassing in a field whose experts’ opinions do not affect your conclusions. You might think that surveyors are pessimists, or that your crew can surely put things right later. You could be right. You could be wrong. We’ll see. You’re trespassing, but you think that you already have all the knowledge you need. You’ve seen from your own inspection that everything looks fine, so it probably is. But that’s not knowledge: it’s vibes. You’re trespassing, but you consider your existing skills to be sufficiently transferable and give you all the expertise you need. You’ll treat the purchase as just another deal to be completed, without sufficient though to the long term. Superyacht ownership is not simple. It is a sustained exercise in managing complexity across multiple domains simultaneously - technical, legal, regulatory, financial, operational, and interpersonal. The people who do it well are not the people who understand all of it themselves. They are the people who understand that they don't, and who surround themselves accordingly. PRACTICAL DOS AND DON'TS So now we know that trespassing is a recognised behavioural pattern, what are the resulting dos and don’ts when buying a superyacht? Here’s ten of each: Do: Accept that you’re an expert in many things – but not everything Put together a team, covering all aspects of the purchase, not just the technical, including legal and tax - in all relevant jurisdictions Model a five-year plan of true likely operating costs and any charter income Discuss the vessel and your itineraries with insurers as soon as possible Start engaging with candidate shoreside technical managers if required Obtain full references from candidate captains and crewmembers Get to the bottom of what any recent ‘refit’ did or did not entail Look out for obsolete equipment with poor support Treat sea trials as screening rather than proof Seek second opinions if need be Don’t: Accept a non-standard sale and purchase agreement: the industry standard contracts aren’t ideal but the parties’ positions are broadly known and understood Allow ‘private use’ as an excuse for thin paperwork and a lack of certification and records Skip any due diligence for the sake of beating a competing purchaser Rely on charter projections without discussing with charter brokers first Engage technical managers on a lowest-bid basis Rely solely on the reputation of the builder Treat any test or trial as conclusive Think that your crew will be able to fix every defect picked up in the survey Agree to any refit work without a works scope and fixed payment milestones Dismiss bureaucratic stages and documents as mere paperwork Nathan Ballantyne's paper Epistemic Trespassing was published in the renowned academic journal Mind in 2019. 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

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Home Journeys Eastern Seaboard / / New England Charm At last we reach Boston Harbor and its islands. Boston Harbor is older than most countries. It’s gritty. Polished – lightly – for the tourists, but without losing its edge. There’s the glint of glass skyscrapers, sure, but they’re sitting awkwardly next to 18th-century brick buildings. It’s a city that’s never quite made up its mind about whether it wants to be New York’s cooler cousin or a living history museum. Then there are the islands: little green blips like Spectacle, Thompson, and George’s that offer refuge from the city’s pace, with forts, trails and beaches. It’s authentic, and all the better for it. Waypoint 7 Boston Harbor The penultimate waypoint is Provincetown (or “P-Town,” as it’s known by those who wear feather boas unironically) is a glorious explosion of art, colour, and character perched on the edge of Cape Cod. It’s one of the very few places in the States where the weird, the wild, and the wildly wealthy have all agreed to share a bit of sand and sea without shouting at each other. It’s part art colony, part fishing village, part social experiment—and all of it works in a glorious, slightly chaotic way. Climb the Pilgrim Monument, explore Herring Cove Beach, or go whale watching. Waypoint 6 Provincetown This is where the journey peaks in old-money splendour: an island where cobblestone streets and historic whaling cottages transport you back in time. It’s got taste. And manners. Even the seagulls seem well-behaved. This is not a place where you show off your wealth by revving a Lamborghini. You park your battered car outside a house with perfectly weathered shingles that’s been in the family since the Civil War. Explore the Whaling Museum to delve into the island's rich maritime history, or visit the Sankaty Head Lighthouse for breathtaking coastal views. It’s charming, peaceful, and absurdly picturesque. Waypoint 5 Nantucket Known as Amity in the 1975 film Jaws, it’s less workaday than depicted. Martha’s Vineyard exudes charm and sophistication It’s a place where people ‘summer’ rather than merely spend their vacation. The island is a patchwork of little towns, each with its own flavour. You can cycle the entire island, get lost in farmers’ markets, eat lobster rolls, or browse art galleries. Strolling through Edgartown, all white picket fences and centuries-old captain’s houses, you half expect Chief Brody to burst onto the street shouting about closing the beaches. It does add a certain thrill to paddleboarding. Waypoint 4 Martha’s Vineyard Today we’re dropping by Cuttyhunk Island, a tranquil retreat known for its pristine beaches and abundant marine life. Cuttyhunk is the westernmost of the Elizabeth Islands, a chain of rugged, mostly private lumps of land owned by people who have last names that sound like Ivy League libraries. But public Cuttyhunk is the exception. When you arrive, it feels less like entering a port and more like stumbling into someone’s well-kept secret. There are no cars and no boutiques. In fact, there’s not much to do here except eat fresh local oysters and congratulate yourself on your life choices. Waypoint 3 Cuttyhunk Island Next is Block Island, anchoring at Great Salt Pond. At only about 7 miles long and 3 miles wide, it’s one of the most charming, gloriously old-fashioned specks of land in the United States. The island runs on what one can only describe as “lobster time.” People are either going to eat it, catch it, or talk about how good it was last night. Explore the island's scenic trails by bicycle, visit the iconic Southeast Lighthouse, or relax on the beaches. The town of New Shoreham is basically a handful of weather-beaten buildings which have probably looked exactly the same since Roosevelt was president. There’s something refreshingly unbothered about the place. Waypoint 2 Block Island We’re beginning our journey in Newport - the spiritual home of American yachting. Back in the Gilded Age, the great and the grotesquely wealthy (think Vanderbilts, Astors, people whose surnames sound like investment banks) descended on this seaside town and decided to build summer ‘cottages’ not too far from New York. Cottages, that is, roughly the size of Versailles. The opulent Breakers mansion is worth visiting. Then explore the historic waterfront – packed with sloops and schooners. As evening descends, dine at one of the harbour’s upscale restaurants, savouring seafood delicacies. Waypoint 1 Newport Welcome to old America. The kind of place where the towns weren’t designed around cars but horses, and the harbours have seen everything from pirate ships and whaling vessels to America’s Cup contenders. The coast hugs you like an old friend. It’s glorious, elegant – and exactly how summer should be. By sharing some Members' itineraries, we're helping others unlock their yachts’ full potential, reducing crew turnover and making ownership a more rewarding experience. Country(ies): United States Time zone(s): Winter: EST (UTC-5) Summer: EDT (UTC-4) Currency(ies): United States Dollar (USD) Temperature: February: 4°C (40°F) August: 18°C (64°F) Sunshine: February: 6 hours August: 9 hours Humidity: February: 62% August: 71%

