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In the yachting industry, the term refit is often used broadly to describe works carried out on existing yachts.

Such a general definition, however, does not fully reflect the complexity of a refit project, which typically involves multiple stakeholders, technical works, subcontractors and operational constraints, often evolving during execution.

In Italy — a leading jurisdiction for yacht refit and aftersales services — refit projects represent one of the most dynamic segments of the maritime sector. At the same time, this operational complexity makes the yacht refit contract in Italy one of the areas where disputes most frequently arise.

In practice, disputes do not usually stem from exceptional events, but from recurring issues such as:

• works not properly defined in the contract;
• informally managed variations;
• delays without a structured contractual framework;
• unstructured delivery and acceptance procedures;
• imbalances in payment mechanisms.

The economic outcome of a refit is often determined by how these aspects are managed.

Legal framework of yacht refit contracts under Italian law.

From a legal perspective, a yacht refit contract is generally regarded as an atypical contract, which — in both practice and case law — is predominantly treated as a contract for works (appalto) under Articles 1655 et seq. of the Italian Civil Code.

A refit typically includes a wide range of activities, such as major maintenance, structural repairs, upgrades, modifications and compliance with technical and safety regulations.

These works usually have a significant impact on the yacht’s structure, performance and value.

This distinguishes refit contracts from other arrangements, such as storage or lay-up agreements, which primarily involve custodial obligations rather than performance obligations.

(For a detailed comparison, see our article on yacht storage agreements https://avvocatocapeceminutolo.it/en/yacht-storage-liability-damage-insurance/ )

While refit contracts are generally result-oriented, they may also include elements of obligations of means, particularly in relation to design, diagnostics and project coordination.

In practice, refit projects involve multiple parties, including:

• the owner;
• the shipyard;
• the owner’s representative or project manager;
• the captain;
• subcontractors and suppliers.

This multi-party structure often results in a fragmentation of responsibilities, with potential concurrent liability between the shipyard, subcontractors and, in certain cases, the owner.

This is precisely where careful contractual structuring becomes essential in order to prevent disputes.

In international practice, standard forms such as BIMCO Repaircon or the ICOMIA Refit Contract are frequently used, providing a more structured framework for variations, delays and liability allocation.

Key risks and most common sources of disputes in yacht refits.

In practical terms, most disputes in yacht refits can be grouped into four main categories:

a) Scope of work issues

• deviations from technical specifications;
• omitted works;
• defective execution.

b) Time-related issues

• delay in redelivery;
• mismanagement of extensions of time;
• failure to comply with notice provisions, with significant implications for burden of proof and allocation of responsibility.

c) Financial disputes

• cost overruns;
• disputes over extra works;
• mismanagement of variations.

d) Quality-related issues

• defects in workmanship;
• latent defects;
• failure to properly remedy deficiencies.

Variations and extra costs (change orders)

Variations — typically regulated through change order clauses — represent the most common source of dispute between owners and shipyards.

A recurring question is:

Why should I pay for works that were not expressly approved or originally agreed?

The answer depends on three key elements:

• who has authority to approve variations;
• how such approvals are formalised;
• when approval is given (before or after execution).

In more structured refits, the owner’s representative — often the captain or project manager — plays a central role in managing change orders.

Under principles generally applicable to contracts for works, variations usually require the owner’s consent, except where they are technically necessary.

Where the contract does not clearly regulate these aspects, operational decisions can easily become disputed.

This is one of the main sources of yacht refit disputes in Italy.

Delays, liquidated damages and timing disputes

Timing is inherently uncertain in refit projects due to the evolving nature of the works.

Many contracts include:

• liquidated damages for delay;
• caps on liability;
• provisions for permissible delays.

Disputes typically arise when:

• the owner seeks to enforce delay penalties;
• the shipyard claims entitlement to extensions of time;
• external factors are not clearly addressed in the contract.

Without a structured delay management system, the risk of disputes increases significantly.

Delivery, acceptance and minor deficiencies

The delivery phase is one of the most critical stages of a refit project.

It usually involves:

• sea trials;
• technical inspections;
• delivery protocols;
• management of minor deficiencies (punch list items).

A key risk arises where the distinction between “minor” and “major” defects is not clearly defined.

