The sinking of M/Y Yogi brought to the fore the crucial distinction between building a superyacht to class, and owning a superyacht that is maintained to class. And although the industry may understand the importance of the latter, it may not be immediately obvious to the owner. With this in mind, The Superyacht Owner approached a broad spectrum of industry professionals with the following questions.
Carlo Russo, Senior Specialist, Passenger Ship Support Centre, Lloyd’s Register
During the past 10 years, superyacht owners and operators have become increasingly aware of the need for their vessels to be in class. This extra vigilance has spread to yachts’ crews and technical management companies, who all strive to make sure vessels comply with today’s increasingly regulatory environment.
Above all, owners and operators realise the contribution a class society and its surveyors make to the technical aspects of their yacht’s construction and maintenance. Not only that – a modern class society offers training courses in all aspects of classification, statutory surveys and many marine advisory and tailored services that go beyond class.
So as well as the implications that a classed vessel has for both banking and insurance purposes, she is undoubtedly more attractive to potential buyers and charter companies.
Keeping a vessel in class will reassure owners of her structural strength – and where necessary the watertight integrity – of all essential parts of her hull, machinery and equipment, the safety and reliability of the propulsion and steering systems plus any extra features and auxiliary systems that have been built into the vessel.
To maintain continuity, the class society surveyor makes periodic visits to ensure vessels comply with the rules and regulations, and if any significant defects or damage should occur between visits, the owner or operator must inform the class society. Similarly, if an owner wishes to make any modifications to his yacht that affect class, he must receive prior approval from the class society.
John Leonida, Partner, Clyde & Co
Whenever you drive a car off a forecourt, be it new or second hand, you instinctively know that you cannot do anything to the key elements of the car without making that car illegal to drive on the road. Not only does the car lose its road-legal status but it is likely that your car insurer will probably cease to cover you in the event of any accident.
Even if you make no modifications, an obligation falls upon you to maintain the car in a way that is safe not only for you but for other road users. The same applies to yachts.
It is not uncommon for owners not to appreciate that the moment the yacht is delivered from a builder to the owner, the responsibility for dealing with class becomes the owner’s. The obligation falls on the owner to liaise with class after delivery when the yacht has any works done, by any yard (including the original builder), that might affect class.
The consequence of failing to notify class could be detention by port state control and also an insurance warranty breach, which would allow an insurer to potentially avoid coverage.
But what does it mean to notify class? In simple terms, you tell them what has happened, if there has been a casualty, or is to happen, in the case of planned works, and they will advise you on what to do next. They may say to you that you should not go to sea until the matter has been resolved, or they may say that they do not consider it to be serious and that it should be corrected when the yacht next goes into dry dock or next has a statutory survey, and in the meantime they will put a note on the class records for that yacht which will be removed once the issue has been resolved.
An owner ignores class at its peril. Safety must always come first and it is better for a yacht manager or a captain to deal with any potential issue head-on and notify class, rather than consider a matter so trivial that it does not require notification and then find out he is sailing a yacht with suspended class and open to detention by port state control.
Anthony Gradwell, Founder and Managing Director, Manta Maritime
I think it’s fair to make a generalisation that most owners are now aware that their yachts must comply with some mandatory rules, even if they don’t know exactly what. In the past 12 months I have worked for two owners who have bought new yachts for the first time, and both had a surprising comprehension of the certification process; the owner of the 100m-plus vessel even asked me if the class society needed to be informed of some minor structural changes we intend to make!
What I think most owners don’t understand is why their yachts must comply with various regulations. Perhaps yacht owners need to be more aware that compliance with classification society and Large Yacht Code requirements are only mandatory if they want to register or operate the yacht in a capacity other than purely privately. In contrast, however, there have been at least a couple of cases where private yachts have been sold to owners without this certification, and only later have they realised that not only is the market for resale massively reduced because they cannot charter, but that retrospective compliance is practically impossible. For this reason an owner needs to be given all the options and advised of the pros and cons of each – before the contract is signed. However, I personally believe it would be foolhardy for any owner not to insist that their new yacht is class and Large Yacht Code compliant.
It is common knowledge that maritime accidents can and do cause loss of life and environmental disasters. Therefore owners should, and generally do in my experience, accept that some degree of regulation is required, and it’s our job as an industry to explain it to them and to concentrate on the benefits rather than any drawbacks.
AJ Anderson, Managing Director, Wright Maritime Group
Owners understand that they are required to maintain their yachts to class and flag certification or risk a number of financial and operational consequences. Owners do rely on their managers and captains to ensure that all certification is maintained, relieving themselves of the concern in the same way as they might with other assets.
The key consideration is that surveys and compliance audits will take place and they can be scheduled in a way to mitigate cost and scheduling interruption. Owners should expect that the manager and captain plan scheduling of survey/maintenance periods in a way that maximises what can be achieved during the period and minimises cost and time consequence. The impact of survey and auditing should be minimal to an owner. The costs related to maintaining the yacht in class is a fraction of the operating expense and, when well planned, the scheduling impact is mostly absorbed into the normal maintenance planning.
Adrian Mc Court, Managing Director, Watkins Superyachts
The key considerations for owners are a) safety, and b) resale value. Show me a yacht that was built to class but has allowed class listings to lapse, and I’ll show you a yacht that is worth zilch. Try Dubai or Al Salamah; I’ve been looking for a buyer for Al Salamah for a year. It will eventually rot alongside.
Do owners understand this problem? I believe that beneficial owners of commercially registered yachts absolutely understand, as it will be a condition of maintaining commercial status. With regard to private owners, however, I’m not sure. I have my doubts about one or two, as outlined above, but it’s really up to captains, managers or owners’ reps to make sure that they do.
This article originally appeared in The Superyacht Owner.