A buyer who failed to pay an instalment for a 60m (197ft) superyacht now owes the builder €7.6m (nearly US$10m).
That was the ruling of a British High Court earlier this month, in a case that Azimut-Benetti brought against Darrell Healey, the chairman of GSE Group, a UK construction firm.
According to reports, Healey (through his company Shoreacres Ltd) signed a contract in September 2008 commissioning the yacht. The contract stipulated a purchase price of €38m (US$50m) with instalment payments due at specific dates.
Healey gave a personal guarantee for the funds. In addition, the contract included a clause indicating that Azimut-Benetti had the right to terminate the agreement if any payments were missed and the money still had not been delivered within 45 days of it being due.
The builder could then retain any payments made and/or recover further funds that would together total 20 per cent of the sum purchase. The percentage represented “liquidated damages as compensation for its estimated losses (including agreed loss of profit),” according to the contract, as quoted by one published report.
While Healey apparently did not deny failing to pay the first instalment, his legal team argued that the 20 per cent stipulation exceeded Azimut-Benetti’s real loses. Instead, they further argued, it was a penalty clause and should be considered unenforceable.
The High Court judge disagreed, stating it was “commercially justifiable as providing a balance between the parties.” He added that because both sides committed freely to the contract, “In a commercial contract of this kind, what the parties have agreed should normally be upheld.”
As a result, Healey was ordered to pay Azimut-Benetti €7.1m (US$9.26m) in addition to forfeiting his €500,000 (US$652,000) deposit.
Healey plans to appeal the decision.