LEGAL
The legal advice is not always about the money, there are also far more practicable and operational questions being fired at these legal experts. “Typically when a captain reaches out to us it is because they need urgent, practical advice,” says Bulfin. He continues, “For example, we had a situation once where a captain called during a yard period with concerns that if action wasn’t taken immediately his yacht would fall victim to overspray from an upwind vessel about to be repainted with no environmental protections in place, and we gave that advice without delay.”
With the ownership of superyachts on the rise, it is vital that these new entrants receive the right advice. Tax and VAT regulations are at the forefront according to Mousny, “While advising our client on pre-purchase and new build yacht-related matters, the first subject matter is to select the most adequate flag State of registration for his/her yacht.” He continues, “The intended use of the yacht is also of utmost importance most notably while contemplating the treatment that the yacht will be subject to from the Maritime Authority of the flag State or while appraising the tax implications related to the acquisition and the operation of the yacht, both in terms of VAT regulations and corporate income tax.”
Protection of these new owners is paramount for the industry as a whole, if they receive the right advice and enjoy the ownership journey then it can only be a good thing for the industry. Bulfin confirms this, “For many new yacht owners, what they are really looking for is a non-partisan professional advisor to guide them through the process of purchasing their first yacht to try to avoid making errors due to inexperience. We have also seen all too often first-time-buyers being hurried into deals without the right team of advisors around them.”
Due diligence concerning new build or refit yards is also paramount to protect the owners’ interests and even though we’re seeing an upsurge in the industry as a whole, global economic situations are not positive at times. Edouard Mousny confirms this is a vital part of their relationship with an owner, “Our first crucial consideration in respect of our clients is to assist them while selecting the shipbuilder with whom the shipbuilding agreement will be concluded. To that end, we usually investigate and audit the financial creditworthiness and professional reputation of the contemplated shipbuilder.”
Ensuring a smooth new build or refit project will always come down to a clean, well defined and concise contract and this is where our legal eagles come in to play. “The standard of shipyard build contracts varies dramatically. Many of the more prestigious yards’ standard terms are relatively fair to the buyer/owner, but there is still always substantial scope to improve the terms, both in the client’s interest, but often in the mutual interest of both parties. As important as the underlying contract is, the associated specification is also key, as without it there is little point in having a commercial agreement,” explains Bulfin.
In the past two years we’ve seen many of these contracts tested to their limits. Quentin Bargate, Founder and CEO of Bargate Murray says, “Force majeure has been a hot topic, most notably with COVID-19, but also more recently with the knock on effects of the war in Ukraine. Prior to COVID-19, many force majeure clauses hadn’t really been tested. Now we are in a position whereby most force majeure clauses drafted previously have been tested in the real world, and those which have been drafted since March 2020 are specifically drafted to account for pandemic risks such as COVID-19.”
UPWIND LEGAL Upwind Legal is located in the heart of Hamburg and headed by the two partners Julia Wiechell and Martin Malinowski. The law firm offers highly specialised legal advice, expertise, long-standing experience and a comprehensive global network. The specialised yacht / superyacht team advises on all matters inter alia related to shipbuilding, sale and purchase, ownership structures (including partial ownership and time-sharing models), owner’s supplies, insurance, employment/crew, private and commercial registration, flag and class related matters, charter dispute resolutions, warranty claims, damages, accidents, broker commission dispute resolutions as well as all day-to-day operational and management issues. The firm’s comprehensive global network comprises inter alia owner’s representatives, yacht managers, project managers and naval architects, corporate service providers, sales and charter brokers, surveyors and technical experts, flag authorities, ship registers and administrative bodies, tax advisors and custom agents, crewing agencies, insurers and insurance brokers and much more. For more details Tel: +49 40 6077500 60 or visit
www.upwind-legal.de
ONBOARD | SUMMER 2022 | 129
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