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%

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%

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%

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 58 m Length Thompson Yachts Builder 2020 Build year 642 Gross tonnage United Kingdom Registry Particulars Specimen

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

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

The Owners Club's Members' details are held in confidence by our General Secretary, and aren’t revealed to any third party, or other Members. The better part of valour being discretion isn’t just the Club’s guiding ethos. It’s a binding legal obligation. Home About Discretion / / The Soul of Discretion THE LAST GREAT LUXURY Privacy Policy Privacy is the last great luxury of our times. Highly prized by owners, it’s usually a contributing factor in buying a yacht. In an age where data has become a commodity, Members are glad to know that our discretion is absolute. Members' details are held in confidence by the Club’s General Secretary, and aren’t revealed to any third party, or other Members. The better part of valour being discretion isn’t just the Club’s guiding ethos. It’s a binding legal obligation. Some in the yachting industry can be fairly indiscrete. If we, as owners, are going to come together as a club, then we need to safeguard our privacy. This has been achieved. OWNER, 35M MY DISCRETION IS OUR DUTY Learn More Our General Secretary is an English lawyer, for whom discretion isn’t just a promise but a regulated professional requirement. Used to maintaining client confidentiality, he is a Partner at a leading international firm, regulated by the Solicitors Regulation Authority, the Financial Conduct Authority and the London Stock Exchange. The Club’s management company is registered with the United Kingdom Information Commissioner’s Office pursuant to the UK General Data Protection Regulation and the Data Protection Act 2018. By law, the data the Club holds must be held securely and protected against unlawful processing and accidental loss.

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

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

While the refitting of an older yacht may appeal to some owners, others may prefer to go a stage further and upcycle a naval or other working vessel. These often have an attractive aesthetic born of practical necessity - which can be transformed into uniquely beautiful yachts, inherently well suited to cruising in unusual locations. Home Handbook Upcycling / / Conversion Projects 8 August 2018 Last revised minutes 2 Reading time While the refitting of an older yacht may appeal to some owners, others may prefer to go a stage further and upcycle a naval or other working vessel. These often have an attractive aesthetic born of practical necessity - which can be transformed into uniquely beautiful yachts, inherently well suited to cruising in unusual locations. minutes 2 Reading time 8 August 2018 Last revised While the refitting of an older yacht may appeal to some owners, others may prefer to go a stage further and upcycle a naval or other working vessel. These often have an attractive aesthetic born of practical necessity - which can be transformed into uniquely beautiful yachts, inherently well suited to cruising in unusual locations. Some commercial and surplus military vessels can be purchased at a fraction of the price of large yachts, creating interesting opportunities. Buying directly from the seller or their appointed broker is preferable to using an intermediary, which can lead to increased costs and communication issues. Refit and repair yards, rather than builders, are more likely to undertake conversion projects, providing more choice and negotiation power for owners. Conversion projects involve combining new and old designs into a single vessel, requiring integration and compliance with evolving regulations. Interfaces between old and new elements can present challenges during and after the conversion process. Structural changes can affect the distribution of pressures and forces, potentially compromising previously sound parts of the vessel. There is a risk of unexpected costs and lost commercial opportunities during conversions, leading to compensation payments from the yard. Yacht conversions require a measured approach to ensure high-quality fit and finish. Legal and practical issues specific to conversion projects should be addressed before entering into an agreement with the yard. Converting ships to yachts is a niche business, and experienced project management is crucial to ensure high standards and attention to detail. Structural changes can affect the distribution of pressures and forces, potentially compromising previously sound parts of the vessel. There is a risk of unexpected costs and lost commercial opportunities during conversions, leading to compensation payments from the yard. Yacht conversions require a measured approach to ensure high-quality fit and finish. Legal and practical issues specific to conversion projects should be addressed before entering into an agreement with the yard. Converting ships to yachts is a niche business, and experienced project management is crucial to ensure high standards and attention to detail. Some commercial and surplus military vessels can be purchased at a fraction of the price of large yachts, creating interesting opportunities. Buying directly from the seller or their appointed broker is preferable to using an intermediary, which can lead to increased costs and communication issues. Refit and repair yards, rather than builders, are more likely to undertake conversion projects, providing more choice and negotiation power for owners. Conversion projects involve combining new and old designs into a single vessel, requiring integration and compliance with evolving regulations. Interfaces between old and new elements can present challenges during and after the conversion process. Commercial vessels exist to fulfil particular roles. When no longer needed they become liabilities which are generally disposed of without delay – often at a fraction of the price of a similar-sized yacht. High-performance military vessels can also become dated or surplus to requirements as geopolitical sands shift, with government bureaucrats having little interest in maximising sale prices. Opportunities to purchase tend to arise on an ad hoc basis. As when buying a yacht, you should ensure that you’re dealing with the seller directly or the seller’s appointed broker. Using an intermediary broker leads to extended lines of communication, more costs and a greater chance of the purchase falling through. YARD CHOICE While conversions may involve the rebuilding of entire parts of the original ship, such projects are always unique, and cannot readily be fitted into a build slot. For this reason, it is generalised refit and repair yards rather than builders which tend to undertake the work. And, as there are more of the former than the latter, owners have more choice and can drive a harder bargain. PROJECT CHARACTERISTICS All conversion projects have a number of common characteristics. To a greater or lesser degree, they will all combine new and old designs into a single vessel, which must then function effectively as an integrated whole. All this against a backdrop of constantly evolving regulations governing specifications, materials and equipment. And so there will exist various interfaces between old and new elements which do not exist in the context of newbuilds. Issues may arise not only during the conversion process but well after the vessel has re-entered service in its new role. Depending on the extent of any structural changes, hydrodynamic forces may no longer be distributed as originally intended, possibly compromising previously sound parts. Even where the yard has provided a post-redelivery guarantee of workmanship and materials, it may be an unforeseeable aspect of the combination of old and new elements that leads to a fault – rather than a deficiency in the workmanship and (new) materials. When trading ships are converted from one role to another, there is always the risk that the project will cost more than expected because the works have taken longer than expected and charters and other commercial opportunities have been lost. A yard will often have to pay a fixed, daily rate in compensation as part of their agreement with the owner. The works can be rushed and/or the vessel not properly surveyed prior to agreeing a timescale. As the quality of fit and finish is paramount, a more measured approach is needed for yacht conversions. The unique characteristics of the conversion project give rise to a number of practical and legal issues that need to be considered and addressed before entering into any agreement with the yard. And sometimes even before acquiring the would-be project in the first place. PROJECT MANAGEMENT Converting ships to yachts is, to say the least, a niche business. Using yards more used to converting ships for use in one trade to another can lead to significant cost savings, but the high standards of workmanship and the attention to detail demanded by yacht owners can come as a surprise to the yard’s management. Various specialist third party contractors might be needed – and this may not be how the yard typically operates. It is therefore vital that owners have an experienced and effective project manager in attendance on a full-time basis. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Conversion Agreements Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Conversion Agreements

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

Answers to questions often asked about The Owners Club, the worldwide association of superyacht owners. By pooling expertise and experience, we’re making ownership easier, more transparent and better value. Home About FAQs / / Any Questions? Have a question? Just contact us . Some regularly asked questions are set out below. Contact Us How do I become a member? Membership so far has been on an informal basis. To meet the needs of today’s rapidly growing numbers of owners and their representatives, we are now working towards online onboarding. This will allow immediate access to the Club’s suite of standard documents and specialist guidance. How long has the Club been in existence? The idea of creating the Club was first floated back in 2008. Only recently, with the return to pre-global financial crisis levels of building, and increasing public scrutiny of large yacht ownership, have Members sought to formalise their association. Which yacht broker do you recommend? While brokers play a vital role in the yacht market, we cannot recommend particular brokers. Each brokerage, and each individual broker, has its, his and her advantages and disadvantages in terms of contacts, experience and location. For the sake of simplicity and ease of completion, we would urge would-be buyers to ensure that they are dealing with central sales agents. Can we advertise with you? Yes – as long as your business isn’t selling yachts or any yachting-related goods or services. Members trust the Club to provide information and assistance without fear or favour. As we provide object owner-focused guidance, allowing yachting businesses to advertise might create a conflict of interest. Find out more here . Can I network with Members? If Members agree, the Club may organise social and networking events for Members and their representatives in future. Can you help find me a captain? Crew agencies, aside, our General Secretary is happy to publicise direct crew and shoreside staff vacancies. Just contact us . Can you manage my yacht? No, but Members will soon be able to use the Club’s standard yacht management agreement to contract with third party managers. Indeed, Members may consider that, using the Club’s suite of documents, there may be certain aspects of management which can be undertaken by their own family offices. Why doesn’t the Club use the term ‘superyacht’? It turns out that most of our Members don’t actually like the terms ‘superyacht’, ‘megayacht' or ‘gigayacht’. They generally feel that it isn’t helpful to be seen by authorities and the media as a special type of yacht. They feel there’s a fine line between label and target.

