Understanding the Turkish maritime code

TURKISH maritime law and practice can be grouped under two categories: documentary resources, and legal practice created by maritime trade.

The fourth book of the Turkish Commercial Code (TTK) is dedicated to maritime law, and includes the following topics:

  • To fly and use the Turkish flag

    This section explains which vessels are entitled to fly the Turkish flag, and the requirements attaching to those entitlements, including the terms and conditions required of an owner, and incorporation of companies and share majorities. The rights to fly the flag are dealt with in individual provisions. Also covered are the requirements on vessels flying foreign flags to use the Turkish flag on a temporary basis, particularly important for bareboat charters.

  • Property and real rights on vessels

    Procedures for the sale of a vessel registered with the registry are not subject to any conditions in the TTK. However, sales of vessel shares are only permissible if the vessel is registered with the ship registry. This section further sets out the details of vessel mortgages.

  • Owners' liabilities

    By definition, the owner is a party which operates for profit in maritime trade the vessel which it owns. In addition, there is another definition covering the vessel operator, which employs a vessel which it doesn't own. This party is, in practice, the charterer in a demise charter party. For liability issues, the charterer is in the same position against third parties as is the owner.

In Turkish maritime law, the concepts of 'owner' and 'carrier' differ from each other. If the owner undertakes to carry, and the bill of lading is issued in the name of the owner, this party will be the carrier. If the bill of lading is issued in the name of the charterer, the carrier will be the charterer.

There is real-right limitation to the liability of the owner. Accordingly, liability of the owner under Section 947 is limited to marine wealth.

Claimants have recourse only to the owner's marine wealth when seeking to recover any loss, but are entitled to a lien on the vessel. Marine wealth includes both the vessel and the freight for the voyage giving rise to the claim. The claimant is barred from having recourse to legal action for recovery against other vessels owned by the same owner.

Since Turkey has recently ratified the 1976 London Convention, this system is expected to be replaced, and the convention regulations incorporated in the TTK.

Carrier's liabilities due to loss or damage to the load
Carrier's responsibilities under the TTK are grouped under two headings:

  • Responsibility arising from any loss or damage to cargo because of lack of diligence
  • Any responsibility stemming from losses resulting from unseaworthiness at the beginning of the voyage

Losses resulting from other causes, and particularly damages for delay (economic damages) and losses caused by complete or partial non-performance of the contract of carriage, are subject to the general provisions of the Code of Obligations.

The liability of the carrier arising from any loss or damage to cargo is governed under compulsory provisions in parallel with the Hague Rules. There is only one difference. The first two provisions of Article IV.2 of the Hague Rules are covered by Section 1062 of the TTK under the heading of "absolute non-liability", whereas the remaining paragraphs except (q) are governed under Section 1063 of the TTK under "potential cases of non-liability".
According to the principle of absolute non-liability, the existence of cases specified therein completely relieves the carrier from liability. However, unlike the Hague Rules, according to Section 1063, cargo interests are able to hold the carrier liable if they can prove that the reason for the loss or damage to the goods was the unseaworthiness of the vessel, or that the carrier had breached its duty to act diligently. Due to the fact that the sum limiting the liability per package or unit, as set out in the TTK, has turned out to be extremely low because of the high inflation rates prevailing in Turkey, the country's supreme court has allowed the extent of the carrier's liability to be fixed in accordance with the amount of the cargo invoice.

Charter parties

None of the provisions set out in the TTK regulating charter parties are compulsory. Nevertheless, the TTK does seek to regulate voyage charters.

A system composed of three different stages (loading, voyage, and discharging) is set forth:

  • Loading. There is a rule similar to FAS (free alongside vessel) for determining the limit for expenses and liabilities of the parties. Notice of readiness, laytime and demurrage are set forth in detail.
  • Voyage. Provisions here cover deviation and, as with other legal systems, there is a differentiation between justified and unjustified deviation.
  • Discharging. Discharge is regulated in parallel with the provisions for loading. In addition, certain special provisions have been included, one of which covers cargo not accepted by the consignee at the discharging port. In such cases, the carrier is required to deliver the cargo to a general bonded house after a period of time has elapsed which is equal to the total period of time allocated for laytime and demurrage. If the period of demurrage has not been fixed, the former is calculated by taking half the laytime into account.
    It should be noted that the TTK does not govern any other types of charter party, and particularly not time charters.

