Absent a clause, a yacht construction contract is governed by the law of the shipyard’s country (Rome I Regulation, article 4) and the dispute belongs to the court of the place of delivery, that is the yard (Brussels I bis Regulation, article 7(1)(b)). The Vienna Convention does not apply. A private buyer approached in France escapes these rules: he may sue before his own court and rely on French consumer law.
A Paris cardiologist orders in 2023, at the Cannes boat show, a 19-metre sailing yacht from a Tuscan yard whose French-language website and brochure promise “turnkey delivery for the Mediterranean”. The contract, in English, chooses Italian law and the court of Lucca. Delivered in 2025, the yacht shows a lamination defect in the centreboard trunk. The yard offers a repair in Viareggio, with the delivery trip at the buyer’s cost. The buyer asks: can he sue in Paris, under French law, despite the clause? The answer is yes, and the yard will find this out before the Paris judicial court, because it directed its business towards France and its client is a consumer.
This page deals with disputes between a buyer and a foreign shipyard: which law governs the contract absent a choice and what the governing law clause is worth, which court has jurisdiction and what the jurisdiction clause is worth, what changes when the buyer is a consumer, what arbitration brings and costs, how to obtain urgent measures against a yard that refuses to deliver, and how to enforce the decision obtained. The texts are those of EU law, which apply to Dutch, German and Italian yards, with the relevant pointers for yards outside the Union.
1. The law of the contract: the parties’ choice, otherwise the yard’s law
The contract is governed by the law chosen by the parties (Regulation (EC) no. 593/2008, Rome I, article 3(1)). Shipyard forms choose the law of the yard, or English law by tradition in the superyacht sector. Absent a choice, a contract for the sale of goods is governed by the law of the country where the seller has its habitual residence and a contract for the provision of services by that of the service provider (article 4(1)(a) and (b)); whether construction is characterised as a sale or a service, the answer is the same, the law of the yard. A French buyer who signs with a Dutch yard without a governing law clause has chosen Dutch law. Without knowing it.
The United Nations Convention on Contracts for the International Sale of Goods does not correct this result: it excludes from its scope sales of ships, vessels, hovercraft and aircraft (CISG, article 2(e)), even though it treats contracts for the supply of goods to be manufactured as sales (article 3(1)). The designated national law therefore applies in full, with its warranty periods and insolvency rules. The chosen law also applies in principle to the refund bank guarantee, unless the guarantee has its own clause, and the guarantee is often governed by the law of the issuing bank’s country, which differs from that of the contract. Finally, the overriding mandatory provisions of the forum apply whatever the chosen law (article 9(1)); international sanctions are the most topical example, and a French court will apply Regulation (EU) no. 833/2014 to a contract governed by Italian law.
2. The competent court: the yard’s domicile or the place of delivery
Absent a jurisdiction clause, a defendant domiciled in a Member State is sued in the courts of that State and, in contractual matters, for the sale of goods, in the courts of the place in a Member State where, under the contract, the goods were delivered or should have been delivered (Regulation (EU) no. 1215/2012, Brussels I bis, article 7(1)(b)). The Court of Justice has held that a contract for the delivery of goods to be manufactured or produced is a sale of goods, not a provision of services, where the buyer has not supplied most of the materials and the supplier is responsible for conformity, and that the place of delivery, absent a stipulation, is the place of the physical transfer of the goods by which the buyer obtained actual power of disposal over them (CJEU, 25 February 2010, Car Trim, C-381/08). For a yacht delivered at the yard after sea trials, the court of the place of delivery is that of the yard.
A jurisdiction clause rarely changes this result, since it almost always designates the yard’s courts. If the parties, regardless of their domicile, have agreed that a court of a Member State is to have jurisdiction to settle disputes which have arisen or may arise in connection with a particular legal relationship, that court has jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State (article 25(1)). The clause must be in writing or evidenced in writing, or in a form that accords with the parties’ practices or with international trade usage. A clause in the yard’s general terms to which the contract refers without reproducing them is open to argument; a clause signed in the body of the contract is not. The result is the same in both cases. The buyer litigates at the yard.
He may be willing to accept that. Litigating in Zwolle, Bremen or Lucca is not a disadvantage in itself when the dispute turns on technical questions that a court near the yard, with local experts, decides quickly. The disadvantage is financial and practical: local counsel, translations, travel, and enforcing a judgment against a yard whose assets are where it is. A buyer who prefers his own court will only get it by negotiating a clause designating Paris, which yards usually refuse, by an arbitration clause with a neutral seat, or by being a consumer.