Without a structured acceptance procedure, it becomes significantly more difficult to raise claims for defects at a later stage.

Defects, warranty and evidentiary issues

In refit disputes, success often depends not only on technical arguments but on evidence.

Key aspects include:

• timely notification of defects;
• identification of the root cause;
• allocation of responsibility.

These issues must also be assessed in light of statutory time limits for notice and limitation periods applicable to contracts for works.

Early intervention is often decisive in preserving rights and limiting exposure.

Insurance considerations in yacht refit projects

Insurance is frequently underestimated in refit projects.

Relevant cover typically includes:

• Hull & Machinery;
• P&I (covering the owner’s liability towards third parties);
• Ship Repairer’s Liability (SRL).

Certain contractual provisions — such as limitation of liability clauses or waivers of subrogation — may affect the insurer’s right of recourse.

It is therefore essential to ensure proper alignment between contractual terms and insurance coverage.

The role of surveyors and legal advisors

Effective refit management requires coordination between technical and legal expertise.

Surveyors play a key role in monitoring works and documenting issues.

Legal advisors are essential in:

• structuring the contract;
• managing variations;
• addressing delays;
• preventing disputes.

A refit contract is not a neutral document: it is the primary tool through which risk is allocated.

How to avoid disputes in yacht refit contracts

Most disputes can be prevented through proper contractual structuring and disciplined project management.

Key elements include:

• a clearly defined scope of work;
• formalised change order procedures;
• milestone-based payment mechanisms;
• structured delay and extension provisions;
• formal delivery and acceptance procedures;
• coordination between legal and technical aspects.

Without these safeguards, even technically successful refits may result in disputes.

Conclusion and practical considerations

Experience shows that most issues in yacht refit projects do not arise from unforeseen events, but from a lack of structured contractual management, particularly at the outset and during execution.

A well-drafted contract and a disciplined approach to project management are often decisive in preventing disputes over cost, timing and liability.

If you are planning a yacht refit in Italy or are already dealing with a complex situation with a shipyard, a focused legal assessment can help clarify positions, reduce risk exposure and define the most effective strategy moving forward.

Early intervention often makes a significant difference in both preventing disputes and managing them effectively when they arise.

 

Studio Legale Capece Minutolo
Avv. Gianmarco Capece Minutolo

 

 

Sailing is a fascinating activity, but not without risks. In cases of emergency, mechanical failure or more serious incidents, several legal concepts of maritime law come into play: shipwreck discovery, assistance, salvage, and, more recently, towage and technical assistance in pleasure boating. Understanding the differences among these concepts is crucial not only to act correctly at sea, but also to avoid disputes and unexpected costs.

Shipwreck Discovery, Assistance and Salvage: First Distinctions

The three traditional institutions are governed by the Italian Code of Navigation (Royal Decree of 30 March 1942, No. 327, Articles 489–513) and the 1989 London Salvage Convention (implemented in Italy by Law No. 203/1995).

Wreck discovery (ritrovamento) refers to the fortuitous finding of a wreck, vessel or yacht at sea or stranded ashore, without the owner being aware of its position. Under Article 510 of the Code of Navigation, the finder must notify the nearest maritime authority within three days and deliver the wreck either to the known owner or to the authority. Upon compliance, the finder is entitled to reimbursement of expenses and a reward equal to 30% of the value of the asset found at sea, or about 20% if found on maritime public property (shoreline, beach, etc.).

Assistance (assistenza) is regulated together with salvage and recovery in Title IV – Book III of the Code of Navigation. Article 489 provides that assistance to a vessel or aircraft in danger of being lost, at sea or inland waters, is mandatory, provided it can be carried out without serious risk to the assisting ship, its crew or passengers. The duty lies with the master, unless aware that others are already providing adequate assistance.

Assistance differs from salvage because in assistance the distressed vessel is still capable of cooperating, maintaining some degree of manoeuvrability. Assistance entitles the salvor to: compensation for damages, reimbursement of expenses, and a reward, but only if the operation produces a useful (even partial) result (Art. 491). The reward is assessed considering the value of the assisted property, the degree of danger, the effort and risks undertaken, the time employed, and general expenses of the assisting enterprise.