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

Compliance with the more obscure flag state regulations and local laws can sometimes seem like unnecessary hassle and expense. Yet if you, as a yacht owner, are to remain protected in the event of an accident, investing in detailed compliance may be money well spent. You also need to keep lines of communication with your insurance broker open. Home Handbook Insuring / / Staying Covered 10 May 2023 Last revised minutes 6 Reading time Compliance with the more obscure flag state regulations and local laws can sometimes seem like unnecessary hassle and expense. Yet if you, as owner, are to remain protected in the event of an accident, investing in detailed compliance may be money well spent. You also need to keep lines of communication with your insurance broker open. minutes 6 Reading time 10 May 2023 Last revised Compliance with the more obscure flag state regulations and local laws can sometimes seem like unnecessary hassle and expense. Yet if you, as owner, are to remain protected in the event of an accident, investing in detailed compliance may be money well spent. You also need to keep lines of communication with your insurance broker open. Warranties are requirements that must be fulfilled by the policyholder to manage risk in insurance situations. Breach of warranty no longer automatically avoids all liability for underwriters since 2016. Underwriters remain liable for losses occurring after a breach of warranty if it can be remedied. If a loss occurs while the insured is in breach of warranty and the breach increases the risk, underwriters can deny liability. Breach of warranty regarding past facts may permanently suspend the underwriter's liability. Identifying warranties in a policy is crucial as they can be expressed or implied by law. Popular policy forms include warranties related to the purpose of use, navigation limits, vessel control, etc. The warranty of legality is an important implied warranty that covers lawful adventures and lawful usage of the yacht. Seaworthiness may not be explicitly required in policies, but it can impact coverage and claims. Sensible precautions, such as using approved charter agreements and verifying crew qualifications, are recommended to ensure coverage and compliance with laws and regulations. Identifying warranties in a policy is crucial as they can be expressed or implied by law. Popular policy forms include warranties related to the purpose of use, navigation limits, vessel control, etc. The warranty of legality is an important implied warranty that covers lawful adventures and lawful usage of the yacht. Seaworthiness may not be explicitly required in policies, but it can impact coverage and claims. Sensible precautions, such as using approved charter agreements and verifying crew qualifications, are recommended to ensure coverage and compliance with laws and regulations. Warranties are requirements that must be fulfilled by the policyholder to manage risk in insurance situations. Breach of warranty no longer automatically avoids all liability for underwriters since 2016. Underwriters remain liable for losses occurring after a breach of warranty if it can be remedied. If a loss occurs while the insured is in breach of warranty and the breach increases the risk, underwriters can deny liability. Breach of warranty regarding past facts may permanently suspend the underwriter's liability. Warranties serve to manage risk in various situations. They are requirements that need to be fulfilled by the policyholder. Warranties can be promissory, where the policyholder commits to a specific action or condition, or they can affirm or deny the existence of certain facts. Simply labelling a term as a warranty is insufficient, and the courts will consider the parties' intentions as well. They can be set out in the policy, or are implied by law – for example that the yacht will be used for lawful purposes, and operated in a lawful manner. BREACHES OF WARRANTY Since 2016, the old ‘basis of the contract’ clauses have been abolished. This means that underwriters cannot automatically avoid all liability if an express warranty is breached. The underwriter is liable for losses that occurred before a breach of warranty – as was always the case. But now, if the breach can be remedied, the underwriter remains liable for losses that happen after the breach has been fixed. If a loss occurs while the insured is in breach of a warranty, and if (crucially) the breach actually increased the risk of the actual loss, underwriters can still deny liability. Once (if) the insured rectifies the breach before the loss happens, the insured will again be back on-cover. After a breach of a warranty, the insured is still responsible for paying the premium. However, underwriters may be cautious when demanding payment to avoid waiving their right to rely on the breach. If the breach cannot be rectified, such as a breach of warranty regarding past facts (e.g., previous insurance claims or losses), the liability of the underwriter remains permanently suspended, and the insured will not have had any cover. RECOGNISING WARRANTIES So, with such serious consequences flowing from a breach of warranty, it is vital to be able to identify what warranties apply to a policy. The trouble is that warranties can be expressed in the contract, but not actually described as a warranty. More worryingly, they can be implied automatically by law, without even having to be agreed upon. Thankfully, express warranties must at least be included in the policy, or must at least be contained in some document referred to in the policy. So in the event of a claim it wouldn’t be good enough for an underwriter to simply dust-off some previously unknown ‘standard’ terms and refuse to pay. They are normally added as a deliberate and obvious fundamental stipulation of the contract. While implied warranties cannot be found in policies, they are easy to ascertain from the UK’s Marine Insurance Act 1906, and we’ll consider the more important ones below. While it may seem narrow-minded just to look at English law, it’s worth considering that most of the world’s risks are insured on the London market, and most countries model their own insurance laws on this Act – sometimes word for word. Whereas express warranties tend to be specific, implied warranties can be overarching and vague; so there can be overlaps between them. But an express warranty will not exclude an implied warranty on a related matter, unless directly inconsistent with it. EXPRESS WARRANTIES The two most widely used policy forms, the Institute Yacht Clauses and the American Yacht Form, contain warranties that the yacht is only to be used for ‘private pleasure purposes’ and is not to be chartered unless the underwriters specifically agree. The Institute Yacht Clauses also frame agreed navigation limits and the vessel’s maximum speed as warranties. Other popular forms often demand that when the yacht is underway a competent person must be on board and in control of the vessel. In a 2006 English case, concerning a claim following a serious fire on board the motor yacht Newfoundland Explorer while she was laid up afloat in Fort Lauderdale, the court held that the phrase ‘warranted vessel fully crewed at all times’ meant that the owner had to keep at least one crew member on board the yacht 24 hours a day, subject to (i) emergencies rendering crew departure necessary, or (ii) necessary temporary departures for the purposes of performing crewing duties or related activities such as adjusting mooring lines. It wasn’t good enough to employ a captain who lived ashore 30 minutes away. History was repeated in 2008 with a fire on board another vessel, Resolute, whose crew lived nearby – and the court in that case came to the same conclusion. WARRANTY OF LEGALITY Arguably the most important warranty is not expressed, but implied. Under the UK’s Marine Insurance Act 1906 (and in the laws of many other nations) there is an implied warranty that: The ‘adventure’ (i.e. a charter or a period of use by the owner and/or crew) will be lawful; and The yacht will be used in a lawful manner – as far as the insured can control the matter. With regard to legality of the adventure, at one end of the spectrum a yacht will clearly not be covered where the owner uses it for smuggling. Problems arise where the owner has no knowledge of doing anything illegal. Illegality may stem from local law as well as the yacht’s flag state law: a yacht chartering in without a local charter licence may not be covered. One would also want to ensure that the complex US security regulations are complied with when entering their waters. As for the second part – using the yacht in a lawful manner – this is only an issue as far the owner can control it. Compliance with safety-related regulations, such as the International Safety Management (ISM) Code or the Red Ensign Group Yacht Code Large Yacht will be a prerequisite to the underwriter paying related claims. So important is the warranty of legality that breaches of it cannot be waived by a kind underwriter, neither can the parties agree to overlook it. The warranty of legality has been used to avoid payment even where the crew failed to keep a proper watch – as this was in itself a breach of international collision regulations. In one landmark case, a yard was also denied cover where fire destroyed yachts in the yard, but where the yard itself did not conform to municipal byelaws. SEAWORTHINESS As surprising as it may seem, where a policy is for a period of time (as nearly all are) rather than for a specific passage, there is no implicit requirement in law for your yacht to be maintained in a seaworthy state. While some policies overcome this by expressly obliging the owner to maintain the yacht in a seaworthy condition, some standard forms don’t. Where there’s no stated obligation to do so, the underwriter will not be liable for any losses arising from unseaworthiness if the yacht actually puts to sea in that state with the knowledge of the insured. Where, as is normally the case, the legal owner (and therefore the named insured) is an offshore company, perhaps held in trust, identifying the individual(s) with such knowledge is difficult. The managers are an obvious starting point. Whilst it is for the underwriters to prove such knowledge, not for the insured to disprove, a review of the documents and correspondence held by the ISM Code ‘designated person’ could prove fatal to the chances of a pay-out. Being in a seaworthy condition means just that: falling short, but nevertheless making every effort, will not do. Even if a policy does not insist on seaworthiness, this is likely to be examined by the underwriter in any event after a claim, as any material non-disclosure would still provide a separate route for invalidating the claim. Many flag states, in particular within the Red Ensign group, have technical Codes of Practice that apply specifically to large yachts and those which are chartered. These provide objective measures of unseaworthiness, but, whilst helpful, should not be considered as providing a complete description of what constitutes a seaworthy yacht. SENSIBLE PRECAUTIONS If you’re chartering your yacht out, underwriters may insist on the use of a charter agreement that has been specifically approved by them, or is in a standard industry format, such as that published by MYBA . Likewise, if you’re going to race your sailing yacht, you may net to provide advance notification. However you use your yacht, be sure to get written confirmation of the ongoing information needed by underwriters – and provide this clearly, verifiable and in good time. It's also vital to check that your yacht is operating in accordance with flag and port state laws, and that you have the paperwork to provide this. Check, also, that your crew have the qualifications they claim they have: there are various third parties which provide this standalone service. 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 Making a Claim Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Making a Claim

