Reports

  
Unless provided otherwise, according to Spanish law any significant defects in yacht reparations discovered within a year from their completion, must be rectified by the shipyard.

Maritime Navigation Law (MNL) 14/2014 came into effect in September 2014. This law collects all the dispositions regarding maritime navigation, maritime vehicles and the contracts that regard them, in one single act. This is the first time a specific law regulates naval constructions and repairs. Considering the large number of Spanish business dedicated to repairing large yachts, we think this law plays an essential part in establishing the parties’ obligations in contracts involving naval repairs and constructions. In this article, we look at faulty repairs that are covered by warranty according to MNL, i.e. the obligations of the shipyard or repairer in the event of any defects in the work they have carried out. We also look at the warranties available for those repair jobs not covered by the Maritime Navigation Law.

The MNL provisions we refer to, which provide guarantees in relation to significant construction and repair work, apply to jobs carried out on Spanish territory and are default rules, meaning that they can be overridden by a contract that may provide different warranties or simply invalidates them. This means that when stipulating a construction or repair contract, the parties can agree the warranties they deem appropriate, but if they don’t make any provisions, MNL will apply. However, MNL applies automatically in the event of malicious intent or gross negligence on the part of the constructor or repairer. Malicious intent refers to the cases in which constructors or repairers act with intention; gross negligence when they omit to apply the basic precautions necessary to complete the work successfully.

Repair warranties

The Maritime Navigation Law establishes that construction defects that are not immediately obvious or that could not have been identified during the construction or at the time of delivery, must be rectified by the shipyard if reported within a year from the completion of the work. Pursuant of MNL, this warranty also applies to “significant” repairs. Unfortunately, the lack of a precise definition means that it will be down to the client to determine whether it is a “significant repair” and claim the rectification established by the warranty. We would expect the significance of a repair to be assessed based on both technical and economic criteria.

To define the concept of “significant repair” based on technical criteria, reference should be made to Royal Decree No. 1837/2000, of 10 October, which approved the regulation on vessel inspection and certification, and defines transformation, refurbish and substantial reparation as:

1) Any modifications to a vessel that have or may have a significant impact on maritime safety or the prevention of maritime environment pollution.
2) Any repairs to a vessel or one of its parts that have or may have a significant impact on its safety or the prevention of maritime environment pollution.
3) Work that alters the size or the main characteristics of the vessel, such as the length, beam, height, tonnage, the duration of service, the structure or stability of the vessel, causes a change of class or affects the characteristics of the main machine.

As for the economic criteria, we could consider, for example, painting. This type of work is one of the essential aspects of a yacht’s maintenance, therefore we think that even if strictly speaking it is not a “repair”, it is a service that should be covered by the warranty we are considering here.

Finally, we can conclude that unless otherwise provided, the Spanish law says that significant repairs carry one year warranty, the normal warranty period for naval constructions applied internationally.

Repairs not covered by MNL

As for the repairs not covered by MNL, as not considered significant, there is no explicit regulation that specifies what kind of warranty repairers should apply to their work. However, taking into account the significant differences, by analogy we can refer to Royal Decree 1457/1986, of 10 January, which regulates the industrial activity and the provision of services in the motor vehicle repair shops, its equipment and components. The Decree establishes that the repairer must offer a 3-month or 2000 km warranty for their work, reduced to 15 days or 2000 km in the case of industrial vehicles. The 3-month period can be applied to repairs on private yachts, and reduced a 15-day period to commercial vessels.

On the other hand, when yacht owners can be considered consumers, the legislation that protects consumers and users applies: Royal Legislative Decree No. 1/2007, of 16 November, which approved the General Law for the Protection of Consumers and Users and other complementary regulations. For the purposes of this law, consumers and users are natural persons who act for purposes not related to their business, and juridical persons who act for not-profit purposes not related to their business. Therefore, the owner of a private yacht, whether a natural person or an entity, can be considered a consumer and take advantage of the protection of the above mentioned law.

This mandatory rule, which will be enforced even if the parties attempt to override or modify it, sets a 2-year warranty for new parts and their installation. Meaning that, when new parts are installed as part of a repair, both the parts and the installation work are guaranteed for 2 years. In this case, however, once an issue is detected, if the replaced part is not an independent element, it may be difficult to determine whether it is due to bad installation or, whether it is due to other mechanisms not included in the repair.
How to proceed in the cases of faulty repair

If a fault regarding a significant repair is detected, you should inform the repairer and ask for instructions on how to proceed before intervening on the issue. If you get no answer or a provisional repair cannot be delayed, an independent expert should prepare a report indicating the cause of the problem and the technical solution, before any work is carried out on the boat. Should the repairer refuse to cover the cost of rectifying the fault and you decide to take legal action, you should remember that the claims must be made within three years from the reparation
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This article is merely informative, therefore the author is not responsible for the consequences of its use applied to real cases.

Yamandú Rodríguez Caorsí
Nauta Legal Abogados
www.nauticalegal.com