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

Home Journeys Western Med / / Classic Côte If Saint-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. Waypoint 7 Île de Porquerolles 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. Saint-Tropez's not just a destination: it’s a lifestyle. Waypoint 6 Saint-Tropez 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. Waypoint 5 Cannes 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… Waypoint 4 Antibes 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. Waypoint 3 Villefranche-sur-Mer 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. Waypoint 2 Monaco 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. Waypoint 1 Sanremo The Riviera awaits. Hairpin bends by the sea, lunches that become dinners, harbours with just enough glamour, speed and mischief to feel faintly irresponsible. Behind the luxurious harboursides lie charming cobbled villages and breath-taking landscapes. What's not to love? By sharing some Members' itineraries, we're helping others unlock their yachts’ full potential, reducing crew turnover and making ownership a more rewarding experience. Country(ies): Italy, Monaco, France Time zone(s): Winter: CET (UTC+1) Summer: CEST (UTC+2) Currency(ies): Euro (EUR) Temperature: February: 11°C (52°F) August: 24°C (75°F) Sunshine: February: 5 hours August: 14 hours Humidity: February: 68% August: 65%

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

While discussion about building a new British royal yacht ebbs and flows, it is often forgotten that a significant number of the world’s superyacht fleet already consists of royal and presidential yachts. These vessels occupy a particular place in international maritime law – often acting as floating embassies and extending extravagant hospitality and prestige. And just as diplomats hold special privileges in foreign countries, so do state vessels. Home Handbook Managing / / State Yachts 28 June 2010 Last revised minutes 5 Reading time While discussion about building a new British royal yacht ebbs and flows, it is often forgotten that a significant number of the world’s superyacht fleet already consists of royal and presidential yachts. These vessels occupy a particular place in international maritime law – often acting as floating embassies and extending extravagant hospitality and prestige. And just as diplomats hold special privileges in foreign countries, so do state vessels. minutes 5 Reading time 28 June 2010 Last revised While discussion about building a new British royal yacht ebbs and flows, it is often forgotten that a significant number of the world’s superyacht fleet already consists of royal and presidential yachts. These vessels occupy a particular place in international maritime law – often acting as floating embassies and extending extravagant hospitality and prestige. And just as diplomats hold special privileges in foreign countries, so do state vessels. Diplomatic privileges grant state yachts immunity from seizure and delay. Immunity is based on negotiated reciprocal agreements and has a legal and political foundation. State yachts represent a nation and seizing them could be seen as a diplomatic insult. Different countries have varying laws regarding immunity for state yachts. The privilege is often restrictive, requiring proof that the yacht is a state yacht and the circumstances justify the immunity. Immunity protects owners from disputes such as unpaid bills. Arrests of state yachts are governed by the laws of the jurisdiction where the yacht is located. Arrests serve to detain the yacht until financial security is provided. The International Convention on Salvage may not apply to state yachts entitled to immunity. Action can be taken against individuals responsible for negligence, even if the yacht is immune. Immunity protects owners from disputes such as unpaid bills. Arrests of state yachts are governed by the laws of the jurisdiction where the yacht is located. Arrests serve to detain the yacht until financial security is provided. The International Convention on Salvage may not apply to state yachts entitled to immunity. Action can be taken against individuals responsible for negligence, even if the yacht is immune. Diplomatic privileges grant state yachts immunity from seizure and delay. Immunity is based on negotiated reciprocal agreements and has a legal and political foundation. State yachts represent a nation and seizing them could be seen as a diplomatic insult. Different countries have varying laws regarding immunity for state yachts. The privilege is often restrictive, requiring proof that the yacht is a state yacht and the circumstances justify the immunity. For yachts, these diplomatic privileges take the form of immunity from seizure and delay. But such immunity is not automatic: it arises only because in the past various governments have reached negotiated, reciprocal agreements. This is important because it means that the immunity has a legal as well as a political foundation. So it is therefore possible to state precisely what the extent of the privilege is in any given set of circumstances. So why have such immunity anyway? The answer is that, like warships, state yachts are the floating embodiment of a particular nation, and to try to ensnare such vessels in foreign legal proceedings could be seen as a slap in the face of a foreign country, and diplomatically embarrassing. To make sure such faux pas do not happen, the treatment of state yachts is enshrined in the national laws of most states. It is a similar concept to the legal sanctity of foreign embassies. LIMITS But a line has to be drawn somewhere with regard to foreign sovereign immunities, to prevent them being taken advantage of. So a distinction is drawn between activities undertaken using vessels which are commercial in nature, and those of a governmental or public nature. For yachts, ‘commercial’ means simply being chartered. While this tenet was enshrined in 1926 in the Brussels Convention on Immunity of State Owned Vessels and later in the 1972 European Convention on State Immunity and the 1982 Law of the Sea Convention, these conventions must still have been enacted into particular countries’ domestic law to have any effect: which means that the commercial/non-commercial principle is not uniformly applied. In the UK, the State Immunity Act 1978 strips immunity even where there is just an intention that the yacht be chartered – therefore encompassing charter positioning passages. In the US, the Foreign Sovereign Immunities Act 1976 allows for state yachts to be seized not only when being used commercially but also to enforce a mortgage on the vessel. In France, the courts have held that a vessel may be seized simply when it is not performing a public act of state – which in reality is most of the time. In most parts of the world, the privilege is what lawyers call ‘restrictive’ in nature – in other words, if you are seeking to rely on the privilege it’s up to you to demonstrate that your yacht is indeed a state yacht and the circumstances justify what you’re seeking to rely on. ARREST Being immune from seizure and delay is, almost literally, a ‘get out of jail free’ card for an owner who disputes a bill, for example. Seizing a yacht is a dramatic and effective method for recovering debts. There is nothing like it in land-based law. Normally, if you were to supply goods or services to a yacht, and weren’t paid, you could only sue the person or company with whom you agreed to deliver the supplies or do the work. Liens cut through contractual matrices. Arrests are governed by the law of the jurisdiction in which the yacht is situated at the time. The yacht’s flag and the nationality of the individual or company seeking redress usually makes no difference. The arresting court can also become the trial court, making it possible to ‘forum shop’ for a country with favourable laws. Bringing an action against a ship is a remedy which has been around since ancient times. It exists because, traditionally, ships were owned by their captains and if anyone who had supplied goods or services to the ship was left unpaid, the captain could sail off, never to be seen again. Some see arrest as a punishment in itself; it isn’t – it’s just a way of detaining the yacht in order to force the owner to provide financial security, which could be in the form of a cash deposit or bank guarantee. Then the yacht is free to leave. Contrary to popular belief, at no time is the yacht actually chained to the dock. The order is served on the yacht and if the captain attempts to leave he or she will be in contempt of court and criminally liable. In the UK, a warrant of arrest will not be issued against a state yacht where, by any convention or treaty, the UK has undertaken to minimise the possibility of arrest until notice has been served on a consular officer of that state. Many countries have made similar ad hoc bilateral agreements not to arrest each other’s state vessels, in spite of any immunity laws allowing for arrest where they are being used commercially. SALVAGE If a state yacht is found to be in need of salvage assistance, the International Convention on Salvage 1989 will not apply if the vessel is entitled to immunity. This means that, unless the state owner consents, it may be impossible to arrest a salvaged yacht if financial security is wanted pending the litigation or arbitration of any salvage claim. COLLISION Where a state yacht has been sailed negligently, perhaps causing a collision, it remains possible to bring an action against the officer in charge at the time personally for negligence, just as it would be in any other situation: individuals cannot normally shelter from immunity afforded to the yacht. CONTRACTS So what can a supplier of goods and services do to ensure that the vital right to arrest is retained? Contracts should always include a ‘law and jurisdiction’ clause, although it is surprising how often this is omitted, even by sophisticated suppliers. It is a simple matter to include an extension to such a clause so that the yacht’s owning company is not entitled to claim any immunity in relation to itself (or any of its assets) under any law or in any jurisdiction in connection with any legal proceedings relating to the agreement. The owner should also be asked to irrevocably agree not to claim – and waive – such immunity. As it is always open to the owner to claim that national laws providing immunity will trump whatever is written in the contract, there is no guarantee that such a clause will be effective, but it is the most any supplier can realistically do. ROYAL YACHTS To be clear, not all yachts owned by royalty will be royal yachts in the context of international law. In those jurisdictions where the royal family is part and parcel of the state itself, it will usually be clear whether or not a royal yacht is a state yacht. The situation becomes less lucid where the royal family has a purely symbolic role: some royal households, while subject to widespread popular support and approval, are in fact constitutionally separate from the states they ‘reign’. COMPANY OWNED Further, some state yachts are owned by private owning companies, perhaps based in popular offshore jurisdictions, usually just to ring-fence the yacht as a source of potential legal liability. Where this is the case, the legal owner will be the owning company, not the royal personality or state, so any immunity would fall away. Given this, it would be preferable for state yachts which are to be chartered to be owned within the traditional company owning structure. When ownership is through such a company, the normal rules regarding whether it is possible to view the individual ‘beneficial’ owner as the actual legal owner will apply. This is known as ‘lifting the corporate veil’. It is usually only possible to reveal the beneficial owner where there has been tax evasion or an intent to defraud creditors – which is hardly likely in the case of state yachts. CONCLUSION While it is worth bearing in mind the immunity that state yachts enjoy, it is important not to lose sight of the fact that their owners are more likely to remain solvent, and will certainly behave after an incident in a manner which could be described, quite literally, as diplomatic. 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 Engaging a Manager Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Engaging a Manager