The 1989 Salvage Convention modernised these rules by broadening the scope of ‘salvage operations’ to include acts to prevent or minimise environmental damage, even where the operation is unsuccessful. Article 14 introduced the concept of environmental salvage, partly derogating from the classic ‘no cure, no pay’ principle.

Salvage (salvataggio) is addressed by Articles 490 et seq. of the Code of Navigation. Unlike assistance, salvage occurs when the distressed vessel is no longer able to cooperate and the intervention of the salvor is decisive in preventing its loss. The law confirms the ‘no cure, no pay’ principle: compensation is due only if the salvage produces a useful or partially useful result. The award is determined according to the same criteria as assistance.

Towage and Technical Assistance in Pleasure Boating

With Legislative Decree No. 229/2017, Italy introduced a specific regulation on assistance and towage services for pleasure craft (Article 49-duodecies of the Code of Pleasure Boating).

This intervention aims to enhance safety at sea and prevent pollution, regulating minor activities compared to traditional maritime salvage.

“Minor assistance” in the context of pleasure boating is a technical, non-emergency service, such as:
– supply of fuel or batteries;
– engine restart;
– refloating in case of grounding;
– minor repairs at sea.

These services may also be provided by authorised private operators and mooring personnel, provided they hold professional liability insurance and have notified the competent Maritime Authority. Such services resemble a technical or craft service, giving rise only to the agreed fee, not to the reward mechanisms of the Code of Navigation.

Towage, under Article 49-duodecies, refers to the transfer of the vessel to the nearest suitable facility when the issue cannot be solved on site. This form of towage does not amount to salvage and differs from the technical towage regulated in the Code of Navigation, although in practice the boundary between these categories may sometimes blur.

Key Legal Implications

The distinctions among shipwreck discovery, assistance, salvage and towage directly affect the rights and duties of the parties involved, the economic consequences, and even criminal liability in cases of failure to render assistance.

This overview is not exhaustive but aims to provide initial guidance, useful both to yacht owners seeking protection and to operators called upon to intervene.

 

 

 

For specific advice, contract drafting, or dispute management in this area, contact us to discuss your case: we will analyse your situation and develop the most suitable strategy to protect your interests.

 

Studio Legale Capece Minutolo
Avv. Gianmarco Capece Minutolo

Every year, in the month of October, the famous Barcolana regatta takes place in the city of Trieste, attracting thousands of sailing boats to the Adriatic Sea and transforming the Gulf of Trieste into a natural theatre of sport and show.

The beauty and adrenaline of one of the most crowded regattas in the world offer an opportunity to address a highly relevant issue for those who regularly participate in sailing competitions: the legal framework governing civil liability in the event of collisions or damage between racing sailing boats.

The subject, both complex and fascinating, represents an intersection between yachting law, sporting regulations and general principles of civil liability.

The Italian Pleasure Navigation Code (Legislative Decree No. 171/2005) devotes particular attention to sporting events at sea, requiring, pursuant to Article 30, compliance with the regulations of the national and international sports federations organizing the event. The previous Law of 11 February 1971, No. 50 (“Rules on Pleasure Navigation”), which formerly regulated the subject, already provided that in sailing competitions the regulations of the Lega Navale Italiana, the Federazione Italiana Vela (FIV), the Federazione Italiana Motonautica and nautical clubs affiliated to the said federations had to be observed, thus recognizing the specificity of the subject and referring to the sporting rules of each individual discipline.

In the field of sailing competitions, in order to participate in a regatta, any boat should complete registration through specific forms binding each competitor to the observance of the Racing Rules of Sailing (R.R.S.) adopted by the Italian Sailing Federation (FIV), which gives effect to and applies the international Racing Rules of Sailing promulgated by World Sailing (formerly known as the International Sailing Federation – I.S.A.F.) headquartered in the United Kingdom (https://www.sailing.org). This is the international governing body for most sailing sports, particularly racing, which issues new editions of the Racing Rules of Sailing every Olympic quadrennium (the current version applies to 2025–2028).

These rules constitute a genuine “micro legal code” of sport, to which competitors adhere contractually through registration (thus entering into the so-called “race contract”). Consequently, they become the exclusive set of norms governing the relationships between competitors during the race and delineate, solely and exclusively, the scope of fault and liability in case of collision.

