Changes to our very own Magna Carta
The MYBA Charter Agreement - the most comprehensive doducment of its kind - has undergone a number of revisions for 2014. This comes following some criticism at a recent industry event that it had failed to respond to evolve at an appropriate rate with changes to the European fiscal landscape.…
A series of revisions to the MYBA Charter Agreement have been finalised, with the 2014 edition of the de facto charter contract expected to come into force w/c 10 March.
The contract’s authors say one of the most significant alterations from the previous version, dated 2009, is greater clarity on instances of arbitration. The process of appointing arbitrators has been simplified and arbitration itself shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) terms, applicable at the time when the Arbitration takes place. LMAA individual structures for handling claims of both small (up to 50,000 Euros or currency equivalent) and intermediate nature (up to 400,000 Euros or currency equivalent) will suffice for the vast majority of instances.
However, at the recent Italian Superyacht Forum it was claimed by a number of European fiscal experts that MYBA had abjectly failed in its obligation to bring its charter agreement into line with the changing EU tax landscape.
In-line with this evolution, a perhaps more significant revision to the 2014 document, is the creation of an option either to include VAT as chargeable or not, based upon charter location. The contract also now includes a definition of ‘VAT’, and the plan is to incorporate it into the full body of the contract when its efficacy has been fully tested.
“We have tried to make it as easy as possible for all parties to [enter into an agreement] with some sort of comfort level”, she explained. “It’s difficult to bring the agreement up to speed when fiscal experts are in disagreement!”
Dawson said the fiscal revisions have been more conservative than some committee members had hoped because it was impossible to incorporate an all encompassing document for the global charter market that would protect the signatories under the law of any one jurisdiction.
“Owners have to rely on their own advisors and accounting departments because I can’t tell them what is going to work for them”, Dawson said. “Whether it be MYBA or LYBrA, they invest a lot in getting the best possible information possible, but from that point owners need to work with their own guys because the contract has their name on it. They wouldn’t ignore [due diligence] in their business transactions, and they shouldn’t do so for charters. And that goes for charter brokers too, who shouldn’t take things as gospel when they’re advising their clients.”
The contract’s authors say one of the most significant alterations from the previous version, dated 2009, is greater clarity on instances of arbitration. The process of appointing arbitrators has been simplified and arbitration itself shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) terms, applicable at the time when the Arbitration takes place. LMAA individual structures for handling claims of both small (up to 50,000 Euros or currency equivalent) and intermediate nature (up to 400,000 Euros or currency equivalent) will suffice for the vast majority of instances.
However, at the recent Italian Superyacht Forum it was claimed by a number of European fiscal experts that MYBA had abjectly failed in its obligation to bring its charter agreement into line with the changing EU tax landscape.
In-line with this evolution, a perhaps more significant revision to the 2014 document, is the creation of an option either to include VAT as chargeable or not, based upon charter location. The contract also now includes a definition of ‘VAT’, and the plan is to incorporate it into the full body of the contract when its efficacy has been fully tested.
The were a number of MYBA Charter Agreement detractors at the Italian Superyacht Forum in February 2014.
Speaking exclusively to SuperyachtNews.com the MYBA Charter Committee’s chairwoman, Barbara Dawson said that she thought the opt-in/opt-out option, made available through the new e-contract system, was a versatile solution to a multi-faceted problem. “We have tried to make it as easy as possible for all parties to [enter into an agreement] with some sort of comfort level”, she explained. “It’s difficult to bring the agreement up to speed when fiscal experts are in disagreement!”
Dawson said the fiscal revisions have been more conservative than some committee members had hoped because it was impossible to incorporate an all encompassing document for the global charter market that would protect the signatories under the law of any one jurisdiction.
“Owners have to rely on their own advisors and accounting departments because I can’t tell them what is going to work for them”, Dawson said. “Whether it be MYBA or LYBrA, they invest a lot in getting the best possible information possible, but from that point owners need to work with their own guys because the contract has their name on it. They wouldn’t ignore [due diligence] in their business transactions, and they shouldn’t do so for charters. And that goes for charter brokers too, who shouldn’t take things as gospel when they’re advising their clients.”
Profile links
MYBA (Mediterranean Yacht Brokers Association)
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