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 50 m Length Finest Craft Builder 2004 Build year 498 Gross tonnage Cayman Islands Registry Particulars Manifestation

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

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

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 80 m Length DMS & Co Builder 2006 Build year 1300 Gross tonnage Spain Registry Particulars Example

Unavailable at present Latest Position Superyachts'R'Us Listing Email WhatsApp +44 7773 246 246 Central Agent 62 m Length Italia srl Builder 2002 Build year 612 Gross tonnage British Virgin Islands Registry Particulars Sample

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

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. 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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. 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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. 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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

Unavailable at present Latest Position Wright A Way & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 22 m Length Italia srl Builder 1994 Build year 45 Gross tonnage Jersey Registry Particulars Sunray

Unavailable at present Latest Position Example Brokerage & Co Listing Email WhatsApp +44 7773 246 246 Central Agent 70 m Length Finest Craft Builder 2013 Build year 805 Gross tonnage Marshall Islands Registry Particulars Simulation

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 . MYBA Charter Show Sanremo to 30 April 2026 27 April 2026 Mediterranean Superyacht Forum Palma de Mallorca to 29 April 2026 28 April 2026 Palma Superyacht Village Palma to 2 May 2026 29 April 2026 BI World Superyacht Awards Venice to 2 May 2026 1 May 2026 Mediterranean Yacht Show Nafplion to 6 May 2026 2 May 2026 Asia-Pacific Superyacht Summit Kobe to 8 May 2026 7 May 2026 East Med Multihull & Yacht Charter Show Poros to 10 May 2026 7 May 2026 TYBA Yacht Charter Show Göcek to 11 May 2026 7 May 2026 British Motor Yacht Show Southampton to 17 May 2026 14 May 2026 Blue Design Summit La Spezia to 20 May 2026 18 May 2026 Limassol Boat Show Limassol to 24 May 2026 21 May 2026 Sanctuary Cove International Boat Show Gold Coast to 24 May 2026 21 May 2026 4th Super Yacht Türkiye 2026 Istanbul 22 May 2026 Giorgio Armani Superyacht Regatta Porto Cervo to 30 May 2026 26 May 2026 Venice Boat Show Venice to 31 May 2026 27 May 2026 Cyclades Cup Antiparos to 13 June 2026 10 June 2026 MTB Superyachts 2026 Lake Maggiore to 13 June 2026 10 June 2026 Loro Piana Giraglia Saint Tropez to 20 June 2026 12 June 2026 Newport Charter Yacht Show Rhode Island to 25 June 2026 22 June 2026 The Superyacht Cup Palma to 27 June 2026 24 June 2026 Cowes Week Isle of Wight to 7 August 2026 1 August 2026 Safe Harbor Race Weekend Rhode Island to 9 August 2026 7 August 2026 Maxi Yacht Rolex Cup Porto Cervo to 12 September 2026 6 September 2026 Cannes Yachting Festival Cannes to 13 September 2026 8 September 2026 Ibiza JoySail Ibiza to 20 September 2026 17 September 2026 Southampton International Boat Show Southampton to 27 September 2026 18 September 2025 Monaco Yacht Show Monaco to 26 September 2026 23 September 2026 Les Voiles de Saint-Tropez Saint-Tropez to 4 October 2026 26 September 2026 Genoa Boat Show Genoa to 6 October 2026 1 October 2026 Rolex Middle Sea Race Valletta to 24 October 2026 12 October 2026 Salon Nautico Internacional de Barcelona Barcelona to 18 October 2026 14 October 2026 Understanding Superyachts & Business Aviation Tax Barcelona 15 October 2026 Olympic Yacht Show Lavrion to 18 October 2026 15 October 2026 Fort Lauderdale International Boat Show Fort Lauderdale to 1 November 2026 28 October 2026 Superyacht Investor Miami Miami 16 November 2026 METSTRADE Amsterdam to 19 November 2026 17 November 2026 Abu Dhabi International Boat Show Abu Dhabi to 22 November 2026 19 November 2026 Dubai International Boat Show Dubai to 29 November 2026 25 November 2026 Kata Rocks Superyacht Rendezvous Phuket December 2026 Antigua Charter Yacht Show English Harbour to 9 December 2026 4 December 2026 Thailand International Boat Show Phuket to 17 January 2026 14 January 2027 boot Düsseldorf Düsseldorf to 31 January 2027 23 January 2027 Discover Boating Miami International Boat Show Miami to 14 February 2027 10 February 2027 Palm Beach International Boat Show West Palm Beach to 21 March 2027 17 March 2027 St Barths Bucket St Barths to 21 March 2027 18 March 2027 China (Shanghai) International Boat Show Shanghai to 30 March 2027 28 March 2027 Superyacht Design Festival Kitzbühel TBC New Zealand Millennium Cup Auckland TBC Yachting Aftersales & Refit Experience Viareggio TBC Seattle Boat Show Seattle TBC Sydney Charter Show Sydney TBC Les Voiles de St Barth St Barths TBC PalmaVela Palma TBC The Turkey Superyacht Forum Istanbul TBC Singapore Yachting Festival Singapore TBC Improving Yacht Crew Retention Nice TBC Superyacht Challenge Antigua Antigua TBC Superyacht Technology Show Barcelona TBC Superyacht UK Technical Seminar London TBC International Yacht & Aviation Awards Cannes TBC World Yachting Summit Monaco TBC Bahamas Charter Yacht Show Nassau TBC The South Pacific Superyacht Rendezvous Fiji TBC SeaYou Yacht Sales & Charter Days Genoa TBC Explorer Yachts Summit Monaco TBC Improving Yacht Crew Retention & Welfare US Fort Lauderdale TBC Auckland Boat Show Auckland TBC Managing Tomorrow’s Superyacht Monaco TBC Opportunities in Superyachts Valletta TBC Rolex Sydney Hobart Yacht Race Programme Sydney & Hobart TBC Gulf Superyacht Summit Abu Dhabi TBC Balearic Superyacht Forum Palma TBC South Coast Powerhouse Summit Southampton TBC Croatia Yacht Show Zadar TBC Superyacht Investor London London TBC Superyacht Summit Adria Porto Montenegro TBC World Yachts Trophies Cannes TBC 7th Super Yacht Americas 2026 Fort Lauderdale TBC Superyacht Summit Türkiye Istanbul TBC International Charter Expo Amsterdam TBC Malta Boat Show Valetta TBC Lantau Yacht Club Boat Show Hong Kong TBC Hong Kong International Boat Show Hong Kong TBC

