Under all refit and repair contracts, the owner has several responsibilities.
There are specific obligations included in a refit/repair contract. The fulfillment by the owner of these requirements is essential. Both in ensuring that the work turns out to the standard required and in protecting the yacht from any damage that the yacht may suffer during and because of the work.
The first obligation facing the owner is to accurately identify any existing damage that may affect the yacht and its condition and structural integrity before the commencement of work.
Also, to provide the shipyard with any documentation and/or drawings needed to haul out and launch the yacht safely. As a consequence of this obligation, the contract expressly provides that the shipyard is exonerated from any liability for any damage that may be suffered by the yacht during hauling out or launching that are ultimately due, or attributable to, limited, inaccurate, or insufficient information provided by the owner.
Another obligation is for the owner to obtain and maintain all the necessary approvals and certificates relating to the yacht and the work required by the regulatory bodies covering the ship.
For example, the effect of this obligation is that the owner is responsible for verifying, before the commencement of the work, that such work does not affect the yacht’s classification categorization or MCA compliance.
Although required to provide all reasonable assistance, the repair shipyard shall not be liable should any such case arise because any related damage would still be the owner’s responsibility.
The owner maintains the risk for the yacht at all times and, is fully responsible for its stability, is required to advise the shipyard of any change in ballast or stability conditions.
Another important aspect is that the yacht shall, during the entire course of the work, remain under the owner’s complete and exclusive custody and responsibility. Consequently, the owner’s crew shall be responsible for all the yacht’s movements and shall be required to provide all necessary assistance to the shipyard.
The owner is further required to keep at least one crew member aboard the yacht at all times at the owner’s risk, liability, and cost to allow the shipyard access to all the various areas of the ship. Owner liability has a direct impact on insurance issues.
The owner shall, throughout the work, maintain hull and machinery insurance to cover any damage to the yacht, as well as P&I insurance to cover damage or injury which may be suffered by the captain and crew and/or any other personnel for whom the owner is responsible.
Such insurance coverage must be on terms comparable to internationally-used policy wordings for yachts of similar type and value.
Internationally recognized insurers shall cover the insurance for no less than the yacht’s market value and that copies of the related insurance certificates are provided to the shipyard before the arrival of the yacht.
It is further to be noted that the owner can be requested – if so stipulated, to pay the shipyard a contribution to the premium payable for the Ship Repairer Liability insurance, which the shipyard must maintain (SRL payment contribution).
The amount exceeds the insured value of the yard’s Ship Repairer Liability insurance policy. The insured value of shipyard coverage is typically not high and usually well below the yacht’s actual market value.
The owner is contractually required to provide, before hauling out or dry docking, a waiver of subrogation by which the owner itself and its insurers waive any claim against the shipyard and the shipyard’s insurers for damages to the yacht.
No comment