3. The consumer buyer: his own court, his own law, despite the clause
The Brussels I bis Regulation provides a specific regime for contracts concluded by a consumer, for a purpose outside his trade or profession, where the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs such activities to that Member State (article 17(1)(c)). The consumer may then bring proceedings either in the courts of the Member State of the professional’s domicile or, regardless of the professional’s domicile, in the courts of the place where the consumer is domiciled (article 18(1)), and these rules can only be departed from by an agreement entered into after the dispute has arisen or which allows the consumer to bring proceedings in other courts (article 19). A jurisdiction clause in favour of the courts of Lucca, in the contract of a yard that exhibited in Cannes, ran a French-language website and negotiated with a private individual resident in Paris, cannot be relied on against him.
The Rome I Regulation follows the same logic for the governing law: a contract concluded by a natural person for a purpose outside his trade or profession with a professional who pursues or directs activities to the consumer’s country of residence is governed by the law of that country, and choosing another law may not deprive the consumer of the protection of the mandatory provisions of his own law (article 6(1) and (2)). The French private buyer can therefore rely, despite the Italian law clause, on the two-year statutory warranty of conformity with a presumption that the defect existed at delivery under the French Consumer Code (articles L. 217-3 and L. 217-7), and invoke it before the judicial court of his domicile. Most yards ignore this rule; their contracts do not deal with it, and their only answer is to argue that the buyer is not a consumer, which can be argued where the yacht is held by a company, operated in charter or bought by a marine industry professional.
The test of directed activity is applied in concrete terms: attending boat shows in the consumer’s State, a French-language website, prices in euros, an intermediary or broker established in France, advertising in the French boating press. A yard that does none of these things and was approached by a buyer who came to find it in Friesland has not directed its activity towards France. Between the two, the burden of proof is on the consumer, and the evidence is built before the dispute, by keeping brochures, emails and dated web pages.
4. Arbitration: what it brings, what it costs, what it cannot do
Superyacht construction frequently uses arbitration, in London under the London Maritime Arbitrators Association or in Paris under the International Chamber of Commerce. Arbitration has three advantages for the buyer. Confidentiality, which matters to buyers who do not want their name linked to a dispute. The technical expertise of the arbitrators, chosen from shipbuilding practitioners. And the circulation of the award, which the New York Convention of 10 June 1958 has recognised and enforced in more than one hundred and sixty States, which matters where the yard has assets outside the Union, or where the yard is Turkish, American or Taiwanese and a French court judgment would not be enforced there without exequatur.
It has two drawbacks. Cost, prohibitive for disputes below a few hundred thousand euros, since a three-arbitrator case under institutional rules rarely costs less. And the lack of effective urgent measures against a yard that refuses to deliver or return the hull, unless the state court is seized in summary proceedings, which the clause must expressly reserve. A well-drafted clause provides a seat, rules, a language, a number of arbitrators, an expedited sole-arbitrator procedure for warranty and delay disputes below a threshold, and the right for each party to apply to any competent court for protective or interim measures, including a court-appointed expert. As against a consumer, an arbitration clause is of uncertain validity, and a prudent yard does not impose one.
For how arbitral proceedings run and how to choose an institution, see our international arbitration page.
5. Urgent measures: arrest, summary proceedings, court expertise
Construction disputes are often decided before any judgment. The yard holds on to the finished yacht pending payment of disputed change orders; a yard in difficulty stops work; the yard refuses to return the hull after termination. Under French law, any person whose claim appears well founded in principle may ask the court for permission to arrest a ship (Transport Code, article L. 5114-22), and the arrested ship may not leave port unless the enforcement judge authorises one or more specified voyages on proof of sufficient security (article L. 5114-21). Arrest is the weapon of a buyer who fears that the hull he owns, or on which he has a claim, will be sold or moved; it is also that of an unpaid yard.
The summary application for a court expert is the other reflex measure, and the only one that interrupts the one-year period of article L. 5113-5 of the Transport Code as against the parties summoned. Against a foreign yard, it is made to the court of the place where the ship is, which is usually the yard’s court, but may be a French court if the yacht has been delivered and is in a French port. Provisional or protective measures available under the law of a Member State may be applied for in the courts of that State even if the courts of another Member State have jurisdiction as to the substance (Regulation (EU) no. 1215/2012, article 35). A buyer who discovers a defect in an Italian yacht moored in Antibes can therefore obtain a court expert’s report from the Grasse court, whatever the jurisdiction clause, and then rely on it against the yard.
6. Enforcing the decision against the yard
A judgment given in a Member State is recognised and enforced in the others without any special procedure and without any declaration of enforceability (Regulation (EU) no. 1215/2012, articles 36 and 39). A Paris judicial court judgment against a Viareggio yard is enforced in Italy on production of a copy and a certificate, and the Italian bailiff attaches the yard’s accounts and assets. This is the decisive advantage of the state court within the Union, and the reason why arbitration is not essential there. Outside the Union, the French judgment must go through the exequatur procedure of the yard’s country, and the arbitral award through the New York Convention, which circulates more reliably.