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

As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. Home Handbook Employing / / Commission or Kickback? 2 November 2013 Last revised minutes 3 Reading time As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. minutes 3 Reading time 2 November 2013 Last revised As Members know, yachts aren’t run on shoestring budgets. And most of the money is spent not by them in person, but by their captains and other trusted third parties. In highly competitive marketplaces, there is an incentive to buy business with formal ‘commissions’, extravagant ‘thank you’s – or perhaps just a good old brown envelope. T he Bribery Act 2010 in th e UK is considered one of the toughest anti-bribery laws globally, with similar principles found in the US Foreign Corrupt Practices Act. The Act applies extraterritorially, meaning that a crime can be committed even if the transaction occurs outside of the UK. There are four key offences under the Act: bribing, receiving a bribe, bribing a foreign public official, and failing to prevent bribery. Bribing involves offering or promising a financial or other advantage in exchange for improper performance of a function or activity, while receiving a bribe includes requesting or accepting such an advantage. Local practices should be disregarded when determining improperness, unless they are part of the written local law. Hospitality can be considered bribery if it is disproportionately generous, especially in industries focused on luxury. The offence of failing to prevent bribery applies to all commercial organizations, including companies and partnerships operating in the UK. Bribery crimes committed outside the UK can be investigated and prosecuted if there is a "close connection" to the UK, such as being a UK passport holder or ordinarily resident. The Serious Fraud Office (SFO) in the UK handles corruption allegations involving UK nationals or incorporated bodies overseas, and there is international cooperation in investigating and prosecuting bribery and corruption. The United States' Foreign Corrupt Practices Act allows payments to foreign public officials to expedite their duties, even if it violates local laws. Civil actions can also be taken against individuals involved in bribery, and a criminal conviction serves as proof of civil liability. The offence of failing to prevent bribery applies to all commercial organizations, including companies and partnerships operating in the UK. Bribery crimes committed outside the UK can be investigated and prosecuted if there is a "close connection" to the UK, such as being a UK passport holder or ordinarily resident. The Serious Fraud Office (SFO) in the UK handles corruption allegations involving UK nationals or incorporated bodies overseas, and there is international cooperation in investigating and prosecuting bribery and corruption. The United States' Foreign Corrupt Practices Act allows payments to foreign public officials to expedite their duties, even if it violates local laws. Civil actions can also be taken against individuals involved in bribery, and a criminal conviction serves as proof of civil liability. T he Bribery Act 2010 in th e UK is considered one of the toughest anti-bribery laws globally, with similar principles found in the US Foreign Corrupt Practices Act. The Act applies extraterritorially, meaning that a crime can be committed even if the transaction occurs outside of the UK. There are four key offences under the Act: bribing, receiving a bribe, bribing a foreign public official, and failing to prevent bribery. Bribing involves offering or promising a financial or other advantage in exchange for improper performance of a function or activity, while receiving a bribe includes requesting or accepting such an advantage. Local practices should be disregarded when determining improperness, unless they are part of the written local law. Hospitality can be considered bribery if it is disproportionately generous, especially in industries focused on luxury. In the United Kingdom, giving incentives and rewards may be a criminal offence – or not – according to whether it falls foul of the Bribery Act 2010 . This law is widely recognised as the toughest of its kind in the world, but its principles are much the same in the rest of the world, including the United States’ Foreign Corrupt Practices Act. Significantly, under the Bribery Act, a crime may be committed even if the transaction takes place outside of the UK. This was already the effect of a small and little-known piece of anti-terror legislation introduced in 2001, but the globe-trotting aspects of the 2010 Act are clearer and more coherent. COMMISSIONS To be clear, a lot of commission arrangements are perfectly legal – but it’s easy to overstep the mark, and there can be a false assumption that formality means legality. The penalties for getting it wrong include an unusually long prison sentence and unlimited fines. OFFENCES There are four key offences: Bribing Receiving a bribe Bribing a foreign public official, and Failing to prevent bribery Bribing occurs when a person offers, gives, or promises to give, a financial or other advantage to someone else in exchange for ‘improperly’ performing a function or activity. Receiving a bribe is defined as requesting, accepting or agreeing to accept such an advantage. An activity will be ‘improperly’ performed when any expectation of good faith or impartiality has been breached, or when the function has been performed in a way not expected of a person in a position of trust. Helpful, this now clarifies what is expected when a commission is an overt element of any business model – even where this may lead to a reduced commission. GREASING PALMS So what about those instances where greasing palms to get things to happen is just the way things work? The Act states that local practises should be disregarded when deciding on improperness – unless they form part of the written local law. While the UK authorities are alive to the necessity of ‘facilitation payments’, official tolerance relates only to small payments, made by companies with the right bribery policies and procedures in place. HOSPITALITY Hospitality can constitute bribery if it is disproportionately generous. In an industry devoted to luxury, it can be easy for crewmembers to confuse the lifestyle of their wealthy employers with their own – and not think twice about receiving hospitality which, seen from afar, is completely over the top. PREVENTION The offence of failing to prevent bribery applies only to ‘commercial organisations’, but this includes any company or partnership carrying on any business in the UK. Conceivably, this could yacht owning companies managed from the UK. With regard to the first three offences, while crimes committed outside the UK (except on board UK-flagged vessels) are normally beyond the jurisdiction of the courts, this is not the case with bribery. Given its seriousness, it’s one of a unique group of crimes (along with terrorism and war crimes) that the authorities can and will investigate worldwide. All that’s needed is a ‘close connection’ with the UK – including just being a passport-holder or ordinarily resident. INVESTIGATION The UK’s Serious Fraud Office (SFO) acts as the focal point for any allegations of corruption by UK nationals or incorporated bodies overseas, while the City of London Police has an Overseas Anti-Corruption Unit with the specific function of supporting overseas corruption investigations undertaken by the SFO. The idea that prosecuting authorities have tentacles that can reach worldwide is not limited to the UK. As with many areas of the criminal law, most countries’ laws are broadly similar, and both European Union and United Nations conventions provide for international co-operation with regard to both the investigation and prosecution of bribery and corruption. UNITED STATES While the reach of law enforcers in the United States is equally global in nature, however, a slight difference can be seen in their approach, as the Foreign Corrupt Practices Act of 1977 allows payments to be made to foreign public officials to facilitate or expedite their performance of the duties they’re already bound to perform, even if this still violates local laws. So making a payment to an official to speed up a visa application, for example, would be acceptable. CIVIL ACTION In addition to the threat of prosecution, an owner may sue an employee or other agent for any loss – and, while a criminal conviction is not necessary for a civil action, it would be undeniable proof of civil liability. The owner may also be able to withdraw from the contract agreed to by the agent, whether or not he or she brings an action against the agent, and this option may be useful if, for example, the owner has managed to find a better deal elsewhere. CONCLUSION While it might seem that the authorities are coming down rather hard on corruption, it’s not because they are trying to spearhead some kind of moral crusade but simply because corruption distorts rational product and service choices, which can ultimately prevent the cream of the industry from rising to the top, distort markets and threaten economic growth. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about Harassment Prevention Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Harassment Prevention

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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

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

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

While your yacht insurance broker should understand and be able to explain policy terms to you, there can be ambiguity as to the role played by intermediaries. If you’re going to do your utmost to make sure that you remain covered, you need to be clear about the insurance contract itself, beyond deductible amounts. Underwriters are in business to make money and, despite marketing to the contrary, can and will fight larger claims. Home Handbook Insuring / / Understanding The Contract 18 April 2023 Last revised minutes 3 Reading time While your broker should understand and be able to explain policy terms to you, there can be ambiguity as to the role played by intermediaries. If you’re going to do your utmost to make sure that you remain covered, you need to be clear about the insurance contract itself, beyond deductible amounts. Underwriters are in business to make money and, despite marketing to the contrary, can and will fight larger claims. minutes 3 Reading time 18 April 2023 Last revised While your broker should understand and be able to explain policy terms to you, there can be ambiguity as to the role played by intermediaries. If you’re going to do your utmost to make sure that you remain covered, you need to be clear about the insurance contract itself, beyond deductible amounts. Underwriters are in business to make money and, despite marketing to the contrary, can and will fight larger claims. Where there's a dispute, ambiguous terms in a policy are construed in favour of the insured . Consumer protection may vary based on whether the insured uses the yacht privately or commercially. Insurance contracts consist of four types of terms: terms descriptive of the risk, exclusions, warranties, and conditions. Breach of warranty can release the underwriter from future liability or suspend coverage, while breach of a condition can lead to liability rejection or claims for damages. Terms descriptive of the risk define the perilscovered , and the insured must prove that the loss resulted from one of these perils. Exclusions limit the scope of coverage and suspend cover during the excluded circumstances. Warranties are fundamental terms that must be strictly followed, regardless of whether they are labeled as such. Conditions can be either conditions precedent (before coverage) or bare conditions (during the policy), and breach can result in different outcomes. The insured party must have an insurable interest in the matter being insured, typically the owner of the yacht. Other interested parties must be declared in the contract and can be entitled to notifications, but to claim directly, they need to be named as joint or co-insureds. Exclusions limit the scope of coverage and suspend cover during the excluded circumstances. Warranties are fundamental terms that must be strictly followed, regardless of whether they are labeled as such. Conditions can be either conditions precedent (before coverage) or bare conditions (during the policy), and breach can result in different outcomes. The insured party must have an insurable interest in the matter being insured, typically the owner of the yacht. Other interested parties must be declared in the contract and can be entitled to notifications, but to claim directly, they need to be named as joint or co-insureds. Where there's a dispute, ambiguous terms in a policy are construed in favour of the insured . Consumer protection may vary based on whether the insured uses the yacht privately or commercially. Insurance contracts consist of four types of terms: terms descriptive of the risk, exclusions, warranties, and conditions. Breach of warranty can release the underwriter from future liability or suspend coverage, while breach of a condition can lead to liability rejection or claims for damages. Terms descriptive of the risk define the perilscovered , and the insured must prove that the loss resulted from one of these perils. Insurance contracts must set out the risk, the duration of cover, the premium and the amount payable in the event of loss. That’s it. They don’t need to be set out in any particular way. And, aside from marine insurance, they don’t even need to be in writing. The policies for larger risks can be long-winded and written in rather theatrical terms. These old-fashioned words and phrases have well-known and judicially considered meanings and implications. In recent years, there has been a move towards simpler terminology – but such words may not have been considered in court. In the event of a dispute arising between insured and underwriter, unfamiliar terms can lead to doubt. If words are ambiguous, they will be construed in favour of the insured. Whilst an owner who keeps the yacht solely for private use may be given the benefit of any doubt as a consumer, where the vessel is chartered or otherwise maintained on a commercial basis for tax reasons, this consumer protection evaporates. Where words have a technical legal meaning, this definition will prevail, as will any definitions set out in the contract. Where there are rival meanings, the construction consistent with commercial common sense will triumph. The contract will also be construed in line with the purpose of the contract, such that insuring clauses are interpreted widely, and exclusions narrowly. TYPES OF TERMS Insurance contracts contain four types of terms. It’s important to know which category a term falls into, as this affects what happens where such terms aren’t complied with. The categories are: Terms descriptive of the risk; Exceptions and exclusions; Warranties; and Conditions. For those who already know a little about general contract law, the terms ‘warranty’ and ‘condition’ are used differently. In insurance law, a breach of warranty can discharge an underwriter from all future liability, or may suspend cover for the period during which the insured is in breach, rather than merely rise to a claim for damages. Breaching a condition can give the underwriter the right to reject liability – or claim damages. TERMS DESCRIPTIVE OF THE RISK These are terms that describe the risk, and so define the cover in terms of the perils insured against. The insured must prove that its loss was caused by one of these perils. EXCEPTIONS & EXCLUSIONS Exceptions and exclusions set limits on the scope of the risk. They have the effect of suspending cover while the excluded circumstances are in effect. WARRANTIES Warranties are fundamental terms and must be strictly complied with. They may or may not labelled as such, but exist where the insured declares that something will or will not be done, or that a condition has or has not been fulfilled, or that it holds a particular intention or belief. It used to be that underwriters made all kinds of terms warranties simply by including ‘basis of contract’ clauses. This is no longer allowed, but statements as to particular facts (past or present) can still be deemed to be warranties. CONDITIONS Conditions take the form of either: A ‘condition precedent’, which requires compliance by the insured before being on-cover, and which, if breached, allows the underwriter to reject liability altogether; or A ‘bare condition’, which requires compliance by the insured during the currency of the policy, and which, if breached, allows the underwriter to claim damages for any loss suffered as a result of a breach. Examples of a condition precedent might be the payment of the premium, or compliance with claim notification requirements, while a bare condition might take the form of an obligation to give prompt notice to the underwriter of any circumstance likely to give rise to a claim, or a requirement to co-operate with the underwriter in respect to a claim. Either way, the underwriter bears the burden of proving that a condition has been breached. And labelling a condition as such is not conclusive as to its status. INSURABLE INTEREST It may sound obvious, but the party taking out the insurance must be the owner of the yacht – not the beneficial owner. Otherwise, in law, the beneficial owner would merely be taking a bet. The insured is said to need to have an ‘insurable interest’ in the matter being insured. Other parties may have an interest which is insurable, and this must be declared in the contract. The noted party can be entitled to notification by the underwriter of changes to cover, cancellation or non-renewal. If such parties want to be able to claim directly from the underwriter, however, they need to be named either as joint or co-insureds in the policy. Joint insureds each have a contractual right to indemnity, perhaps because they both jointly own a yacht. But the wrongdoing of one joint insured can preclude a claim by the other (innocent) joint insured. A co-insured, such as a mortgagor bank, is not precluded from claiming under such circumstances. 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 Providing Information Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about Providing Information

