Non-Legal Fine Points of Yacht New-Build and Refit Contracts - VII

I am personally not a big fan of arbitration in respect of the main body of a new-build or major-refit agreement...

However, getting an emergent work or change-order related dispute before an arbitrator can usually be accomplished much more quickly than getting the disagreement litigated in court. Consequently, when it comes mid-job disagreements concerning such emergent or change-order work, there are some very real advantages to arbitration.

Understand that this is not intended to be legal advice. But that said, in my experience, in order to avoid destructive delays to a project in-process, consideration should be given to incorporating a special provision into any arbitration clause relating to emergent work and change-orders. This provision should establish that, in the event of a dispute requiring arbitration, the shipyard's work will proceed under "protest",  according to the originally agreed specification and schedule, subject retroactively to any pricing or schedule modification ultimately awarded by an arbitrator.

This removes schedule and cash flow based leverage on both sides of any potential dispute. It also, again in my experience, in and by itself encourages all parties to achieve negotiated resolution to any in-process disputes involving emergent work or change-orders.

The next installment of this series will touch on milestones and payments. — Phil Friedman

Author's Notes:  The information, opinions, tips and comments here are based on my 30 some years in the yachting industry, including my several year stint as president and CEO of a major, world-class megayacht builder.

If you find yachts and yacht building of interest, you may want to read some of my other marine industry related articles:

"Sizing Generators to Run Greener and Cleaner"

"App or Not, Garbage In Means Garbage Out"

"Financial Protections for New-Build Yacht Buyers"

And if you'd  like to receive further installments of this ongoing series, or regular noticiations of my other writings on a regular basis, click the [FOLLOW] button on my beBee profile.  As a writer-friend of mine says, you can always change your mind later.

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About me, Phil Friedman:  With 30 some years background in the marine industry, I've worn numerous hats — as a yacht designer, boat builder, marine operations and business manager, marine industry consultant, marine marketing and communications specialist, yachting magazine writer and editor, yacht surveyor, and marine industry educator. I am also trained and experienced in interest-based negotiation and mediation, and am currently supervising, as owner's representative, a new yacht build in Taiwan. In a previous life, I taught logic and philosophy at university.

The (optional-to-read) pitch: As a professional writer, editor, university educator, and speaker, with more than 1,000 print and digital publications, I've recently launched an online program for enhancing your expository writing: learn2engage — With Confidence. My mission is to help writers and would-be writers improve the clarity of their thought and writing, master the logic of discussion, and deal with criticism and disagreement.

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Text Copyright © 2016 by Phil Friedman — All Rights Reserved
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