Everyone (unfortunately) has to deal with a client who fails to pay outstanding invoices for reasons beyond his control. The reasons can be diverse: disagreement about the quality of the delivered work/ additional work or simply lack of money on the part of the client. Meanwhile, the yard is left with a (half) finished boat, completed painting and carpentry or installation work. What are the possibilities, as it is called, to recover/secure the payment of the claims?
Fortunately there are several possibilities, which are also included in both the general conditions of the NJI and the HISWA, but under which circumstances which means can be used? The major problem in the event that work has been performed and no concrete product has been ordered/installed, then that performance cannot be undone. After all, if specific items have been ordered and they are not paid for, then the yacht builder can keep them under his
and possibly sell them on again, but a completely executed painting job on a client’s ship cannot be reversed. In any case, there must be a so-called due and payable claim. This means that the payment term of the sent invoices must have been exceeded. The law stipulates that the term of payment used, which is probably stated on the invoice or included in the general terms and conditions, counts as a so-called fatal term and that the debtor/client is legally in default after expiry of this term.
In this situation so-called precautionary measures are possible, popularly called ‘seizure’. This can be done on all kinds of assets belonging to the debtor (his house or bank account) but the easiest way is of course to seize the object on which the yard has worked, his boat. Permission to do so is granted by the court through a lawyer and a petition and in certain situations there can be the ‘chaining’ of the vessel. After all, attachment is nice, but remains a paper act. Thus, to prevent the ship from disappearing, it can actually be physically ‘chained’. In such a case, the ship cannot leave and the yacht builder can quietly reach a solution with the principal, whether or not through the courts, and he has the certainty that there is also something to gain from the assignment of the claims.
A slightly more far-reaching method of attachment is to ask for sequestration. The yacht builder then asks for a so-called judicial custodian to be appointed (for example, a marina) and requests that the vessel be taken into custody there. The vessel is then removed there and, as a rule, dry-docked as well, which provides even more assurance that no one will make off with the vessel.
If the vessel is still in the yard/company yard/shed, there is another easier way to preserve its right, which does not require going to court first. This is the so-called right of retention. The law stipulates that if one party fails to meet its (financial) obligations towards another party, the latter is entitled to suspend its corresponding obligation to deliver the vessel. This is called the “exceptio non adempleti contractus.
Put very simply: If the claims are due and the vessel is on the yard premises or on/in the premises/shed that the yacht builder rents, it is sufficient for him to hold the vessel until a solution is reached. The right of retention is a simple and very powerful tool to enforce payments. Keep in mind that if, for example, the client provides a bank guarantee because he believes he has actual substantive arguments for not paying (and the dispute must therefore be fought out in court), the yacht builder can be held to surrender the vessel. After all, instead of holding the vessel as security for payment of his claims, the yacht builder receives a bank guarantee.
The right of retention is so strong that if, for example, a client goes bankrupt the yacht builder can also invoke it against a receiver, arguing that his efforts have preserved the vessel or even increased its value. Even if the vessel is sold in the meantime the right of retention remains intact and can be invoked against the new owner.