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

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

If, as owners, we are to continue to enjoy the freedoms and privileges we currently enjoy – without interruption or stigmatisation – then we need to engage with those who are beginning to target our assets and way of life. Quietly, we need to educate the press and policymakers about yachting’s current and potential positive impact on the environment generally in shipping in particular. Home Handbook White Papers / / Blue is the New Green Whether or not you are persuaded about the underlying causes of global temperature rises, a critical mass of democratically-elected leaders are now convinced. Protests no longer take the form of marches and placard-waving. Increasingly, activists are taking direct action. Their websites and image-curation are becoming more slick. They have an increasing grasp of public relations and social media. For now, the campaigns are self-defeating. Their disruption alienates the wider public as traffic jams build, meetings are missed and emergency services disrupted. But, increasingly, protests have started to target symbols of conspicuous consumption, such a ‘luxury’ car dealerships. And why stop at cars? Why not business jets? Why not… ‘superyachts’? At least the general public won’t be inconvenienced. And the messages can be conflated with broader political messages as well. It's beginning to happen. The blockading of general aviation terminals is becoming more commonplace. Then there was a protest at Port Vauban, Antibes, followed by one at the Superyacht Forum in Amsterdam. Massive nearby commercial airports and ports are being ignored. And while the underlying data used in academic papers owes is, to say the least, paper-thin - see our white paper Damn Lies & Statistics - the trajectory of this movement is clear. SHORT-SIGHTEDNESS In the case of yachts, this fury is short-sighted. The more time one spends afloat, the more one is aware of the amount of pollution entering the sea and the food chain – especially in the form of plastics. Not only do they bear witness first-hand, the owners of large yachts are better placed than anyone to actually address the issues beyond making changes to their own habits. They are likely to own companies which can enforce rapid behavioural change on a massive scale. Or they may own media outlets which band the drum of change. Or they may know politicians who can enact change. It is impossible not to be moved by the beauty of the marine environment, or outraged at seeing it compromised. Owners are in the position to act across a spectrum of environmental issues. NIGHTMARE SCENARIO Far-fetched today, but picture a possible scene a few years from now. A resolute Greta Thunberg, her outlook still binary and adolescent, implores her social media followers to flock to the Mediterranean – to picket ports en masse. WhatsApp groups coordinate the protests. Social media livestreams go viral. High-profile celebrity charterers cancel their summer bookings for fear of being “cancelled” themselves. The French, Italian and Spanish governments cave in to a vocal minority and introduce punitive taxes in berths and bunkers. Youngsters are discouraged from training for a role working on yachts. The costs of ownership spiral, and the assets themselves devalue alarmingly. Even financiers and insurers begin to withdraw from the market for fear of a popular backlash and a corresponding commercial impact on other business lines. TESTBEDS FOR CHANGE We have seen various new low and no-carbon yacht propulsion technologies being proposed in recent years. The 3D renderings are impressive and the press releases compelling. But this is cutting little ice with the campaigners, who just claim that this is “greenwashing”. It is incumbent on everyone within the yachting industry to urge environmental campaigners to see the broader picture of maritime transport. According to the Organisation for Economic Co-operation and Development (OECD), around 90% of traded goods are carried by sea . Yet shipping is a naturally conservative business: investments are large and the returns uncertain. The last thing trading ship owners want to do is to dabble in unproven green technology – unless obliged to by law. Any why are lawmakers going to change the law if the no technology hasn’t been proven on a smaller scale? PAST MISTAKES The yachting industry has, it must be said, singularly failed to portray the correct message to the wider society. We have worked project to project, season to season, sale to sale. Most information put out has been about yachts’ specification and features. It’s been about the wow factor – about one-upmanship, where bigger is better and consumption is king. Aside from all exciting new research going on, there are dozens of environmental and other philanthropic initiatives quietly being undertaken by owners. Yet the wider public knows nothing about this. SHORT-TERM STRATEGY Doing nothing is not an option. Carbon neutral schemes for yachts have been around since the mid 2000s. Taking up such schemes is – quite literally – the least we, as owners, can do. We also need to engage with the general media, and help them understand that, in terms of technological development, yachting is to shipping what haute couture is to everyday fashion. The wonderful work of organisations such as SeaKeepers needs to be known about far more widely – and more owners need to involve themselves. Ports and marinas also need to take advice and make preparations to ensure that, in so far as the law allows, any protests which prevent crew or suppliers going about their daily business are shut down as rapidly as possible before these patterns of behaviour become entrenched and emulated. LONG-TERM STRATEGY In the long term, those making bold claims with regard to truly viable carbon-neutral power sources need to make the investment necessary to bring these project to fruition. Aside from the tech, the refuelling infrastructure and regulatory framework must be developed. And insurance underwriters need to be onboard. For too long, owners have failed to act coherently in the face of a growing threat to our cherished liberties and way of life. It’s time to make blue the new green. Return to top Thank you to all our Members who provided perspectives for this white paper. If, as owners, we are to continue to enjoy the freedoms and privileges we currently enjoy – without interruption or stigmatisation – then we need to engage with those who are beginning to target our assets and way of life. Quietly, we need to educate the press and policymakers about yachting’s current and potential positive impact on the environment generally in shipping in particular. 21 November 2022 Last revised minutes 4 Reading time minutes 4 Reading time 21 November 2022 Last revised If, as owners, we are to continue to enjoy the freedoms and privileges we currently enjoy – without interruption or stigmatisation – then we need to engage with those who are beginning to target our assets and way of life. Quietly, we need to educate the press and policymakers about yachting’s current and potential positive impact on the environment generally in shipping in particular. Recent years have seen an increase in protests and direct action by climate activists. They are targeting symbols of conspicuous consumption, including luxury car dealerships and large yachts. However, this fury against yachts is short-sighted. We, the owners, have a unique position to address environmental issues. We can help to enforce behavioral change through our companies and media outlets. The yachting industry needs to portray a different message to the wider society, highlighting our environmental and philanthropic initiatives. Taking up carbon neutral schemes is the least we can do. We should engage with the media to showcase technological developments and initiatives like SeaKeepers. Ports and marinas should prepare to handle protests swiftly to prevent disruption. In the long term, investment is needed in viable carbon-neutral power sources, refueling infrastructure, and regulatory frameworks. We must act coherently to protect our liberties and way of life. You can also read about Damn Lies & Statistics Questions or comments? Please contact us Join the discussion over in the Club's group You can also read about Damn Lies & Statistics Questions or comments? Please contact us

Unavailable at present Latest Position Wright A Way & Co Listing Email WhatsApp Central Agent 36 m Length Thompson Yachts Builder 2014 Build year 400 Gross tonnage Cayman Islands Registry Particulars Case Study