Home Journeys Pacific Northwest / / Strait & Narrow Conclude your journey in Pendrell Sound, a tranquil inlet known for its warm waters. Not “Oh, it’s warm for Canada” warm: actually warm. It means kayaking without frostbite. It means you can jump off your swim platform in the morning without needing a defibrillator. In British Columbia, this is practically witchcraft. Part fjord, part secret lagoon, the Sound is tucked well away from the busier cruising routes, meaning that you’ll often find yourself sharing this aquatic paradise with nothing but the local wildlife. It’s also a prime oyster breeding ground. So you can knock back locally-sourced oysters while waiting for the seaplane to take you back to Vancouver. Waypoint 7 Pendrell Sound Tucked away in Desolation Sound, Prideaux Haven is so pretty, so utterly perfect, that it makes the Amalfi Coast look like it’s trying too hard. It’s a maze of coves, bays, and fjord-like fingers, offering excellent opportunities for hiking and kayaking, and. The calm waters and stunning scenery also create a perfect setting for wildlife viewing. You might spot seals, dolphins, eagles, or even the occasional black bear having a bit of a paddle on the shore. And then, in the evening, as the sun starts to turn the granite cliffs golden, you pour yourself something cold, sit back, and try to work out how anywhere can be this outrageously beautiful. Waypoint 6 Prideaux Haven Lund’s not big. Blink and you’ll miss the downtown entirely, which is mostly a historic hotel, and a dock that serves as the local social hub, ferry terminal, and seagull battlefield. But what Lund lacks in size, it makes up for in scenery and sheer bloody-minded charm. Now, you might assume that a place this remote would be quiet. You’d be right. But not in the boring sense. It’s purposeful quiet. This is where people come when they’ve had enough of traffic and spreadsheets. And Lund has culture, too - in the rich, indigenous history of the Tla’amin Nation, whose connection to these lands runs deeper than most of us can imagine. The landscape here isn’t just scenery—it’s story, legend, and living memory. Waypoint 5 Lund Savary Island is renowned for its warm waters, but it’s the white sandy beaches which are the real draw. They wrap around the island like a smug smile. South Beach, Indian Point, Duck Bay - it doesn’t matter where you go, you’ll find sand that squeaks underfoot and water that’s absurdly warm for this latitude. You’ll swim, paddleboard, lie down and wonder whether you’re still in Canada or if you accidentally crossed into Narnia. And the sunsets: they don’t so much set as perform. The sky becomes a riot of gold, lavender, and crimson while the silhouettes of Douglas firs stand around like theatre patrons clapping politely. Waypoint 4 Savary Island It’s been called the "Venice of the North," which is a bit rich, given the total absence of gondolas and the fact that you’re more likely to be accosted by a curious seal than an opera-singing boatman. But the spirit is there. Pender Harbour is a watery jigsaw puzzle of coves, inlets, lagoons, and channels. And it's beautiful. Not in a manicured sort of way. No. This is Canada, so it's all granite outcrops and dense evergreens. You won’t find designer boutiques or cocktail bars here. You’ll find something far better. Soul. Real people. Real landscapes. And a pace so relaxed that time seems to stop, shrug, and go fishing. Waypoint 3 Pender Harbour Next day, take your tender or mothership to Gibsons, a quaint seaside town known for its artistic community and laid-back atmosphere. In Canadian terms, Gibsons is practically next door to Vancouver. Culturally, however, it’s like going from Monaco to a farmer’s market run by surfers and retired poets. It has a marina, a pub, a few art galleries, and more kayak racks than parking spots. And yet, there’s a strange magic to it all. The place smells of salt air and cedar and mild self-satisfaction. It’s the sort of town where you arrive thinking you’ll stay for a while and end up Googling the local real estate offerings by nightfall. Waypoint 2 Gibsons Join your yacht in Vancouver, a city where modern architecture meets natural beauty, resulting in one of the most beautiful urban environments anywhere. Explore the vibrant neighbourhoods, indulge in world-class dining, and take in panoramic views of the surrounding mountains and ocean. You can ski in the morning, and sail in the afternoon. Seemingly everywhere, people are running, hiking, paddleboarding, and behaving like their resting heart rate is a matter of civic pride. Waypoint 1 Vancouver This page outlines a journey bookended by Vancouver's cosmopolitan allure and the secluded embrace of Pendrell Sound. A blend of urban sophistication, natural splendour, and secluded luxury. The area’s quiet anchorages and stunning scenery balances adventure, serenity, and unspoiled beauty. By sharing some Members' itineraries, we're helping others unlock their yachts’ full potential, reducing crew turnover and making ownership a more rewarding experience. Country(ies): Canada Time zone(s): Winter: PST (UTC-8) Summer: PDT (UTC-7) Currency(ies): Canadian Dollar (CAD) Temperature: February: 5°C (41°F) August: 18°C (64°F) Sunshine: February: 3 hours August: 9 hours Humidity: February: 80% August: 68%

