With the summer superyacht charter season in full swing, thousands of yachts are being delivered to charterers for luxury experiences across the iconic ports of the Eastern and Western Mediterranean. While most charters do run smoothly, complaints and issues can arise, some of which result in legal disputes. Common areas of legal dispute include cancellations and non-payment, the condition of the yacht, crew and service standards, and on-board behaviour.

The majority of superyacht charters are governed by English law and are concluded on the Worldwide Yachting Association (MYBA) standard terms and conditions. These standard terms and conditions are available exclusively to MYBA members for the benefit of their clients. Any negotiated changes, such as bespoke terms requested by the Owner or Charterer, are incorporated under the Special Conditions.

Until recently, MYBA’s standard terms and conditions for charter had been unchanged since 2017. However, in April 2025 the MYBA released a revised version of the charter agreement: the 2025 terms. This summer, both the 2017 and 2025 terms are in circulation. MYBA has said that from 1 September 2025 the 2017 terms will no longer be available to brokers.

Shifting tides in superyacht law
Most of the changes that have been introduced are minor and their intention is primarily to improve the previous drafting of the contract terms. There are, however, some clear improvements and some notable additions.

For example, there is now: i) an Entire Agreement clause that excludes prior broker communications from forming part of the contract; ii) an appropriate recognition of sexual harassment on board as a zero-tolerance incident, giving rise to the Owner’s immediate right to terminate; iii) an improved notice requirement to the Charterer if the yacht scheduled to charter is in fact to be sold; iv) an additional right for the Charterer to exercise in the event of alleged force majeure cancellation.

Two significant additions are the new clauses relating to know-your-customer (KYC) obligations and sanctions.

The KYC clause and the introduction of the mutual exchange of required documentation is intended to reflect the need for both the Charterer and Owner to have sufficient information about the other party so that both can properly and effectively enter into the charter contract without risking a breach of anti-money laundering (AML) or sanctions regulations. Since the Stakeholder holds the Charter Fee on behalf of both parties and may ultimately transfer the funds for the benefit of either, it follows that the Stakeholder must hold full KYC documentation on both parties.

Insofar as sanctions are concerned, brokers are familiar with the concept of a “designated party” (a person, company or yacht), that is entities individually named and appearing on official sanctions lists published by the UN, EU, UK, US and others. Furthermore, brokers are clear on the legal prohibition against dealing with such entities under strict liability sanctions regulations. It is clearly illegal for a designated party to pay to charter a yacht. Brokers should also ensure, as reflected in the MYBA 2025 terms, that none of the Charterer’s guests are designated persons. Brokers should be aware of the risk of the “straw man” principal Charterer entering into agreement for the ultimate benefit of a designated party as guest.  

The Sanctions Clause requires Owner and Charterer to warrant that neither they nor any of the Charterer’s guests are a “Sanctioned Party” as defined within the 2025 terms. Brokers need to pay very careful attention to the fact that the 2025 terms’ definition of a “Sanctioned Party” is broader than the question of whether or not the person is a “designated party”, that is someone named on the official sanctions lists.

What does this mean for brokers?
With two versions currently in circulation, retail brokers need to be aware of which agreement is being used by the Owner and how that version might affect the Charterer and the brokers’ own obligations and potential liability. 

The launch of the new 2025 terms marks the end of full reliance on the 2017 terms. It is essential to brief clients on the changes to ensure they do not enter into new contracts under the mistaken belief that the old terms still apply.

The new terms should also prompt brokers to read the terms and ask questions. Are they clear about the terms and the implications? Do the terms as drafted fully meet their clients’ needs or should bespoke additions or variations be introduced? 

Given the increased regulatory scrutiny on the superyacht sector, particularly surrounding AML compliance and international sanctions regimes, the KYC and Sanctions clauses should be carefully reviewed by brokers.

What to expect next
MYBA is welcoming feedback from its members and has stated that it can and will make further changes. On 2 July, an email circulated to members announced three additional drafting amendments.

MYBA now faces the challenge of balancing responsiveness to member feedback with the need to maintain sufficiently consistent and standard terms that members can rely on with confidence.

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