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

It’s time to free ourselves from a tun of unnecessary paperwork. In this white paper, drawn up at the suggestion of, and following consultations with, some of our Members, our General Secretary considers what Gross Tonnage is, why it’s used as the primary regulatory threshold, and what workarounds could be utilised to circumvent its blunt impact. Home Handbook White Papers / / Speaking Volumes Browse the website of any large brokerage and you will find numerous vessels said to have a “GT” of 499. This refers to Gross Tonnage. Owners of these are relieved from having to comply with a raft of regulations which apply to chartered vessels of 500 GT and above. Not doing so can lead to the yacht being detained and will lead to insurance policies being invalid. To be clear, this paper isn’t suggesting that the relevant safety regulations shouldn’t apply to certain larger yachts - it’s just that Gross Tonnage creates peculiar regulatory thresholds which can lead to compromised designs. Whether or not owners are looking to shave money off compliance costs, designers certainly consider there to be a market for such “paragraph” yachts. Keep in mind, also, that many such safety regulations don’t apply to private (i.e. non-chartered) yachts - even though they require the same number of permanent, full-time crewmembers. WHAT IS GROSS TONNAGE? The word ‘tonnage’ here does not mean weight. It is derived from the old English term ‘tun’ meaning a large wooden barrel – used for measuring, storing and transporting wine, oil or honey. They usually held 252 gallons, but other sizes were common. As it happens, a tun of wine weights about one long ton, which is 2240 pounds or 1016 kg, but the key point is that Gross Tonnage reflects volume – not weight, mass or displacement. Gross Tonnage is an abstract, unitless calculation, being the vessel’s total enclosed volume but modified by a logarithmic factor based on that volume. It was a compromise which met the needs of the shipping community of the 1960s. Yet these arcane rules still govern the design and specification of certain yachts over half a century later. Crucially, the figure is calculated as much as it is measured. It is defined by the Regulation 3 of Annex I of the International Convention on Tonnage Measurement of Ships, 1969 (normally abbreviated to “ITC 69”) by the formula: GT=K1V Where: V = the total volume of all enclosed spaces of the ship in cubic metres, and K1 = 0.2 + 0.02 log10V (or as set out in Appendix 2 of ITC 69) Calculating this requires a good grasp of both naval architecture and mathematics. UNDERLYING RATIONALE The reason why volume is used rather than weight is that, historically, ships were measured in order to calculate taxes. Aside from warships, all vessels were cargo ships of some description. And the easiest and fairest way to fund port operations and levy foreign trade was to tax ship owners according to cargo carrying capacity and, therefore, profitability. Overall vessel size was not the key factor. The same principles were applied to later passenger ships. Different countries used a variety of methods, which is why the ITC 69 was needed. This also did away with Gross Register(ed) Tonnage (GRT) - a measure of total internal capacity which is confused with GT even to this day – and at least ten other key measurements in use internationally. PROBLEMS CAUSED Inevitably, there is pressure on ship designers to minimise enclosed volume and reduce Gross Tonnage-based taxes and dues. Such amounts are minimal on relatively small vessels, such as yachts, but squeezing beneath a particular tonnage threshold seems to be a common aim. This can lead to freeboards (the distance between the waterline and the deck) being reduced to the minimum legal requirement. In turn, this reduces the available reserve buoyancy – those internal areas, above the waterline, which can be made watertight in the event of an emergency and help keep the vessel afloat for longer. Further, crew areas are reduced to the bare minimum in terms of floor space and headroom, and engine rooms are made as small as possible with machinery crammed in. Most pertinently for yachts, sterns tend to be cut off and slab-sided, sheer (the curving of the main deck upwards towards bow and stern) is reduced or eliminated, and swathes of the upper decks are given over to sundecks. Arguably, yachts are less elegant as a result. SHORT-TERM SOLUTION? Help could be at hand – if only more ship registry officials knew where to look. Regulation 1(3) of Annex I of ITC 69 states – arguably, in effect – that where there are “novel” aspects of a vessel’s design these aspects can be ignored when calculating Gross Tonnage. There is a small number of precedents for this in the context of trading ships, but this loophole does not appear to have been exercised when assessing yachts. This is surprising given that the latter are usually, almost by definition, full of novel features be they aesthetic elements or technical innovations. While there is Regulation 1(3) is written in vague terms, individual ship registries’ determination as to what “novel” means is definitive. Article 11 of ITC 69 makes it clear that tonnage certificates must be accepted at face value by other port states. It is perhaps surprising how this apparent loophole hasn’t been exploited more – especially by those registries marketing themselves at large yacht owners. But it would be better to change the rules than bend them. LONG-TERM SOLUTION The shortcomings of ITC 69 have been raised with the International Maritime Organisation (IMO), over the years, in respect of various types of cargo ships. Yet the convention has yet to be amended. Ship registries and owners have observed that too little or too much tonnage tax is being paid relative to other vessels of a similar displacement – depending on the point of view. The IMO’s view is that it doesn’t control tonnage tax and is unable to disallow the use of the gross tonnage in its calculation as this is a matter for individual port authorities. The most promising alternative has been mooted by the Australian government. Known informally as the “maritime real estate” and more formally as “Register Tonnage”, this is simply the length overall x breadth x summer draught. This seems fair as ports can charge ships on the basis of the amount of the port they take up, and the amount of dredging required. Yacht owners will need to work with trading ship owners in order to bring pressure to bear on the IMO. The procedure for amending the ITC 69 is particularly lengthy and involved. But surely worthwhile if yacht owners are going to put an end to this bureaucratic tail waging a very expensive dog. CONCLUSION No one system of measurement is going to satisfy all owners. ITC 69 is a compromise which has endured where numerous previous regimes have not. From a regulatory perspective, for nearly all trading and passenger vessels size doesn’t matter: all regulations will apply. And rightly so. Crew have every right to work in a safe and comfortable environment, and third parties have every right not to suffer the effects of collisions and pollution. But large, crewed yachts are different. Very few even existed when ITC 69 was drafted. Their crew live in comfortable quarters and are well paid (competition for the most able crewmembers ensures this). It can’t be right for yacht designers to be working around a figure to which vessel measurements form just one part, and which in any event attempts to satisfy the needs of a trading shipping community from a bygone era. It will be useful for Members to engage with ship registries at the outset regarding, via the Club Secretary, about Regulation 1(3) and what it could mean for the design of their yacht. Return to top Thank you to all our Members who provided perspectives for this white paper. It’s time to free ourselves from a tun of unnecessary paperwork. In this white paper, drawn up at the suggestion of, and following consultations with, some of our Members, our General Secretary considers what Gross Tonnage is, why it’s used as the primary regulatory threshold, and what workarounds could be utilised to circumvent its blunt impact. 8 February 2019 Last revised minutes 4 Reading time minutes 4 Reading time 8 February 2019 Last revised It’s time to free ourselves from a tun of unnecessary paperwork. In this white paper, drawn up at the suggestion of, and following consultations with, some of our Members, our General Secretary considers what Gross Tonnage is, why it’s used as the primary regulatory threshold, and what workarounds could be utilised to circumvent its blunt impact. Gross Tonnage (GT) is the key factor in determining which regulations apply, and this is vital to ensuring that insurance policies remain valid . GT is based on the total enclosed volume of the yacht and is derived from historical measurements used for taxation. The use of GT as a regulatory threshold can lead to compromised designs as owners and designers aim to minimize ongoing mangement costs. There is a loophole in the regulations that allows "novel" aspects of a yacht's design to be ignored when calculating GT, but this option has not been widely utilized. A potential alternative to GT is "Register Tonnage," which considers the physical dimensions of the yacht, and, as owners, perhaps we should engage with ship registries and pressure the International Maritime Organisation to change the regulations. You can also read about Language of Luxury Questions or comments? Please contact us Join the discussion over in the Club's group You can also read about Language of Luxury Questions or comments? Please contact us

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

The media is full of data about the carbon footprint of large yachts. This data is taken as gospel by campaign groups. After all, the journalists refer to published, peer-reviewed academic papers. And these are clever people, right? Well it appears not. Or least their political jaundice means that they’re not fussed about fact-checking. If we’re not careful, policy makers may regard such research as correct and unchallengeable. Home Handbook White Papers / / Damn Lies & Statistics Imagine the scene. It’s November 2022. You’re a high-ranking governmental delegate at the 27th United Nations Climate Change conference in Sharm el-Sheikh. You represent a Mediterranean nation, and answer directly to the Minister of State. Within broad pre-set limits, you have free reign to negotiate and agree to tabled proposals. Over your morning cappuccino at a harbourside café, you peruse a report prepared by a diligent civil servant. Incredibly, it seems as if ‘superyachts’ are responsible for more greenhouse gases even than private jets. Who knew? And there are tens of thousands of such jets around the world. Something must be done. The civil servant points to a report by Oxfam, a highly respect international NGO, entitled Carbon billionaires The investment emissions of the world’s richest people . It states: “ Another study drew on public records to estimate that in 2018 emissions from the private yachts, planes, helicopters and mansions of 20 billionaires generated on average about 8,194 tonnes of carbon dioxide (CO2e). ” FURTHER REINFORCEMENT Oxfam’s report credits an academic paper as its source: “ B. Barros and R. Wilk. (2021). The outsized carbon footprints of the super-rich ”. Ever diligent, your civil servant has already found this paper online. It’s by Professor Richard Wilk and PhD candidate Beatriz Barros, no less. They claim “ Among the many possessions of billionaires, large “superyachts” are by far the largest producers of greenhouse gases. Three-quarters of the billionaires in our sample owned a yacht with an average length of 276 feet (84 meters), and their average carbon equivalent emissions were 7,018 tons per year. ” Wow – these superyachts are huge, with a carbon footprint to match. You ask the civil servant how many billionaires there are in the world. She taps away on her laptop and replies that Forbes’ 36th Annual World’s Billionaires List: Facts And Figures 2022 states that there are now 2,668 billionaires in the world. Oh my goodness – if that’s the output from just 20, how much CO2 are 2,668 yachts going to produce? I mean, they must nearly all have one – right? But how respected is Barros & Wilk’s paper? The civil servant Googles. She finds a Financial Times article entitled Superyachts aim to go green – but at what cost? in which it’s says “ Research by anthropologists Beatriz Barros and Richard Wilk of Indiana University into the carbon footprints of the super-rich found that yachts contributed an outsized share of the carbon emissions of the billionaires who own them — far more than their private jets or mansions .” The FT. Well that’s that then. As politicians, we must act – and fast. We must tax these superyachts out of existence. You finish your cappuccino and head over to the conference venue with a purposeful stride. REALITY CHECK But dig a little deeper, and you’ll also find that Wilk & Barros’s sample comprised just twenty billionaires. That’s right. Twenty. They even admit that, “ This is not in any way a representative sample of billionaires. ” Indeed not. Moreover, their “average” yacht with a length of 84 metres is likely to have a gross tonnage of, say 2,500. In fact, the actual average gross tonnage of all 30+ metres yachts sold in 2021 was just 440 (source: SuperYacht Times, The State of Yachting 2022 ). As it was outside the scope of their studies, Wilk & Barros calculated fuel consumption using a 2018 paper by Luisa Menano de Figueiredo, The Yacht of 2030 – which looked, according to Wilk & Barros, at the cruising records of just ten yachts. Wilk & Barros do not explain their methodology. Had they looked more closely at de Figueiredo’s paper, in fact just eight yachts (not ten) were tracked, for a 90-day period, while in the Caribbean – as this was all the AIS data available. And de Figueiredo’s paper only concerned motor vessels – not sailing yachts. MORE NONSENSE Indeed, a misleading body of academic literature is starting to build. Respected academics Lynch, Long, Stretesky & Barrett, from the University of South Florida, Oklahoma State University, Northumbria University and Eastern Michigan University respectively stated in their 2019 academic paper Measuring the Ecological Impact of the Wealthy: Excessive Consumption, Ecological Disorganization, Green Crime, and Justice that “ Specifically, we draw attention to assessing aspects of ecological footprints of super yachts, super homes, luxury vehicles, and private jets. Taken together, the construction and use of these items in the United States alone is likely to create a CO2 footprint that exceeds those from entire nations. These results are not necessarily surprising but suggest that excessive consumption practices of the wealthy may need to be reinterpreted as criminal when they disrupt the normal regeneration and reproduction of ecosystems by generating excessive ecological disorganization. ” Strong stuff. Specifically, this paper states “ From available data, we estimated that an average (71 meter) SY uses about 107,000 gallons gasoline/year and produces 2.1 million pounds of carbon dioxide emissions annually .” As set out above, 71 metres is, of course, way above average. And specific data sources aren’t given – as one might expect. Instead, there’s a list of references at the end. The only one relating to yachts is given as “ Mathew, Jerin. 2015. “True Cost of Owning a Super Yacht.” International Business Times, May 15. Retrieved April 19, 2019 (http://www.ibtimes.co.uk/true-cost-owning-super-yacht-1498302). ” This is a short report publicising a fun, marketing infographic produced by an insurance company. That infographic states that a 71-metre yacht will consume (exactly) 500 litres of diesel per hour, and the owner will spend precisely $400,000 on fuel. Not a cent more and not a cent less. Etc. General sources are listed at the bottom of the infographic, including Wikipedia and superyachtfan.com. A fun piece of marketing, but hardly data to form a foundation for erudite scholarship. More recently, a paper by Wang, Maidment, Boccolini and Wright, of Solent University in the UK, stated in their paper Life cycle assessment of alternative marine fuels for super yacht that, " There is little argument that, with an estimated average cost of US$275 million only the wealthiest individuals in the world can afford to purchase and operate a superyacht (Alicia, 2015). " An estimate which is inaccurate by a factor of, say, ten - at least - by which has been recycled without question or fact-checking. CONCLUSION It’s easy to dismiss such works as politically motivated tirades by joyless, virtue-signalling lecturers, with a jaundiced worldview. Yet the figures generated are taken at face-value not only by climate activists but by respected journalists. As owners, we need to collect accurate data, and present it clearly, alongside information about our many and various yacht-based climate research and conservation initiatives. Return to top Thank you to all our Members who provided perspectives for this white paper. The media is full of data about the carbon footprint of large yachts. This data is taken as gospel by campaign groups. After all, the journalists refer to published, peer-reviewed academic papers. And these are clever people, right? Well it appears not. Or least their political jaundice means that they’re not fussed about fact-checking. If we’re not careful, policy makers may regard such research as correct and unchallengeable. 23 November 2022 Last revised minutes 5 Reading time minutes 5 Reading time 23 November 2022 Last revised The media is full of data about the carbon footprint of large yachts. This data is taken as gospel by campaign groups. After all, the journalists refer to published, peer-reviewed academic papers. And these are clever people, right? Well it appears not. Or least their political jaundice means that they’re not fussed about fact-checking. If we’re not careful, policy makers may regard such research as correct and unchallengeable. There is a growing body of misleading academic literature on the ecological impact of luxury items. Yet the figures generated by such studies are taken at face value by climate activists and journalists. A recent academic report suggests that 'superyachts' emit more greenhouse gases than private jets, concluding with a call for action. The report, in turn, refers to a study by academics Barros and Wilk, claiming that superyachts owned by billionaires have significant carbon footprints. However, the sample size of the study is small and not representative, and the average yacht size mentioned is much larger than reality, and fuel consumption calculations are based on limited data. We, as onwers, need to be collecting accurate data and provide clear information about yacht-based climate impact. You can also read about Speaking Volumes Questions or comments? Please contact us Join the discussion over in the Club's group You can also read about Speaking Volumes Questions or comments? Please contact us