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 10% deposit is a relic of tradition, misaligned with modern yacht transactions. This white paper proposes splitting upfront payments: one paying for a more comprehensive sea trial, the other for a purchase option. The model compensates brokers much more fairly for their hard work, ensures that sellers are fairly protected, and creates a more balanced and practical framework for high-value sales. Home Handbook White Papers / / Deposits Reimagined THE DEFAULT POSITION Where the contract doesn’t state why a deposit is paid and how it can be recovered, then the default position (under English law – which is commonly used in international agreements) is that it is more than a mere part-payment: it is a guarantee that the buyer will complete, which the seller gets to keep as ‘liquidated’ (i.e. pre-agreed) damages if the buyer defaults – regardless of whether the seller has suffered any actual loss. And 10% has traditionally been the magic number. Anything more has been treated by the courts as punitive rather than compensatory – and so an unenforceable penalty clause. But this could be hard to justify in the context of the sale of an asset as expensive as one of our Members’ yachts. MYBA'S APPROACH MYBA’s Memorandum of Agreement is the dominant transactional framework for yacht sales in European waters. Under the MYBA MOA, the deposit (usually 10%) is payable upon signing, with the balance paid on completion after a successful sea trial and survey. The deposit is typically held by the broker, as stakeholder for both parties, and cannot be released except in accordance with the agreement's terms. If the buyer fails to pay the balance in accordance with the MOA, the seller can cancel and the deposit is released on a 50:50 basis between seller and broker. Various versions of this form are used, but the buyer typically has only four hours maximum for a sea trial. Even the prospective purchasers of cars can often spend a weekend test driving. And if the buyer walks away after the sea trial, the deposit must be repaid by the broker (less “all expenses … if any” although what this encompasses isn’t clear). And spare a thought for the broker(s) who will have put in an enormous amount of work into humouring a tyre-kicker - with no commission to show for it. IYBA’S APPROACH The International Yacht Brokers Association (which, despite the name, predominantly covers the US market) publishes its own Purchase and Sale Agreement (PSA). This differs in several material respects from its European cousin, the MYBA MOA. There’s no stipulation for a 10% deposit, although this is commonly the starting point. In practice, deposits can be as low as 5% for higher-value vessels. There’s no set time for how long the “trial run” should take, just a provision that this should be completed “as soon as practicable”. Unlike the MYBA MOA, “all running expenses” being for the seller’s account – not the buyer’s. Moreover, whether or not the buyer has inspected the vessel, the buyer will be deemed to have rejected it unless a timely written notice of acceptance is submitted to the seller. DUAL UPFRONT PAYMENTS It’s time for traditional deposits to evolve. Here’s the idea. The buyer has the option of paying two separate amounts upfront: Firstly, a payment reflecting the actual cost of a meaningfully-long sea trial (of, say, a week) using as a guide the equivalent amount paid to charter a similar-size vessel for the same period; and Secondly, a payment paid to secure the right to purchase within the closure timeframe, just large enough to deter any daydreamers. Both amounts are set-off against the final balance due on completion, but the buyer can walk away after the sea trial no questions asked, in which case only the second amount would be repaid. This approach is surely better for the seller, who knows at the outset that an agreed fixed amount has already been paid as reasonable compensation for preparing the vessel and undertaking the sea trial. Crew can prepare the vessel to perfection. The broker should also be delighted, as he or she can still continue marketing the vessel where the prospective buyer hasn’t made the second payment. That buyer can also trial a selection of vessels, so that the choice changes from whether to buy – to which to buy. The broker could even take this a step further and charge for vessel tours, further fending off timewasters. With the seller’s blessing, sea trial payments could be retained by the broker to reward ongoing efforts and a sometimes uncertain income stream. The buyer might wish to try out several yachts – without the need to book a charter (keeping in mind that only a minority of yachts are registered for commercial use). And having had the opportunity to conduct a more thorough sea trial, buyer’s remorse is far less likely. The amount paid for this privilege being deducted from the final balance, he or she is no worse off after completion. Crewmembers will have an opportunity to display their skills to a prospective new employer, increasing the chances of them being retained by the new owner. CONCLUSION The 10% deposit owes as much to tradition than to the practical needs of today’s marketplace. It’s time to take a fresh look at this subject and make sale agreements work more effectively for everyone involved. Yes, there would need to be a dialogue with Flag States and insurance underwriters – to ensure that they understand that the sea trial is not a charter by another name. But both have shown in recent years that they are open to fresh ideas. Certainly, the sale agreement incorporating such dual upfront payments will need very careful drafting. Return to top Thank you to all our Members who provided perspectives for this white paper. The 10% deposit is a relic of tradition, misaligned with modern yacht transactions. This white paper proposes splitting upfront payments: one paying for a more comprehensive sea trial, the other for a purchase option. The model compensates brokers much more fairly for their hard work, ensures that sellers are fairly protected, and creates a more balanced and practical framework for high-value sales. 15 October 2025 Last revised minutes 4 Reading time minutes 4 Reading time 15 October 2025 Last revised The 10% deposit is a relic of tradition, misaligned with modern yacht transactions. This white paper proposes splitting upfront payments: one paying for a more comprehensive sea trial, the other for a purchase option. The model compensates brokers much more fairly for their hard work, ensures that sellers are fairly protected, and creates a more balanced and practical framework for high-value sales. For over a century, yacht brokers and lawyers have treated the 10% deposit as gospel. A ritual payment that signals commitment, deters flakiness, and soothes sellers’ nerves. But this figure, rooted in dusty English caselaw and carried into modern international agreements, is starting to look hopelessly outdated. In today’s yacht market, where buyers expect flexibility and transparency, this old model is looking outdated. This paper argues that the industry should abandon the “one-size-fits-all” single deposit and embrace a more nuanced, dual-payment model — one that reflects modern realities, aligns incentives, and makes the buying process fairer for sellers, brokers, and serious purchasers alike. You can also read about A Flood Not a Trickle Questions or comments? Please contact us Join the discussion over in the Club's group You can also read about A Flood Not a Trickle Questions or comments? Please contact us

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The Owners Club's General Secretary is an English superyacht lawyer. He is a Partner at a leading international law firm, regulated by the Solicitors Regulation Authority, the Financial Conduct Authority and the London Stock Exchange. Naturally used to maintaining client confidence, he has also provided expertise on the law and practice of yacht ownership to leading publications and broadcasters. Home About Secretariat / / At Your Service It’s a huge honour to be appointed. Having had many owners and managers as clients over the years, I am only too aware of the issues which need to be addressed. BENJAMIN MALTBY, GENERAL SECRETARY TRUSTED PROFESSIONAL CLUB SECRETARIAT We considered it important to have a regulated professional managing the Club and organising its affairs. We have therefore appointed an English lawyer as our General Secretary. He is a Partner at a leading international firm, regulated by the Solicitors Regulation Authority, the Financial Conduct Authority and the London Stock Exchange. Naturally used to maintaining client confidence, he has also provided expertise on the law and practice of yacht ownership to leading publications and broadcasters, including: Truly Independent Leadership FAQs The General Secretary’s role is to operate the Club at a high level, undertake research, provide guidance and draft the documents and agreements essential to yacht acquisition and ownership. Neither the Club nor General Secretary have vested interests in particular third party suppliers. We’re not beholden to particular yachting industry advertisers . So our approach is objective. Our contracts are fair, balanced and conducive to efficient, fuss-free ownership.

