A shipyard or repair shop may hold on to your vessel as long as you haven’t paid the bill. That’s called a lien. But what if you profoundly disagree with that bill.
Both the HISWA and the NJI conditions contain a provision stating that a supplier/contractor may retain an item to be delivered by him (e.g. hull or vessel) or an item which he has in his possession in the context of activities to be performed, until the counterparty/client has paid the claims. In other words, under a contract concluded between the parties, a shipyard may refuse to deliver a ship to be delivered or a ship on which work has been carried out as long as the customer has not (yet) paid the outstanding invoices. This is a powerful collection tool of a yard which unfortunately is often abused in practice, as the following issues illustrate. However, you do not always have to accept this.
Huurdeman concluded an agreement for the construction of a motor yacht for an amount of € 155,000. The yacht was to be delivered at the end of 2009. Huurdeman wanted to use the yacht at the start of the 2010 sailing season to charter with disabled children. Between the parties there was great discussion because at the end of December 2009 there were still several defects on the ship that the yard did not want to repair. Huurdeman had almost paid for the boat in full. The yard then came up with a final invoice of almost 14,000 euros which was largely disputed by Huurdeman. The yard appealed to the right of retention on which Huurdeman started summary proceedings. His argument was that he had an urgent interest in delivering the ship in connection with the operation for charter shipping and that the final invoice was unjustified because of additional work that had not been agreed. For the rest he suspended payment of the invoice in connection with the defects of the ship. The court in preliminary relief proceedings ruled that the balance of interests with respect to the surrender and transfer of the vessel had to turn out in Huurdeman’s favor, since only 5% of € 155,000 still had to be paid and “it should not be deemed implausible in advance that Huurdeman would be vindicated in proceedings on the merits with respect to the alleged defects”.
In a second case it turned out that a marina had carried out an osmosis treatment totally wrongly and that the final effect of the treatment was exactly the opposite of what was intended. Because the hull was too wet when the layer was applied, the moisture was actually trapped instead of being kept out. The marina came up with the very transparent defense that work had not been performed improperly because osmosis had not yet occurred. Mr. Pieterse refused to pay the invoice of 3,500 euros and the marina subsequently refused to surrender the vessel. This, incidentally, after they had already indicated that they would not be carrying out the work again. Here too summary proceedings brought a solution and the court concluded that reasonableness and fairness required the marina to surrender the vessel, especially since the yard had already held the vessel for a full season for an amount of €3,500. In a third case, a repairer even managed to refuse the delivery of the vessel because of unpaid invoices of which the payment term had not even expired yet!
What can you do in case of a dispute with the yard when it invokes the right of retention and you do not want to go to court immediately? You can choose to pay the invoices expressly “under protest.” This means that you can always come back to it at a later date but in any case you will have the vessel at your disposal. If you are afraid that the money will have disappeared when you start proceedings against the yard (e.g. because it is in a bad financial state), you can also offer to pay the money into the third-party account of your lawyer. The last possibility is to provide a bank guarantee against the yard’s alleged claims. After the court has decided whether the claim is justified or not, the bank guarantee can be called upon. In this way the yard has security for payment of what it may eventually claim, without you losing the money immediately if the yard goes bankrupt. Which is not inconceivable in this day and age. If all this remains fruitless or the position of the shipyard is so unreasonable that you really cannot accept it, go to the judge who can often resolve a dispute in summary proceedings.
More information or download old articles: https://www.anwb.nl/kampioen/algemeen/digitaal-archief