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

Unavailable at present Latest Position New Horizons Listing Email WhatsApp +44 7773 246 246 Central Agent 54 m Length Builder & Co Builder 2002 Build year 499 Gross tonnage Cayman Islands Registry Particulars Precursor

Unavailable at present Latest Position Rapid Brokers Listing Email WhatsApp +44 7773 246 246 Central Agent 67 m Length Italia srl Builder 2000 Build year 608 Gross tonnage United Kingdom Registry Particulars Simulator

The automatic identification system (AIS) is a tracking system that establishes the positions of ships, and fixed and floating objects, in real time. Used as a navigational aid, it also lets the world see a yacht’s position - which isn’t always what we owners want. There are times when ‘going dark’ is allowed and times when it’s not. Home Handbook Managing / / Going Dark 28 November 2022 Last revised minutes 4 Reading time The automatic identification system (AIS) is a tracking system that establishes the positions of ships, and fixed and floating objects, in real time. Used as a navigational aid, it also lets the world see a yacht’s position - which isn’t always what we owners want. There are times when ‘going dark’ is allowed and times when it’s not. minutes 4 Reading time 28 November 2022 Last revised The automatic identification system (AIS) is a tracking system that establishes the positions of ships, and fixed and floating objects, in real time. Used as a navigational aid, it also lets the world see a yacht’s position - which isn’t always what we owners want. There are times when ‘going dark’ is allowed and times when it’s not. The Automatic Identification System (AIS) enhances safety and security by providing positional information and supplementing radar for traffic situation awareness. AIS is used in search and rescue operations, providing accurate information on the position of survival craft. It automates mandatory ship reporting to port authorities or vessel traffic service stations. Ships over 300 gross tonnage engaged in international voyages are required by SOLAS regulations to be fitted with Class A AIS equipment. Local regulations may be significantly more stringent. Yachts not subject to SOLAS requirements can carry Class B AIS devices. AIS systems consist of a small box with VHF transmitters, receivers, and a central processing unit, connected to various shipborne sensors and navigation systems. It transmits static information, dynamic information updated from ship sensors, and voyage-related information. AIS should not be solely relied upon for collision avoidance and does not replace radar target-tracking. It can be switched off under certain circumstances, but the master should report it to the competent authority and restart it when the source of danger has disappeared. Failure to operate AIS may lead to penalties by port state authorities and insurance underwriters may claim the vessel was unseaworthy in case of a collision without AIS. AIS systems consist of a small box with VHF transmitters, receivers, and a central processing unit, connected to various shipborne sensors and navigation systems. It transmits static information, dynamic information updated from ship sensors, and voyage-related information. AIS should not be solely relied upon for collision avoidance and does not replace radar target-tracking. It can be switched off under certain circumstances, but the master should report it to the competent authority and restart it when the source of danger has disappeared. Failure to operate AIS may lead to penalties by port state authorities and insurance underwriters may claim the vessel was unseaworthy in case of a collision without AIS. The Automatic Identification System (AIS) enhances safety and security by providing positional information and supplementing radar for traffic situation awareness. AIS is used in search and rescue operations, providing accurate information on the position of survival craft. It automates mandatory ship reporting to port authorities or vessel traffic service stations. Ships over 300 gross tonnage engaged in international voyages are required by SOLAS regulations to be fitted with Class A AIS equipment. Local regulations may be significantly more stringent. Yachts not subject to SOLAS requirements can carry Class B AIS devices. AIS enhances safety and security in various ways. By plotting positional information provided by nearby vessels, it supplements the picture produced by radar, so enhancing traffic situation awareness. Many of the problems common to radar, such as clutter, target swap as ships pass close by and target loss following a fast manoeuvre, do not affect AIS. AIS is also used in search and rescue operations. Search And Rescue operators, on land, at sea and in the air, get more accurate information, especially on the position of survival craft. Further, because AIS is used to exchange data ship-to-ship and with shore-based facilities, it is useful in automating mandatory ship reporting to port authorities or vessel traffic service (VTS) stations. LEGAL REQUIREMENT By virtue of Regulation 19 of Chapter V of the International Convention for the Safety of Life at Sea (SOLAS) 1974, as amended, all ships of 300 gross tonnage or more and engaged on international voyages must be fitted with Class A AIS equipment. In law, all yachts are ships – and it is irrelevant whether registered as a private or commercial vessel. Class B devices may be carried on yachts which are not subject to the SOLAS requirements. Certain national laws take this further. For example, US Federal law requires commercial vessels of just 65 feet and over to be fitted with a Class A AIS device. HOW IT WORKS The system is contained within a small box, containing one very high frequency (VHF) radio transmitter, various VHF receivers and a central processing unit. To this is attached antennae, and interfaces for heading, speed devices and other shipborne sensors, plus interfaces to radar, Automatic Radar Plotting Aids (ARPA), Electronic Chart System/Electronic Chart Display and Information System (ECS/ECDIS) and Integrated Navigation Systems (INS). There’s also a display and keyboard to input and retrieve data. The AIS can be connected either to an additional dedicated AIS display unit, possibly one with a large graphic display, or as an input to existing navigational system devices such as a radar display, ECS, ECDIS, or INS. INFORMATION SHARED The AIS information is transmitted continuously by a ship, and includes the following three types: Static information, which is entered into the AIS on installation and need only be changed if the ship changes its name, Maritime Mobile Service Identity (MMSI), location of the electronic position fixing system (EPFS) antenna, or undergoes a major conversion from one ship type to another; Dynamic information, which, apart from navigational status information, is automatically updated from the ship sensors connected to AIS; and Voyage-related information, some of which such as destination and estimated time of arrival (ETA) will need to be entered manually at the start of the voyage and kept up to date as necessary. INCOMPLETE PICTURE AIS doesn’t always give the complete picture, and – as with any navigational aid – should only be used by itself – especially for collision-avoidance. It doesn’t take the place of radar target-tracking. The officer of the watch (OOW) should always be aware that other ships, in particular smaller leisure craft, fishing boats and warships might not be fitted with AIS. The OOW should always be aware that AIS fitted on other ships as a mandatory carriage requirement might, under certain circumstances, be switched off on the master's professional judgement. SWITCHING OFF Details of yachts whose AIS is switched on maybe accessed by anyone, anywhere, simply by looking at MarineTraffic , VesselFinder or any of the other myriad of similar websites. Not all owners will be happy about this. According to the International Maritime Organisation’s Resolution A.1106(29) of 14 December 2015, entitled Revised Guidelines for The Onboard Operational Use of Shipborne Automatic Identification Systems (AIS): AIS should always be in operation when ships are underway or at anchor. If the master believes that the continual operation of AIS might compromise the safety or security of his/her ship or where security incidents are imminent, the AIS may be switched off. Unless it would further compromise the safety or security, if the ship is operating in a mandatory ship reporting system, the master should report this action and the reason for doing so to the competent authority. Actions of this nature should always be recorded in the ship's logbook together with the reason for doing so. The master should however restart the AIS as soon as the source of danger has disappeared. If the AIS is shut down, static data and voyage-related information remains stored. Restart is done by switching on the power to the AIS unit. Ship's own data will be transmitted after a two-minute initialization period. In ports AIS operation should be in accordance with port requirements. CONSEQUENCES Port state authorities will expect AIS to be operational, and may impose penalties for this not being the case – especially where there is a collision which AIS may have helped to avoid. Keep in mind, too, that non-compliance with more stringent local regulations will be punished . Even in international waters, where a yacht goes dark other than allowed by Resolution A.1106(29), while this may not be noticed by the flag state authority, if there’s a collision then insurance underwriters could claim that, without this important navigational aid working, the vessel was, in law, unseaworthy, and they are entitled to refuse payment. But going dark may not be intentional. Interference, weak radio signals and patchy satellite reception can all compromise AIS data exchange. Distinguishing intentional from unintentional signal drop-outs is difficult but not impossible. The frequency and regularity of drop-outs prior to a full blackout may be indicative. And the reason may not be malevolent. It is known, for example, that in certain parts of the world fishing vessels switch off AIS in order not to reveal productive catch areas to competitors. CONCLUSION Whether we, as owners, like it or not, AIS is governed by international convention – and it’s here to stay. If there are legitimate concerns then going dark may be permissible, but it’s as well to discuss this with the captain and insurance underwriter well in advance of a transit through waters in which it may be prudent or desirable. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about State Yachts Join the discussion over in the Club's group Questions or comments? 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Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. Home Handbook Chartering Out / / Difficult Guests 3 October 2017 Last revised minutes 3 Reading time Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. minutes 3 Reading time 3 October 2017 Last revised Just because charterer guests have paid a great deal of money for the exclusive use of a superyacht, this does not mean that he (or she) has the right to do with the boat and crew as he pleases. A Member recently sought advice with regard to redress following a charter during which guests behaved in a way which was at best depraved – and at worst illegal. In the absence of an agreement stating otherwise, the broker marketing the yacht is considered the owner's agent and must act in the owner's best interests. Once the broker books the charter, the owner is bound by the charter agreement and must provide the yacht to the charterer. The terms of the charter agreement are often based on the MYBA Charter Agreement, which allows the owner to back out only in exceptional circumstances and with financial consequences. The captain is required by law to refuse illegal instructions from the charterer, but there are other unsavory or immoral actions that may not be illegal. The MYBA form explicitly prohibits certain behaviors, such as causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Any breach of the charter agreement may entitle the owner to terminate the contract immediately and claim damages. The captain must raise issues with the charterer before the owner can terminate the contract, according to the MYBA Charter Agreement. Despite the challenges, chartering can help offset the costs of owning large yachts with the right guidance and support. The MYBA form explicitly prohibits certain behaviors, such as causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Any breach of the charter agreement may entitle the owner to terminate the contract immediately and claim damages. The captain must raise issues with the charterer before the owner can terminate the contract, according to the MYBA Charter Agreement. Despite the challenges, chartering can help offset the costs of owning large yachts with the right guidance and support. In the absence of an agreement stating otherwise, the broker marketing the yacht is considered the owner's agent and must act in the owner's best interests. Once the broker books the charter, the owner is bound by the charter agreement and must provide the yacht to the charterer. The terms of the charter agreement are often based on the MYBA Charter Agreement, which allows the owner to back out only in exceptional circumstances and with financial consequences. The captain is required by law to refuse illegal instructions from the charterer, but there are other unsavory or immoral actions that may not be illegal. Had the owner known who the charterer was, he would have never have agreed. The charter broker was aware of the charterer’s reputation but remained silent until just before the start of the charter. In the absence of agreement to the contrary, the broker marketing the yacht on behalf of the owner will often be, in law, the owner’s agent. As such, the broker must perform with the appropriate care and skill, and not allow any conflict between personal interests and those of the principal. By booking a charter with someone known to be unsuitable, it could be said that the broker wasn’t careful and just wanted the commission. THE AGREEMENT Once the broker has booked the charter, however, the owner will have been bound by the charter agreement, and is bound to provide his yacht to the charterer. The terms will have been set out in the charter agreement. The most common terms are those published by the Mediterranean Yacht Brokers Association (‘MYBA’), which have also been adopted by the American Yacht Charter Association. The MYBA Charter Agreement only allows the owner to back out as a result of circumstances beyond his control, on pain of reimbursing the owner plus an extra 50%. EDGY BEHAVIOUR While, subject to the charter agreement, the yacht is the charterer’s to do with as he pleases, the captain is obliged by law to refuse to comply with illegal instructions. However, there are many things a charterer may do which, while unsavoury or immoral, are not illegal. The MYBA form therefore expressly bans, for example, behaviour causing nuisance or disrepute, commercial photo shoots, and harassment of crewmembers. Member’s Experience: “ I have been chartering my yachts for more than 15 years and have maintained an excellent relationship with brokers and charterers. In fact, my yachts are considered some of the most successful yachts on the charter market. What has occurred is certainly an aberration and not to be confused with the excellent work the broker community has done these many years. ” Generally, any breach may allow the owner to treat the charter as having come to an end immediately and claim damages, or just claim damages afterwards, depending on how serious the breach is. But the owner must have suffered some sort of actual loss as a result of the breach: an upset crew may not be enough. RAISING ISSUES The MYBA Charter Agreement specifically requires the captain to raise issues with the charterer first, before the owner has a chance to terminate the contract. A failure to do this could arguably be seen as a waiver of the owner’s rights, and owners may wish to amend such standard form contracts. The Member was at pains to point out that these circumstances are unusual, commenting, “I have been chartering my yachts for more than 15 years and have maintained an excellent relationship with brokers and charterers. In fact, my yachts are considered some of the most successful yachts on the charter market. What has occurred is certainly an aberration and not to be confused with the excellent work the broker community has done these many years.” DON’T BE PUT OFF For all the pitfalls and hurdles, chartering can substantially offset the costs associated with the ownership of large yachts – with the right guidance and support. Return to top Thank you to all our Members who contributed to this article. Unless otherwise stated, this article broadly describes, by way of illustration, the situation in the United Kingdom waters in respect of United Kingdom-registered vessels. This piece does not provide or replace legal advice. Questions or comments? Please contact us You can also read about How to Charter Out Join the discussion over in the Club's group Questions or comments? Please contact us You can also read about How to Charter Out