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

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

There are two basic types of charter: those where the crew is provided by the owner and those where it is up to the charterer to provide the crew (known as ‘bareboat’ charters). Because of the complex crew certification requirements, larger yachts are rarely bareboat chartered although they may be the subject of such a charter as part of a complex finance and/or tax avoidance scheme. Home Handbook Chartering Out / / How to Charter Out 6 February 2011 Last revised minutes 5 Reading time There are two basic types of charter: those where the crew is provided by the owner and those where it is up to the charterer to provide the crew (known as ‘bareboat’ charters). Because of the complex crew certification requirements, larger yachts are rarely bareboat chartered although they may be the subject of such a charter as part of a complex finance and/or tax avoidance scheme. minutes 5 Reading time 6 February 2011 Last revised There are two basic types of charter: those where the crew is provided by the owner and those where it is up to the charterer to provide the crew (known as ‘bareboat’ charters). Because of the complex crew certification requirements, larger yachts are rarely bareboat chartered although they may be the subject of such a charter as part of a complex finance and/or tax avoidance scheme. Bareboat charters make the charterer responsible for crew actions and liabilities. Implied terms include yacht seaworthiness and compliance with descriptions. Yacht age doesn't excuse outdated safety and navigational equipment. Breach of charter terms may lead to charter termination or damages. Charterers can give instructions on the yacht's destination but not on seamanship matters. Charter rates may include additional expenses; attention to terms is important. Insurance is required for liabilities caused by the charterer; compliance with policies is crucial. Redelivery of the yacht must be prompt to avoid additional charges. Captains may have authority to make contracts on behalf of the owner. Owners should consider national and regional laws before placing a yacht on the charter market. Charter rates may include additional expenses; attention to terms is important. Insurance is required for liabilities caused by the charterer; compliance with policies is crucial. Redelivery of the yacht must be prompt to avoid additional charges. Captains may have authority to make contracts on behalf of the owner. Owners should consider national and regional laws before placing a yacht on the charter market. Bareboat charters make the charterer responsible for crew actions and liabilities. Implied terms include yacht seaworthiness and compliance with descriptions. Yacht age doesn't excuse outdated safety and navigational equipment. Breach of charter terms may lead to charter termination or damages. Charterers can give instructions on the yacht's destination but not on seamanship matters. Whether or not crew is provided makes a real difference to the legal positions of the parties. Generally, with bareboat charters, the charterer remains responsible as if he or she was the owner: since the crew are employees of the charterer and not of the owner, the acts and omissions of the crew are the responsibility of the charterer and not the owner, should the yacht, for example, be involved in a collision. Bareboat charterers can take comfort in the fact that the Limitation Conventions of 1957 and 1976 allow charterers to limit their liability 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 other non-contractual rights. IMPLIED TERMS Whatever the type of charter, the law will automatically imply further terms. These include conditions that the yacht is seaworthy and that she corresponds with the description given by or on behalf of her owner. Seaworthiness is taken to mean that the yacht, her equipment and crew (if any) must be able to cope with any foreseeable dangers. More specifically, in order to be seaworthy, the yacht must be as fit as an ordinary, careful owner would require at the start of any passage, taking into account all the likely circumstances of that passage. The age of the yacht is relevant, but age does not excuse having out-of-date safety and navigational equipment. All legal documents required must be held on board. The charter agreement may oblige the owner to maintain the yacht in a seaworthy condition for the whole duration of the charter rather than just the start. BREACH OF CHARTER Generally, a breach of any terms may allow the charterer 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 charterer must have suffered some sort of loss as a result of the breach. Just because the yacht is unseaworthy, for example, does not mean that the charterer can claim damages. The particular seaworthiness must have caused loss on the part of the charterer. This would certainly be the case, for example, if the yacht was detained because she did not have the correct papers on board. Moreover, the courts will, as a matter of law, overlook breaches that are so trivial as to be negligible. What is trivial, however, depends entirely on the facts. CHARTERERS’ INSTRUCTIONS Subject to the charter agreement (known by lawyers as a ‘charter party’) the yacht is the charterer’s to do with as he or she pleases. Accordingly, the charterer is entitled to give, and the captain is obliged to comply with, legitimate instructions as to where the charterer wishes the yacht to go. This also means that should the yacht be saved from misfortune, the charterer could be liable to pay the rescuers for their services. Unless a route proposed by the charterer will be inherently dangerous, the captain is bound to comply with the charterer’s request and must then use his navigational skills to avoid danger should it be encountered. Yet the charterer is not entitled to direct the captain on any matters of seamanship. In fact, the captain is not only entitled but also obliged to retain responsibility for all matters relating to the seaworthiness, navigation and the general safety of the vessel, and must refuse requests that might compromise these. A captain is also obliged to refuse to comply with instructions that are illegal under the laws governing the charter agreement. LITTLE EXTRAS While there is much else for the charterer to pay for aside from the hire, such other expenses are usually lumped in with the hire payment to produce the charter rate or fee. The charterer needs to pay close attention to the charter terms to avoid any unexpected bills, however. Quoted charter rates are normally inclusive of the brokers’ fees, but the charterer would be well advised to confirm this. MYBA AGREEMENT The most common terms are those published by MYBA (formerly the Mediterranean Yacht Brokers Association), which have also been adopted by the American Yacht Charter Association. On these terms, the operating costs of the yacht are in addition to the hire. The charterer must pay a self-explanatory Advance Provisioning Allowance, which must be topped up as required, although the captain is required to keep an eye on this expenditure. The charterer should be familiar with other key parts of the MYBA contract. DELAYS For various reasons beyond the owner’s reasonable control, the yacht may be delivered late to the charterer. The owner has 48 hours, or one tenth of the charter period – whichever is the shorter – in which to deliver the yacht for charter, with a proportionate refund being given, or the charterer may cancel the charter, but will only be entitled to a full refund. If the owner fails to deliver the yacht to the charterer, and the reason for this failure was within the owner’s reasonable control, then the charterer will be entitled to a full refund, plus an extra 50 per cent. The charterer may not, however, claim more, no matter how much inconvenience was caused. Should the owner choose to cancel before the start of the charter, the charterer will still only be entitled to a full refund plus 50 per cent. A chartering area is agreed, and the charterer is allowed to cruise for up to six hours per day within that area. Should the yacht break down or become disabled for any other reason, for any length of time over 48 consecutive hours or 10 per cent of the charter period – whichever is the shorter – the charterer has the option to terminate the agreement. INSURANCE Insurance is required against liabilities to third parties that may be caused by the charterer. In as much as the cover required is no less than that set out in the Institute Yacht Clauses in use in the London insurance market, owners may well wish to use these terms rather than any foreign alternatives to save future argument over what is or is not cover of such a standard. The charterer will still be liable, however, should the yacht or any crewmember be detained as a result of any illegal activity on the part of the charterer or any of his or her guests. The insurance policies for larger risks can be written in long-winded terms. In the event of a dispute arising between owner and insurer, unfamiliar terms can lead to doubt. While an owner who keeps the yacht for his or her own use may be given the benefit of any doubt as a consumer, where a yacht is chartered, this protection evaporates. The additional clause inserted by the insurer to allow the yacht to be chartered will usually take the form of a ‘warranty’ added to the policy, requiring the yacht to be skippered by a professional yacht captain. Being a warranty, if this is not abided by, the policy will be ineffective in its entirety. In the case of bareboat charters, the qualifications needed to be held by skipper-charterers will be set out in detail and, again, must be complied with to the letter. REDELIVERY Under the MYBA terms, the charterer should make sure that the yacht is redelivered back to the owner promptly, otherwise the charterer will be liable to pay the charter rate plus an extra 50 per cent, plus the owner’s resulting losses. There is also no agreed limit as to the amount that can be reclaimed should the charterer choose to cancel the contract. AUTHORITY A captain will often be given the authority to make contracts as the owner’s agent, as long as he or she is acting within his or her given authority. Where the yacht has been chartered and the charter agreement states that certain supplies, for example, are to be paid by the charterer, the owner will be liable to pay if the charterer doesn’t, even if the creditor knows of the existence of the charter agreement. POINTS TO CONSIDER Before a yacht is even placed on the charter market, there are a number of points owners should consider. Depending on the waters in which the yacht will be chartered, such activities will be affected by national laws and increasingly by capricious regional laws, especially in the Mediterranean. This may affect the number of guests allowed, safety requirements and the flag the yacht must sail under. Many flag states, in particular within the Red Ensign group, also have technical Codes of Practice applicable to chartered yachts, which can be expensive to comply with. 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 Difficult Guests Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Difficult Guests