Enforcing a decision against a yard assumes it still has assets. That is the limit of everything above, and the reason why the buyer’s protection is not won in litigation but in the contract: an independent refund guarantee for advance payments is called without litigation, against a solvent bank, on a simple statement of default. The dispute with the yard then takes place with the money in the buyer’s account. A well-prepared dispute is one whose outcome no longer matters financially.
The exequatur procedure and its conditions are set out on our exequatur page.
7. Yards outside the Union: Turkey, the United Kingdom, the United States, Asia
For a yard established outside the European Union, the Brussels I bis Regulation no longer determines jurisdiction over the defendant, except for the consumer protection rules, which apply to a professional not domiciled in a Member State where it directs its activity to the consumer’s State (Regulation (EU) no. 1215/2012, article 17), and for jurisdiction clauses designating a court of a Member State (article 25). The United Kingdom, which left the European system in 2021, is now a third State; an English judgment no longer circulates in the Union under the Regulation, and a French judgment is no longer enforced in London without recognition proceedings, which explains the revival of arbitration in contracts governed by English law. The Hague Convention of 30 June 2005 on Choice of Court Agreements, to which the Union and the United Kingdom are parties, gives effect to exclusive jurisdiction clauses between professionals and allows judgments given on that basis to circulate, but it excludes consumer contracts.
With a Turkish, American or Taiwanese yard, an arbitration clause with a neutral seat and a bank guarantee issued by an EU bank are the only two instruments whose enforcement the buyer controls. The contract must add a sanctions compliance clause and a check, before signature, that the yard can deliver a yacht meeting the requirements of the intended flag, failing which the buyer wins a lawsuit and loses a boat.
The firm assists buyers and yards in yacht construction and refit disputes, before French and foreign courts and in arbitration, with correspondents in the Netherlands, Germany, Italy and the United Kingdom: contact us.
For a complete picture, our practical guide Building your yacht: a French or a foreign shipyard, which law are you choosing? compares the four national regimes, France, the Netherlands, Germany and Italy, and ends with a comparison table and model clauses; it can be downloaded free of charge. To have your own situation reviewed, contact the firm.
Further reading: Shipyard refusing to release a boat in France: the right of retention and how to get the boat back.
Frequently asked questions
My contract with a Dutch yard says nothing about governing law: which law applies?
Dutch law. Absent a choice, a contract for the sale of goods is governed by the law of the seller’s habitual residence and a contract for services by that of the service provider (Regulation (EC) no. 593/2008, article 4(1)), and both characterisations point to the yard. The Vienna Convention does not apply to ships (CISG, article 2(e)). Only a consumer buyer, approached in the Netherlands or in France by a yard that directs its business to France, can rely on the mandatory provisions of French law (article 6).
Is a clause designating the yard’s court valid against a private buyer?
No, where the yard pursues or directs its activity to the Member State of the buyer’s domicile and the buyer contracted for a purpose outside his trade or profession. The consumer may then sue in the court of his domicile, and this rule can only be departed from by an agreement made after the dispute arose or which widens his options (Regulation (EU) no. 1215/2012, articles 17 to 19). A boat show in France, a French-language website and brochure, or a broker established in France show directed activity. The clause remains valid between professionals and as against a company.
Can I obtain a court expert’s report in France on a yacht built in Italy?
Yes, if the yacht is in France. Provisional or protective measures available under the law of a Member State may be applied for in the courts of that State even if the courts of another Member State have jurisdiction as to the substance (Regulation (EU) no. 1215/2012, article 35). A summary application before the court of the port where the yacht lies also interrupts, as against the parties summoned, the one-year period of article L. 5113-5 of the Transport Code. The court expert’s report is then produced before the court dealing with the merits, in Italy or in France.
Should London arbitration be preferred to the yard’s court?
For an EU yard, rarely: a judgment of a Member State is enforced in the others without exequatur (Regulation (EU) no. 1215/2012, articles 36 and 39), and arbitration costs more without offering urgent measures. For a yard outside the Union, or where the yard’s assets are outside the Union, arbitration is the answer because the award circulates under the 1958 New York Convention in more than one hundred and sixty States. In every case, the clause must reserve the right to seek protective measures and court expertise from the state courts, and provide an expedited procedure for small disputes.
The yard is holding my finished yacht over a dispute about changes: what should I do?
First check what the contract says about ownership and retention: a yard that owns the yacht until acceptance is not retaining anything, it is simply not yet delivering; a yard that is no longer the owner exercises a right of retention for a claim it must prove. Pay the undisputed sums, deposit the disputed sums with a third party or the court, and apply in summary proceedings to the court of the place where the ship lies for delivery against that deposit. Unwritten changes are void under French law (Transport Code, article L. 5113-2), which deprives the yard of its claim where it worked on oral instructions.
On the same subject, the contract: yacht construction contract: ownership of the hull, refund guarantee and shipyard insolvency; foreign yards: building a yacht in the Netherlands, Germany or Italy; delivery: acceptance, sea trials and hidden defects in a new yacht.