On 2 July 2024, a judgment of the Arnhem-Leeuwarden Court of Appeal was published in a dispute concerning a yacht that sunk shortly after launching (ECLI:NL:GHARL:2024:4331). The same case was previously the subject of an interlocutory judgment (ECLI:NL:GHARL:2023:1190).
Facts presented
A buyer purchased a yacht from the director of a shipyard in September 2015. In October 2015, on the director’s recommendation, the buyer instructed the yard to take the yacht out of the water and put it into winter storage. During that storage, the buyer boarded the yacht several times and instructed third parties to carry out work on, among other things, the sanitary facilities. At the end of May 2016, the yacht was launched again in the yard’s harbour. In doing so, the yard informed the buyer about the daily demurrage rate to be paid. On 1 June 2016, the yard informed the buyer that the yacht had partially sunk. The buyer instructed the yard to lift the yacht and carry out the required repairs. The yacht was then placed on the yard’s quay.
The yard claims compensation for the demurrage and repair work. The buyer seeks to be indemnified by the director for all costs to be reimbursed by the buyer to the yard, arguing that the yacht was non-conforming because it had sunk and the buyer could therefore not remove the yacht from the yard.
The court grants the yard’s claim against the buyer, and dismisses the buyer’s claim against the seller.
Court considerations
The court considers that the yacht had been in the water prior to the sale, and that the buyer had inspected the yacht several times, as well as test-sailing it. Also after the sale, the yacht was in the water without any report of any leakage. Likewise, when the yacht was in winter storage, no mention was made of damage that could explain the leakage. At none of these times did the yard carry out any work on the yacht or damage the yacht, the court said.
In contrast, the buyer did spend some time on board on 1 June 2016. However, the buyer did not explain what happened prior to the sinking. Moreover, the yard claimed that when the yacht was hoisted out of the water, the taps of a toilet placed below the waterline were open. The court therefore considers that the buyer had not made it sufficiently plausible that the cause of the yacht’s sinking could be attributed to someone other than the buyer himself.
The court accordingly grants the yard’s claim for compensation for demurrage and repairs.
Lessons learned
This case shows that the mere fact of sinking does not make a yacht a non-conforming product. The buyer will have to argue and, if contested, prove that the cause of the sinking was within the seller’s risk. The buyer failed to do so in this case, partly because he failed to provide further information requested by the court.
If this had been a consumer sale under Dutch law, the buyer would have been entitled to invoke the statutory presumption that a defect is present at the time of delivery if it is discovered within one year of it. It would then be up to the seller to prove otherwise. The judgments do not seem to assume that there was a consumer sale. This may be due to the capacity of the buyer. However, the fact that the yacht was not sold by the yard but by the director may also mean that it was not a consumer sale. It is advisable for buyers in such a case to stipulate that the sale is made by the legal entity, i.e. the yard.
We have extensive experience in drafting contracts for the sale of yachts and litigating such contracts on behalf of yards and buyers. If you have questions about the content of such contracts or need an analysis of your dispute, please feel free to contact us.
