Paying a Turkish refit yard, milestone by milestone

The number is agreed at signature. What follows is a schedule of transfers, and yacht refit payment terms decide one thing: whether the money moves on evidence or on the calendar.

The schedule is where a refit goes wrong, because it is the only part of the contract both parties operate every month. A figure is read once. A schedule is read a dozen times, and every reading has to survive a programme that has moved. When the wording will not carry that, a berth is occupied, a transfer falls due on the date in the contract, and both sides read the same clause differently.

A payment schedule is a schedule of proofs, not of dates

Every milestone must name a physical condition that someone who was not in the shed that week can verify from a document.

A schedule keyed to calendar dates pays for time elapsed. A schedule keyed to defined states pays for work done, and only the second behaves when the programme moves. A date schedule looks harmless at signature and becomes an argument the first time a long-lead item lands late, because the yard is then invoicing for a month in which the berth was occupied and no work was possible. Nobody is at fault. The money is still due on the contract date.

This is a contract question, not a pricing one. The composition of the figure, what the number is actually made of, is settled before award and solves none of it.

What each milestone has to be able to show

Attach a nameable artefact to each stage and the schedule stops being a negotiation.

Survey closed produces a written condition report and an approved scope. Strip-out complete produces photographs of the opened structure, taken before anything is cleaned up. Structure signed off produces the weld and NDT records against the agreed plan. A coating stage is reached when the substrate and climate records show the conditions at application, not when a date arrives. Systems set to work produces a commissioning sheet, and redelivery produces trials and the handover file.

The artefact is the milestone, and the percentage is a poor summary of it. A line worded "engine room 60% complete" cannot be paid or refused with confidence, because there is no test for it and two honest people read the same compartment differently. "Tanks blasted, inspected and primed, with the inspection record issued" can be paid on a Friday without a conversation. The same discipline goes into a scope three yards can price the same way: wording that cannot be measured will be argued.

Customs and fiscal position settle before the first transfer, not after

A foreign-flagged yacht enters under a temporary importation regime, and equipment bought into the project clears on a separate track from her own entry. That is the entry regime and the agent who runs it, settled before she sails.

What it means for the schedule is narrower. A milestone that depends on a part still in bonded storage, or standing uncleared at a gate, cannot be certified, because what it proves has not happened. The contract should say whose account that standstill falls to, and whether it suspends the one milestone or the whole schedule. Suspending a schedule over one crate is how a programme loses a month.

Which regime applies to a given vessel, and what her fiscal position is, are not ours to publish. They belong with her agent and the owner's own adviser.

Which lines move with the lira, and which never do

Labour here is incurred in lira. Imported equipment is bought in hard currency. That split is settled. Who carries the movement between them is not.

A contract denominated wholly in one of the two quietly asks one party to carry that movement between signature and invoice, across a programme that may run the better part of a year. The rule changes at award: bidders should price in one currency so three tenders compare line for line, which is a comparison device rather than a contract term.

After award there are two honest instruments. Denominate each line where the cost is incurred, so the exposure sits with whoever already has it. Or name a single contract currency and state the conversion basis and the date the rate is struck. What does not work is the informal version, where a yard is asked to quote a lira cost in euro and prices the exposure into the figure. The owner pays either way. The difference is whether the line is visible.

Security runs both ways, and evidence is what releases it

Two instruments are ordinary industry practice: an advance payment guarantee standing behind the first transfer, and a retention held against the warranty period and released on a stated event rather than on a mood.

Most owners stop there. The reciprocal obligation belongs in the payment clause, not only in the governance schedule, because a milestone that cannot be certified for want of an answer is a transfer the yard is financing. Who is allowed to decide, and how long they have, is the governance a refit runs on. Payment security is a separate instrument from who carries the risk in the yard.

A retention needs a release event that can be dated, usually the end of the twelve months after redelivery. Most payment disputes are evidence disputes, and the commercial language arrives afterwards.

Ours is method rather than payment terms, and ordinary enough to list. Stage One ends with a written condition report, a scope you have approved and a price that does not move, which is what a first milestone is written against. Assessment to redelivery runs under a single project manager, with a photograph-backed report every week, so the evidence a transfer needs already exists by Friday. Sourcing, customs, freight and bonded storage are handled here, which is where the standstill above is decided.

Governing law, the language of record, and the clause nobody reads until it matters

Three lines get negotiated last and read first: which law governs, where a dispute is heard, and which language is the language of record.

The third is the operational one. Drawings, minutes and variation orders on a Turkish programme will not all be in the same language, and a translated variation order signed in month three is what a tribunal reads in month eighteen. Agree before signature that one document set is the master and the rest are courtesy copies, then hold to it in the busy weeks, which is when the habit breaks.

None of this is a legal opinion, and it is not ours to give. It belongs with the owner's own advisers, engaged before signature.

Written at the yard in Tuzla. The instruments described here are general practice in the trade, and what any particular contract says is between the owner, her advisers and the yard that signs it.