This means that, in the event of a collision between yachts engaged in a sailing race, the determination of liability must be carried out solely by applying and interpreting the aforementioned Racing Rules, excluding, as a general rule, the application of the provisions on liability for collision contained in Articles 482 et seq. of the Italian Navigation Code, the 1910 Brussels Collision Convention (upon which the Italian Navigation Code is based), and the International Regulations for Preventing Collisions at Sea (COLREG 72 – London Convention of 1972), which govern commercial or pleasure navigation but not competitive sailing events.

The fact that the Racing Rules govern the conduct of sailors during a regatta does not exclude the jurisdiction of the ordinary civil courts in favour of sports jurisdiction.
Indeed, should disputes arise between the competing yacht owners and/or their respective insurers concerning liability for a collision occurring during a regatta, jurisdiction over the ensuing litigation shall lie with the ordinary civil court.
Such court shall take into account the findings already established in the sporting venue regarding the responsibility for the collision (namely, the decision of the Protest Committee) or, in the absence thereof, shall interpret the facts in light of the Racing Rules of Sailing in force at the time of the incident.

Italian courts, when dealing with cases concerning collisions between yachts competing in regattas, have consistently held that:

“In such sporting events and related training sessions, if a collision occurs, the resulting liability must be determined, even by the judicial authority, on the basis of the Racing Rules of Sailing in force at that time.” (Chiavari District Court, 25 March 2004).

This principle was recently reaffirmed by the Trieste District Court in Judgment No. 454/2023, where the judge, called upon to assess liability in a collision occurring during the renowned Barcolana regatta, unequivocally held that:

“In the event of an accident between boats participating in a regatta, the general principles of civil liability set forth in Article 2054 of the Civil Code must be coordinated with the Racing Rules and the decisions issued by the Sports Jury. The general principle is that, in the case of a collision, the determination of the facts lies, for sporting purposes, with the race jury, while for compensation purposes it lies with the ordinary civil court, but it must nevertheless be carried out on the basis of the Racing Rules. In the present case, no protest was lodged; therefore, the sports committee did not rule on the dynamics of the collision, which the civil judge must reconstruct based on the evidence gathered.”

In accordance with the aforementioned R.R.S., when a breach of a racing rule occurs by a competitor, the opposing crew alleging such breach is required to lodge a formal “protest”, which shall be examined by the Protest Committee or Sports Jury. After due investigation and any hearings, the Committee shall issue a decision on whether a rule was infringed and, if so, impose the relevant penalties. Such decision shall constitute conclusive evidence in civil proceedings with regard to the circumstances and liability of the incident, and shall be binding upon the yacht found to be at fault and its insurers, whereas the assessment and quantification of damages shall remain within the exclusive jurisdiction of the civil court.

It should also be noted that, regarding the interpretation of the R.R.S., World Sailing, and in Italy the F.I.V., publish every four years the “Case Book”, which includes the full revision of all previously published cases and new ones adopted by the World Sailing Council, to illustrate as clearly as possible the application of the Racing Rules in the most controversial circumstances. Many of these cases are based on actual appeals submitted to national authorities pursuant to Rule 70.1 or requests for confirmation or correction submitted under Rule 70.2. Others, presented in a “question and answer” format, are based on hypothetical or presumed situations and often arise from queries submitted to the World Sailing Question and Answer Panel. This resource is undoubtedly valuable for judges, arbitrators, and race officials—both national and international—in determining rule infringements and in defending crews involved in formal protests. Moreover, as previously noted, it may also serve as a valuable reference for judges and court-appointed experts when called upon to determine liability for a collision in the absence of any sporting adjudication, by applying the relevant Racing Rules of Sailing.

This brief and certainly non-exhaustive analysis highlights how sailing regattas provide an extraordinary context for reflecting on the delicate balance between sporting competition and legal liability, where the interpreter must always reconcile the autonomy of the sporting legal order with the principles of civil law and maritime law, taking into account the inherent risks accepted in competitive sailing.

 

If you have suffered damage to your yacht or personal injury during a sailing regatta or wish to better protect yourself in the event of a maritime incident or when registering for a sailing competition, please contact the Firm to discuss your case.

 

Studio Legale Capece Minutolo
Avv. Gianmarco Capece Minutolo