Unavailable at present Latest Position 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

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

It is possible that political protests targeted at yachts and yachting infrastructure become more common. But such outcries are based on a complete ignorance about the nature and scope of the societal benefits flowing from ownership. It is up to us owners to inform and educate, as and when this is needed, and undertake research to support axiomatic assertions. Home Handbook White Papers / / A Flood Not a Trickle By far the majority of large, permanently-crewed yachts in existence today have only been launched since 2000. They’re new, and their positive impact is poorly understood by the general public, pressure groups and authorities alike. Yachts are increasingly becoming the targets of conflated environmental and political protests. As well as causing inconvenience in the short term, politicians may, in the long term be more reluctant to allow more marina developments, for example. After all, a small numbers of owners can only wield a small number of votes. It’s clear that yachting’s positive impact is woefully underestimated and misunderstood. Being confrontational will be counterproductive. As owners, we don’t want yachts to be on the political agenda. They exist, after all, for quiet enjoyment. But it’s as well to be prepared, with facts and figures at the ready, to respond to false accusations. And we may need to educate stakeholders and agitators quietly behind the scenes. PORTALS FOR THE REDISTRIBUTION OF WEALTH The most fundamental error is to consider a yacht purely as an asset – rather than a place of employment and worker accommodation. They are communities of individuals, most of whom are very well paid, and many of them are also entrusted to spend significant amounts of their employer’s hard-earned money. Whatever one’s views on the technical efficacy of trickle-down economics as part of a macroeconomic strategy, the boost to coastal economies is difficult to ignore. And this isn’t money being paid to an élite of lawyers and investment managers: it’s being paid directly into the accounts of waterside retailers and suppliers. Who, in turn, buy stock, employ staff and pay tax, leading to a significant quasi-Keynesian multiplier effect. BUYERS ALREADY PAY A PREMIUM Yachts are easy targets, because they are perceived – rightly – as being luxurious. But luxury isn’t just about opulence. Luxury is the combination of desirability and scarcity. Taking this to an extreme to illustrate the point, consider an expensive 50 year-old single malt Scotch whiskey. It’s matured in white oak barrels which – very slowly – allow some of the liquid to evaporate. There’s less and less of it as the years pass. So if this is what your heart desires you’ll pay more for it. The whiskey may or may not be any better than a 10 year-old dram, but it’s subjectively more desirable and objectively much scarcer. A yacht’s component parts are made in small numbers and/to an unusual specification. Producing them can be risky and unattractive for suppliers so they will demand higher prices. And precious few yards have the experience or equipment to craft the vessels themselves. All of this means that buyers pay significant premiums for yachts. As Mark Twain put it in The Adventures of Tom Sawyer (1876): " Tom … had discovered a great law of human action, without knowing it – namely, that in order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain. " MODEST CREW BACKGROUNDS Long gone are the days when crewmembers came from privileged backgrounds – perhaps the children of the owner’s friends, or just sporty types whose leisure and social lives centred around prestigious yacht clubs. Like owners today, crew come from a wide variety of backgrounds – maybe having grown up in workaday towns situated far from the sea. They also come from all over the world, and must adapt quickly to a life afloat. The Owners Club is actively looking into ways to widen further the appeal of a career working on yachts – helping to make the industry as professional and meritocratic as possible. STATE-OWNED HARBOURS Mooring fees – together with harbour dues and associated services costs – form a significant outgoing for many yachts. While most marinas operate on a concession basis, it is usually the government or local municipal authority which owns the facility, and to whom the operator pays significant sums. These boost local coffers which are used to pay for vital local services which the whole community benefit from. REDUCING DEMAND FOR PROPERTY Recent decades have seen demand for property rise steeply. And as, in the most part, they stopped making land years ago, prices have risen accordingly. Starting in European capitals, a ripple effect then affects all parts of the relevant country. The result is property which is too expensive for most first-time buyers. They end up without a physical stake in society. Their lives are more transient, less settled and less secure. At the top of the property-owning tree, the world’s wealthiest can own multiple residences, each of which is perhaps only occupied for part of the year. Reducing a property portfolio in favour of a yacht purchase reduces demand at the highest end of the market, which should – eventually – reduce inflationary pressures at the bottom. Not by much, one suspects, but every little helps. HIGHLIGHTING MARINE POLLUTION The more time one spends afloat, the more one is aware of the amount of pollution entering the sea and the food chain – especially in the form of plastics. The owners of large yachts are better placed than anyone to actually address the issues beyond making changes to their own habits. They are likely to own companies which can introduce behavioural changes on a massive scale. Or they may own media outlets which bang the drum of change. Or they may know politicians who can enact change. It is impossible not to be moved by the beauty of the marine environment, or outraged at seeing it compromised. Owners are in the position to act. YACHTS INSPIRE SOCIETY French philosopher Roland Barthes wrote in Mythologies (1957): “ I think that cars today are almost the exact equivalent of the great Gothic cathedrals; I mean the supreme creation of an era, conceived with passion by unknown artists, and consumed in image if not in usage by a whole population which appropriates them as a purely magical object. ” In today’s context, this description applies to yachts far more than cars. And such sentiment is nothing new. Economist and key Enlightenment figure Adam Smith opined in his 1759 book The Theory of Moral Sentiments : “ The pleasures of wealth and greatness … strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it .” And so it is that, by symbolising wealth and success, yachts serve to inspire entrepreneurs to redouble their efforts. They encourage everyone inclined to do so, to work hard, take risks and use their imaginations. OWNERS INSPIRE CREWMEMBERS Owners’ energy, work ethic and meritocratic outlook often rubs off on the crewmembers who work for them. As crew usually do not have to pay income tax, and have little in the way of daily outgoings, when the time comes for them to come ashore they often do so with sufficient capital set aside to fund a new business. Many such enterprises will be related to yachting, but some will have nothing to do with their previous seagoing careers. Either way, yet more of the owners’ capital will be injected into economies far and wide. CONCLUSION Since the detention of certain Russian-owned yachts in early 2022, it looks at last as if large yachts can be rehabilitated from being seen in the popular imagination as icons of oligarchy to that which they were in previous times: symbols of success and the rewards for hard work and entrepreneurial élan. The possibility of future minority kickback shouldn’t be ignored. The benefits of yacht ownership are manifold for society generally. It is incumbent us owners to ensure, by supporting the Club and its aims, that all stakeholders understand the scope and extent of such benefits. The good news will be developed and deployed as needed. Other than that, let’s just get on enjoying the fruits of our labours and investments. To quote Eleanor Roosevelt: “ The purpose of life is to live it, to taste experience to the utmost, to reach out eagerly and without fear, for newer and richer experience .” Return to top Thank you to all our Members who provided perspectives for this white paper. It is possible that political protests targeted at yachts and yachting infrastructure become more common. But such outcries are based on a complete ignorance about the nature and scope of the societal benefits flowing from ownership. It is up to us owners to inform and educate, as and when this is needed, and undertake research to support axiomatic assertions. 15 November 2022 Last revised minutes 6 Reading time minutes 6 Reading time 15 November 2022 Last revised It is possible that political protests targeted at yachts and yachting infrastructure become more common. But such outcries are based on a complete ignorance about the nature and scope of the societal benefits flowing from ownership. It is up to us owners to inform and educate, as and when this is needed, and undertake research to support axiomatic assertions. Large, permanently-crewed yachts face misconceptions and challenges related to their environmental impact and public perception. It is important for us, as owners, to understand and communicate the positive aspects of yachting to counter this. Yachts are not just assets; they are floating communities, providing employment and contributing massively to local economies. Crewing provides employment for indivuals from all backgrounds. Yacht purchases can also reduce demand for expensive property and inspire society as symbols of success. We are in a position to drive environmental change through our businesses. Yachts can also inspire crewmembers to pursue entrepreneurial endeavors. Ownership should be seen as a positive contribution to society, and we have a responsibility to promote and educate others about its benefits. 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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