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

Yachts bring employees together in close proximity, for long periods, working under pressure, like no other. Employers have always owed crewmembers various duties of care, but recent British legal developments oblige owners to be proactive in preventing sexual harassment. Prevention is better than cure. While these changes only apply to a minority of yachts and crewmembers, it's a step in the right direction and provides a useful industry benchmark. Home Handbook Employing / / Harassment Prevention 30 April 2024 Last revised minutes 8 Reading time Yachts bring employees together in close proximity, for long periods, working under pressure, like no other. Employers have always owed crewmembers various duties of care, but recent British legal developments oblige owners to be proactive in preventing sexual harassment. Prevention is better than cure. While these changes only apply to a minority of yachts and crewmembers, it's a step in the right direction and provides a useful industry benchmark. minutes 8 Reading time 30 April 2024 Last revised Yachts bring employees together in close proximity, for long periods, working under pressure, like no other. Employers have always owed crewmembers various duties of care, but recent British legal developments oblige owners to be proactive in preventing sexual harassment. Prevention is better than cure. While these changes only apply to a minority of yachts and crewmembers, it's a step in the right direction and provides a useful industry benchmark. Yachts create unique working conditions, bringing employees together closely for extended periods under high-pressure situations, making prevention of sexual harassment crucial. The #MeToo movement exposed systemic issues regarding sexual harassment in the workplace, prompting legal reforms to address these failings. Recent legal developments now oblige certain owners to proactively prevent this type of behaviour, emphasizing prevention over remedy. The UK’s Equality Act 2010 defines sexual harassment and places the burden on employers to demonstrate that they took reasonable steps to prevent it. UK employment law applies to crew based on their employment arrangements and connections to Great Britain, with distinctions between peripatetic and expatriate crew. The Act applies to crew working in or adjacent to Great Britain, regardless of their role or the yacht's size, private or commercial. As from October 2024, all employers must take "reasonable steps" to prevent sexual harassment, with significant penalties for non-compliance. The law provides no clear guidance on what constitutes reasonable steps, leaving employers to adopt a risk-based approach. The Equality & Human Rights Commission offers a seven-step guidance for employers, emphasizing policy development, engagement, risk assessment, reporting, training, complaint handling, and addressing third-party harassment. Creating an inclusive and respectful working environment not only fulfils legal obligations but also enhances crew satisfaction, guest experiences, and mitigates retention issues. The Act applies to crew working in or adjacent to Great Britain, regardless of their role or the yacht's size, private or commercial. As from October 2024, all employers must take "reasonable steps" to prevent sexual harassment, with significant penalties for non-compliance. The law provides no clear guidance on what constitutes reasonable steps, leaving employers to adopt a risk-based approach. The Equality & Human Rights Commission offers a seven-step guidance for employers, emphasizing policy development, engagement, risk assessment, reporting, training, complaint handling, and addressing third-party harassment. Creating an inclusive and respectful working environment not only fulfils legal obligations but also enhances crew satisfaction, guest experiences, and mitigates retention issues. Yachts create unique working conditions, bringing employees together closely for extended periods under high-pressure situations, making prevention of sexual harassment crucial. The #MeToo movement exposed systemic issues regarding sexual harassment in the workplace, prompting legal reforms to address these failings. Recent legal developments now oblige certain owners to proactively prevent this type of behaviour, emphasizing prevention over remedy. The UK’s Equality Act 2010 defines sexual harassment and places the burden on employers to demonstrate that they took reasonable steps to prevent it. UK employment law applies to crew based on their employment arrangements and connections to Great Britain, with distinctions between peripatetic and expatriate crew. It’s hard to believe that the #MeToo movement began way back in October 2017. And it’s by October 2024 that employers will have to abide by a set of new rules aimed at preventing sexual harassment in the workplace. The hashtag exposed not only the staggering scale of the problem but how the law was failing employees at every stage. It’s shameful that it’ll have taken seven years. But here we are. THE PRESENT POSITION The Maritime Labour Convention (applicable only to chartered yachts) already mandates that signatory states should take account of the latest version of the Guidance on eliminating shipboard harassment and bullying jointly published by the International Chamber of Shipping and the International Transport Workers’ Federation. That guidance does contain an example policy on general harassment, but it is so vague as to be almost meaningless. The Equality Act 2010 defines sexual harassment as any unwanted conduct of a sexual nature, which has the purpose or effect of violating dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment. Those on the receiving end can bring an employment tribunal claim against their employer (and/or a court claim against their harasser). It’ll then be for the employer to demonstrate that they took “all reasonable steps” to prevent the harassment. In practice, it’s an uphill task to prove that such steps were taken. THE NEW DUTY The Equality Act 2010 has been amended, so that, from 26 October 2024 onwards, all employers must take “reasonable steps” to prevent sexual harassment of employees in the course of their employment. “Sexual harassment” means being subjecting someone to unwanted conduct of a sexual nature - and what constitutes that is for the tribunal to decide on the facts. Of course, sexual harassment is already outlawed, but employers are now under a positive duty to take reasonable steps to prevent it. An allegation of no such steps having been made, employers and are on the backfoot and must prove that they did indeed take such steps. And the new law is non-specific about from whom the crewmember must be protected. So as well as seeking to avoid harassment from fellow crew, reasonable steps must be taken to prevent crewmembers falling victim to unwanted sexual conduct by, say, charter guests. As well as awarding compensation, an employment tribunal may also apply a further uplift of up to 25% where it’s decided that the employer failed to take reasonable steps. This uplift applies to all the compensation awarded for any harassment (whether sexual or not). If the crewmember succeeds in a claim on multiple instances of various types of harassment, the uplift could have a significant effect. APPLICATION TO CREW Broadly, British employment law applies to crewmembers (including captains) ordinarily working in Great Britain. Visiting crews aren’t usually covered. For