Recently I attended a seminar in London on “Yacht and Yachting Law” that was run by Filippo Lorenzon, director of the Institute of Maritime Law for the University of Southampton. The seminar heralded the launch of the first edition with the same name, a beautifully bound text, that covers “the whole nine yards” and while having an English/Euro Law focus those principles are easily transposed to other jurisdictions. Sitting amongst the other delegates, two things became quickly prevalent; a common interest in boating and the recognition of a special body of maritime law that covers dinghies to Superyachts.
The conference was held in the perfect venue, the Merchant Taylors Hall, built in fourteenth century and situated on Threadneedle Street in the heart of London. Its walls adorned with tapestries and paintings picturing lost maritime scenes, the presenters delivered their topics in an exquisite vaulted ceiling room that looked into a period court yard. The following selected topics exemplify some of the differences between the law for large commercial shipping (commonly known as maritime law) and their smaller sisters highlighted at the conference and directly applicable to marine business:-
Yacht Building Contracts
A topic that I believe highlights the difference between build contracts for ships and Superyachts as contracts for the later are generally specially drafted to meet the requirements of a special one-off build. These Build Contracts tend not to be in standard form as often the case with large commercial ships that may only vary the existing terms. The general nature of the Superyacht contracts being specially drafted to suite the circumstances and are predominately about payment, ownership of the materials used in production, the fit-out, and delivery. And apart from jurisdictional clauses that set the state law under which the contract will be interpreted and other statute based laws such as Warranties, the terms of a contract are negotiated between the parties to represent both their interests with minimal interference from state laws. Another area of consideration by the commissioning party, in these contracts, is the question of Class and Classification Societies, whilst not an imperative in the building where vessels are used for personal use, this has become a considered requirement in respect to future saleability of the vessel with clauses in the contract stipulating the build classification.
The historical nature of registration lay in the purpose of registration that is facilitating the merchant’s activities with the registration of pleasure craft not occurring until much later in history. It is thought that recreational boating commenced first in Holland and then in England when the Dutch East India Company made a gift of yacht “MARY” to King Charles ll. Later, as the number of pleasure craft increased the registration requirement became an issue and was resolved with the main criteria changing, under English law, with the measurement of vessels in length rather than Tonnage, which is consistent with large ships. More recently a common issue shared between England and Australia in respect to registration is that it does not mean ownership; merely registration refers to the port whose flag the vessel flies and thus what taxes and duties the owner might incur. According to the authors of the text there appears to be a shift away from registration under the British ensign toward other jurisdictions for tax benefits. And for those adhering to British commercial registration a revised system of eligibility has come into play called the “Large Commercial Yacht Code” (LY3) for super yachts and its equivalent for smaller vessel. Similarly, in Australia there is only a mandatory requirement for commercial registration to use a classification society and no requirement for pleasure craft.
The subject of mooring smaller vessels provides a significant separation from the question of mooring large ships. While similar methods are employed; size, use and the need to maintain the mooring play a significant part in defining this difference. The definition of mooring goes back to many early cases including the 1897 English case of Attorney-General V Wright where Lord Esher MR stated,
“It is such a mode of anchoring a vessel by means of fastening in the ground, either an anchor or something heavy, and a chain and buoy, as will allow of the vessel picking up the buoy when she returns to it, and so coming to rest”.
The learned Judge further stated, “every one knows who knows anything about navigation that there are two ways of anchoring a ship. There is the temporary anchoring by means of an anchor, which is lifted when necessary, and there is the more permanent mode by means of moorings”.
In stark difference to large ship mooring, moorings for smaller vessels are found up rivers, on lakes and in marinas and the form of mooring being; swing, post to post or where marinas are concerned either a fixed or floating dock to secure fast. In England there appears to be a shift away from the traditional forms toward marinas as the availability of traditional moorings becomes lesser, which in Sydney Harbour is certainly the case. However, travel north to Lake Macquarie or South where population pressures are much smaller and the traditional mooring forms are still prolific. Where there has certainly been development in Australian Marinas outside of the major cities is in respect to providing facilities for Super yachts and smaller cruising yachts as they navigate the coast. Apart from the obvious benefits to use the marinas when cruising, seafarers can avoid the draconian laws that don’t encourage visitors and limit a vessels stay when visiting the busier ports.
Safety and Compliance for Superyachts
This is an area of law where all commercial vessels are required to comply with the International Conventions of safety and pollution. However, there are practical constraints that make the International Marine Organisation (IMO) conventions impracticable to apply given the smaller size of the Superyachts. In England the LY3 code has been developed to simplify this job by bring all the relevant codes in to one text and making them applicable for sport and pleasure and commercial yachts alike. The IMO standards are not lowered but made relevant for this very special maritime sector with the LY3 replacing the LY1 developed in 1997 and LY2 developed in 2004. In Australia the National Marine Safety Committee (NMSC) has established national policies on commercially operated Superyachts. These provide a nationally consistent approach to govern the commercial operation of Superyachts that does not apply to foreign registered Superyachts conducting an international voyage, even under charter, when passing through Australian waters these vessels may be granted a temporary recognition as a commercial vessel for a designated period where they carry the relevant Certification such as LY2 (to be LY3) or an equivalent.
The brief touch on the topics above highlights some of the differences that sets shipping law and their smaller sisters apart. While historically maritime law has been considered about the transport of goods/ passengers between ports with the advent of new technology and a more affluent society a specialised area of law for Yacht and Yachting has been emerging. The text that underpinned the conference in London deals specifically with this emerging area and was certainly the crowning jewel. The presenters were exemplary and it was comforting to be sitting amongst peers who all recognised this special area of law. The conference was topped off with a dinner in celebration of the university’s 30 years of service to the maritime profession at Bond’s Restaurant, a fitting venue given the most recent 007 release.