How Latest Enhancements in the MYBA Charter Contract Impose New Challenges and Opportunities for Yacht Owners

The MYBA Charter Contract recently underwent a major overhaul, marking the most extensive modification since its initiation. The once familiar language has given way to a more sophisticated framework replete with novel mandates for yacht owners. This shift from predictable norms sees yacht owners navigating through an ocean of new responsibilities and confined deadlines, and treading the murky waters of escrow security. The first wave of changes came through compliance norms, demanding stronger financial due diligence under clauses 26 to 29. Owners are now required to submit detailed documentation including passport scans, PEP disclosures, and certifications of ultimate beneficial ownership. Similarly, charterers too have to combat the grind of this exhaustive scrutiny. Aimed at fortifying the industry against sanctions breaches, the application of these measures, especially during peak times, could be brutal, clogging the process with delays and detentions. Yet another trial by regulations is the requirement for yacht owners to adopt stringent anti-money laundering procedures, params that hitherto applied only to charterers. This burdens them with additional expenses as they need to engage third parties for assessment and reporting. Non-compliance or delay in compliance can result in heavy fines and the possibility of vessels being held up. In a nod to the digital era, MYBA’s force majeure clauses have been expanded to include events like ransomware attacks and sudden port closures. Though the intent is to safeguard owners, the strict deadlines tied to them can be tricky. Owners must alert charterers within 48 hours of the incident and furnish irrefutable evidence within a week. Failure to do so can lead to forfeiture of the safety net the force majeure clause offers. A subtler yet significant change is in the ‘Entire Agreement’ clause. The contract now discounts any informal assurances unless provided in writing as Special Conditions. This radical shift can potentially affect traditional interactions and promises between brokers and owners. Navigating these tempestuous seas of change, yacht owners must prepare to face these challenges and turn them into opportunities, keeping a vigilant eye on the changing horizon of the MYBA Charter Contract.