Owners' rights

This chapter covers freight, including deadfreight and distance freight.

  • Deadfreight: If the charterer cancels the charter party prior to the start of a voyage, it is obliged to pay half the freight. After the start of the voyage, it is obliged to pay full freight.
  • Distance freight: If the vessel turns out to be incapable of completing the voyage due to an unexpected event, the charterer should pay freight in proportion to the distance covered, provided the cargo has been secured.

Sea accidents

The TTK regulates general average, collision and salvage cases. But there are some differences between its general average provisions and the York-Antwerp Rules.

Salvage regulations in the TTK, meanwhile, are in compliance with international legislation. It should be noted, however, that Coastal Safety and Vessel Salvage Management, a state-controlled entity, enjoys full monopoly rights in almost all Turkish ports, straits and waters.

Collision regulations in the TTK run parallel to international regulations and are dealt with under various headings.

Vessel liens

Debts listed in Section 1235 of the TTK allow claimants to recover sums by selling vessels at auction. Liens are conditional on the existence of principal debts and claims, and confer rights over those of other claimants. This system is also valid for mortgagees. Another characteristic of liens is that they may be claimed against subsequent owners of the vessel.

Debts allowing a right of lien on the vessel, as listed in Section 1235 of the TTK, are as follows:

  • If the vessel is sold through compulsory performance, safeguarding and protecting expenses for the vessel and its appurtenances.
  • Vessel's voyage and port dues.
  • Wages of seamen.
  • Pilotage expenses, as well as salvage fees and expenses.
  • General average contributions.
  • Debts arising from other transactions executed by the master.
  • Even if the carrier is not necessarily the owner, debts arising from any damage to or non-delivery of cargo.
  • Claims not included in the foregoing paragraphs and arising from non-performance or insufficient performance of any contract entered into by the master.
  • Claims arising from negligence of any seamen.
  • Social security premiums.

The term "lien" as used here differs from its use in English law, where it provides a special right allowing the claimant to sell the vessel at auction through enforcement via a special procedure, in addition to the right to prevent the vessel from sailing.

Lien on cargo

Under Turkish law, the carrier has a lien on the cargo for freight debts, including demurrage, dead and distance freight, which survives and remains valid for thirty days from the date of delivery, provided the cargo is still in the possession of the consignee. This right is also valid for the contribution falling on cargo for general average.

Legal practice

Parties may incorporate clauses into their contracts which are contradictory to the provisions in the TTK. Certain standard-type charter parties are typically used in practice, mostly incorporating English law. There are significant differences between the legal systems.

Under Turkish law, for example, the period of demurrage is among the rights granted by the owner to the charterer, as is the case with laytime. The fact that loading/discharging operations are not completed within allowed laytime is not considered a breach of the charter, and the charterer has the right to continue its activities under its rights arising from the charter party. However, in return, the charterer pays demurrage to the owner.

As a characteristic of Turkish Law, laytime is counted under the "working days" principle, as opposed to on a "running days" basis. Therefore it is necessary to incorporate SHEX in a charter party under English law in order to make a calculation on a working days basis. In order to calculate laytime on a "running days" basis, a SHIC clause should be incorporated into any charter party subject to Turkish law.

Arbitration clauses

There is a broad interpretation of the validity of foreign arbitration clauses for bill of lading holders under Turkish law, although there has been a recent tendency towards a narrower interpretation, in strict compliance with the relevant law to which the parties are subject.

Jurisdiction clauses

In 1998, the Supreme Court agreed that parties may authorise a court in a foreign jurisdiction, except in cases involving public order and exclusive power.