those working elsewhere, their employment arrangements are key. The law distinguishes between “peripatetic” crew, working on rotation, whose base is in Great Britain and from where they begin their “tours of duty” (who are covered by British employment law) and “expatriate” crew, who live and work abroad. The latter are unlikely to be covered, unless there’s a “sufficient connection” with Great Britain – just holding a UK passport isn’t enough. Employees who do not fit into the above categories, but who have "equally strong" connections with Great Britain and British employment law, might also be covered. There was found to be a sufficient connection, even where a crewmember was employed by a company based outside the UK, on a vessel which never entered UK waters, merely where her salary was paid into a UK bank account, she accounted to HMRC for tax, and the employment agreement was subject to English law and jurisdiction. More specifically (according to The Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011 ) the relevant parts of the Equality Act 2010 apply to any crewmember working (wholly or partly) within Great Britain or adjacent waters, where: The yacht is UK-registered and has a homeport in Great Britain, or The yacht is EEA member state-registered, and the crewmember is a citizen of Great Britain or of an EEA or designated state, and the legal relationship of the crewmember's employment is located within Great Britain, or the crewmember retains a sufficiently close link with Great Britain. The relevant parts also apply to any crewmember working outside Great Britain and adjacent waters, where: Where the crewmember is working on a yacht which is UK-registered and has a homeport in Great Britain, and The crewmember is a citizen of Great Britain or of an EEA or designated state, and the legal relationship of the crewmember's employment is located within Great Britain, or the crewmember retains a sufficiently close link with Great Britain. Where the Act applies, the crewmember’s role, and the size or use of the yacht (private or commercial) are irrelevant. And it doesn’t matter whether the contract is temporary or permanent – or even just on an informal, casual basis so long as the crewmember works on a personal basis. So dayworkers would be encompassed, but the employees of subcontractors would not. WHAT MUST BE DONE? The new law provides no steer whatsoever on what reasonable steps must be taken. Taking a risk-based approach, the tribunal would have before it a wealthy employer, employing typically young crewmembers, in a confined space, often working long hours and sometimes attending to guests whose inhibitions may have been relaxed by alcohol. So the tribunal’s expectations may be very high. Onboard cultures take time to change, and new policies take time to bed-in, so the time to start taking meaningful, tailored action is now. Helpfully, the Equality & Human Rights Commission has produced some guidance. It’s not definitive, but an employment tribunal could use it as a starting point when considering what steps should have been taken. The seven-step guidance can be summarised, and adapted for owners and managers, as follows. Remember that record-keeping is essential. Step 1: Develop an Effective Policy The policy should state that: All crewmembers are in need of protection, and are subject to and protected by the policy, Sexual harassment is unlawful and will not be tolerated, Harassment or victimisation is likely to lead to disciplinary action up to and including dismissal, and Aggravating factors, such as abuse of power over a more junior colleague, will be taken into account in deciding what disciplinary action will be taken. The policy should also: Define sexual harassment and provide clear examples of it - relevant to the environment of a professionally-crewed yacht, Include an effective procedure for receiving and responding to complaints of harassment, and Provide a commitment to review the policy at regular intervals and to monitor its effectiveness. The policy should go on to address third-party harassment, explaining clearly: That third-party harassment can result in legal liability on the part of the perpetrator and employer, That it will not be tolerated, That crewmembers are encouraged to report it, What steps will be taken to prevent it, and What steps will be taken to remedy a complaint and prevent it from happening again. Step 2: Engage Your Crew Conduct regular crew interviews, anonymous surveys and exit interviews. Captain, manager and the owner’s representative should have known open-door policies. Make sure that all crewmembers are verifiably aware of: How they can report sexual harassment Your sexual harassment policy, and The consequences of breaching the policy. Step 3: Assess & Reduce Risks While many of these will be obvious, you should consider and record factors that might increase the likelihood of sexual harassment and the steps that can be taken to minimise them, such as: Where are the power imbalances? Is there job insecurity for a particular group or role? Are crewmembers working alone? Are guests drinking significant amounts of alcohol? Which crewmembers have guest-facing duties? Is there a lack of diversity in your workforce? Step 4: Reporting Implement a reporting system (an online or independent telephone-based service) that allows crewmembers to raise an issue (anonymously or not). Explain clearly to all crewmembers: What is considered acceptable behaviour, How to recognise sexual harassment, and What to do if they experience or witness it. Step 5: Training Crewmembers should be trained on: What sexual harassment in the workplace looks like, What to do if they experience it, How to handle any complaints of harassment, and How to address third-party harassment from guests, suppliers, etc. Step 6: Actioning a Complaint Act immediately to resolve the complaint, taking into account how the crewmember wants it to be resolved. Respect the confidentiality of all parties. Protect the complainant from ongoing harassment or being victimised or harassed further during an investigation. If a crewmember makes a complaint of harassment that may be a criminal offence, you should speak to the individual about whether they want to report the matter. Only use confidentiality agreements where it is lawful, necessary and appropriate to do so. Always communicate the outcome of the complaint to the complainant in a timely manner. Step 7: Dealing with Third Parties Harassment by a third party, such as a guest or supplier’s employee, should be treated just as seriously as that by a colleague. Employers should take steps to prevent this type of harassment, including putting reporting mechanisms in place or assessing high-risk workplaces where staff might be left alone with guests. THE UPSIDES Owners must not see this change in the law as making life more difficult for them and their captains and managers. (Lack of) crew retention is a thorny, ongoing and expensive issue. Social media groups allow crew (anonymously) to name and shame poorly-managed yachts where unacceptable behaviour goes unchecked. In turn, such yachts will struggle to hire good quality crew to replace those who’ve had enough. Sexual harassment can ferment a toxic onboard atmosphere. By contrast, an inclusive and respectful working environment leads to happier crew and better owner and guest experiences. 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 Oh Referee! Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Oh Referee!