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

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

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

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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? 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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

Selling a yacht should be relatively easy. Assuming the price is realistic, there'll be a buyer out there. Connecting with that buyer, however, can be unnecessarily complex. Current business models mean that otherwise viable deals can sometimes fall though. This white paper considers the pitfalls in greater detail, and proposes a solution. Home Handbook White Papers / / Cut to the Chase A RISKY BUSINESS With assets of this size and nature, people buy from people – not companies. Yachts may be advertised by brokerages, but they aren’t sold by them. It’s the individual brokers who do the selling. They often work extremely hard – especially during shows – with an uncertain outcome. They’re patient and diligent, and their commissions are well-earned. They perform a crucial role . THE CENTRAL AGENCY When instructing your broker to sell your yacht, a Central Agency (CA) agreement is imperative. The agreement makes it clear that your broker is in charge of the sale, and will be rewarded no matter who actually sells the vessel (including you – so make sure you have explored your own network first). Your CA can provide a valuation, a marketing plan and produce marketing materials (at their or your expense depending on what you negotiate). At a stroke, scope for argument as to which party was the effective cause of the sale – and so owed commission – is eliminated. Understandably, without a CA agreement in place, most brokers are unlikely to go all-in to prepare the yacht for sale and make every effort to sell: it’s just too easy for third parties to argue that the broker claiming commission wasn’t in fact the (or an) effective cause. Standard form agreements are available, but many of these are poorly drafted, so contact us to have this checked and amended. A pre-determined sales price is often the default setting, but some brokers may prefer a net-to-seller figure, which they can adjust up or down as they see fit. MULTIPLE LISTING SERVICES A Multiple Listing Service (MLS) is a database used by brokers (whether CAs or not) to share their listings, in order to reach a wider audience. MLSs usually have their own public online marketplace, and may supply listings automatically to subscribing brokers’ websites, through an application programming interface (API). The use of MLSs (and certain brokers’ associations require their use) can lead to very broad market penetration for the seller, potentially leading to a quicker sale, but there are drawbacks. Use Google Lens and you’ll find identical images posted by numerous brokers. It's not clear which broker has a direct line of communication with the seller. Where a yacht is listed on a marketplace website (and it’s these which tend to come up first when searching online) it is easy to assume – wrongly – that the broker named in the listing is the CA. The use of API-powered automatic listings may mean that the listing broker knows nothing about the vessel, and may be unaware of the listing itself until an inquiry comes in. The CA’s own website listing, meanwhile, will be languishing well behind on Google simply because the CA’s website’s SEO can’t compete with that of the MLS. The potential buyer is none the wiser. Also, by having the vessel listed everywhere, it's possible that the seller can look somewhat desperate. Nevertheless, once a second so-called ‘buyer-broker’ is involved (i.e. a broker acting for the buyer) they will be entitled to a share (a half or thereabouts) of the commission. Their brokers’ association rules may require it. With chains of communication also stretched, negotiations can become protracted while passions cool and interest fades. CLASS ACTIONS Various class actions have been brought in respect of MLSs. In Ya Mon Expeditions LLC v International Yacht Brokers Association Inc et al , the plaintiff brought an action, in February 2024, against 16 defendants, claiming, in essence, that (in violation of US federal antitrust law) brokers’ associations are requiring members (i) to list all their vessels on an MLS (which may also be owned by that association), and (ii) to follow non-negotiable commission-splitting rules. Ya Mon claimed that “ most buyer-brokers will not show vessels to their clients if a seller is offering a lower buyer-broker commission, or will show vessels with higher commission offers first ” meaning that “ sellers are incentivized when making the required non-negotiable offer to procure the buyer-brokers’ cooperation by offering a high commission ”. Ya Mon also claimed that the defendants’ business practices are anti-competitive, with buyer-broker commissions being about 4% to 5% which is artificially elevated beyond where they would be in a free market. In Defosey v Boats Group LLC et al , a plaintiff brought another class action, in May 2024, against some 18 defendants, making broadly the same claims as Ya Mon , arguing that broker associations’ rules “ force sellers to pay a portion of the commission … to the buyer-broker, someone who provided no service to the sellers ” and, as the commission paid to the buyer-broker is not subject to negotiation between the buyer and his/her broker, such rules prevent competition among buyer-brokers based on their commission rates. A similar case was pleaded in Magna Charter LLC v Boats Group LLC et al . At the time of writing (October 2024) Ya Mon is ongoing, while Defosey and Magna have been terminated, presumably because these have been settled or consolidated with other class actions. MLSs made a lot of sense where potential buyers would drop by their local harbourside brokerage and might have been interested in a vessel details of which weren’t displayed in the window. But they make less sense in a world where most buyers look online, and could reach out directly to the CA – if only they understood the pitfalls of not doing so, and knew where to look. FAKE LISTINGS Incredibly, some brokers will post on their own website, or an MLS, without even having been appointed as CA. Maybe they've had just a conversation with a friendly captain. Indeed, with so much at stake, truly unscrupulous brokers might list your yacht for sale without your broker’s permission – copying photos and plans regardless of copyright infringement. But a sales lead is a sales lead (assuming he or she has been qualified as being a bone fide UHNWI which doesn’t always happen) and such unethical business practices can be overlooked. If you see your yacht advertised with other brokerages, check to see that your CA agreement has permitted this. Unauthorised listings must be removed as soon as possible – before the content is indexed by search engines. PROPOSED SOLUTION In some cases, a commission of 10% can be perfectly reasonable – especially given the sheer amount of time, effort, outgoings and risk involved. The signing of CAs are widely (and proudly) publicised within the large yacht sector, with press releases circulated on LinkedIn and some specialist media outlets. Ideally, buyers would check through these to make sure that they’re dealing with the CA, and negotiate directly with them. Yet, seemingly, they don’t. Many buyers won’t even know what a CA is or does. They will see a yacht advertised and (not unreasonably) make inquires. As soon as they have done so, the advertiser will often have become what the law calls an “effective cause” and will be entitled to some of the commission – over and above any broker association rules requiring payment. The additional step added by the use of buyer-brokers causes delays and miscommunications – especially where there’s a mix of time zones and first languages. As well as educating would-be buyers as to the role and importance of the CA, the solution is surely to list as many CAs as possible, in one place. The CA agreements will need to be checked, prior to listing, in confidence, by a lawyer (the key information contained in the agreements (i.e. the name of the vessel and its registered owner) is freely available to the public anyway. If a potential buyer wants as second opinion on the asking price, an independent valuation can be obtained. Lawyers and surveyors are there to advise the buyer on legal and technical aspects. Return to top Thank you to all our Members who provided perspectives for this white paper. Selling a yacht should be relatively easy. Assuming the price is realistic, there'll be a buyer out there. Connecting with that buyer, however, can be unnecessarily complex. Current business models mean that otherwise viable deals can sometimes fall though. This white paper considers the pitfalls in greater detail, and proposes a solution. 16 October 2024 Last revised minutes 5 Reading time minutes 5 Reading time 16 October 2024 Last revised Selling a yacht should be relatively easy. Assuming the price is realistic, there'll be a buyer out there. Connecting with that buyer, however, can be unnecessarily complex. Current business models mean that otherwise viable deals can sometimes fall though. This white paper considers the pitfalls in greater detail, and proposes a solution. Brokers perform a vital role i n yacht sales, with Central Agency (CA) agreements protecting commissions and streamlining the process. By contrast, while supposedly broadening market reach, Multiple Listing Services (MLSs) can lead to confusion and delays. Class actions have been brought against MLSs in the United States. The proposed solution is to independently authenticate and centralise CA listings, maximising efficiency and transparency. You can also read about Deposits Reimagined Questions or comments? Please contact us Join the discussion over in the Club's group You can also read about Deposits Reimagined Questions or comments? Please contact us

The Owners Club started with a chance meeting between two owners racing in the Superyacht Cup. They wondered if yacht owners, could speak with one voice, and share best practice, when buying, building, owning and selling. They also thought to pool their considerable buying power to negotiate discounts for insurance, finance and lawyers fees. Home About Genesis / / A Fresh Start COMMON SENSE FOR UNCOMMON WEALTH FAQs Why is it that, while we can innovate, build strong businesses and drive economies forward, our voice as yacht owners remains so quiet? Sure, our brokers, managers and captains have our backs, but they’ve got their hands full. Who’s there to take a high-level view of ownership? Who’s there to provide guidance so we’re not each taking advice and reinventing the wheel? Who’s drafting the agreements and documents we have to have in place? Shouldn’t we be working together? Yes. It’s common sense. I can’t believe we’re all taking advice on pretty much the same things – crew employment, taxes, etc. It’s great to see owners and their reps come together like this. CAPTAIN 72m MY FROM COMPETITION TO COOPERATION Contact Us It all started with a chance meeting between two owners. Sitting on the rail of a Superyacht Cup competitor, they wondered why yachts were subject to so much regulation. Protecting seafarers on large ships, many of the complex rules are arbitrary and inconsistent when applied to smaller vessels. Could this be put right? Yes, if only we, the owners, could speak with one voice. And if coming together, let's share best practice, rather than seek expensive advice at every turn. And why not pool our considerable buying power to negotiate discounts?

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