Turkish Regime For Carriers’ Liability Because Loss Of Or Damage To Cargo

Turkish Commercial Code (“TCC”) regulates carrier's liability under two categories; loss or damage to cargo due to lack of care or negligence; and loss or damage resulting from unseaworthiness of the vessel. In our previous Eurasian issue, the first kind of liability of the carrier was discussed. In this study, the liability of the carrier arising from the unseaworthiness of the vessel and the right of the carrier to limit his liability for loss or damage to the goods both caused by the unseaworthiness of the vessel or his lack of care or negligence will be evaluated.

In accordance to the article 1141 of TCC, the carrier is compelled to provide a seaworthy, voyageworthy and cargoworthy vessel. According to this, the carrier is liable for the losses and damages arising from the unseaworthiness of the vessel. The only exception to this liability is that the carrier does not have the opportunity to discover this deficiency/unseaworthiness until the beginning of the voyage, despite the carrier’s care and attention that a prudent carrier is obliged to spend. Since this article is a mandatory provision, it is not possible for the parties to eliminate or reduce the liability of the carrier arising from this article. As it will be understood from the article, the carrier shall be bound before the beginning of the voyage to exercise due diligence to make the ship seaworthy.

Article 932 of TTC defines the terms of seaworthy, voyage-worthy and cargo-worthy vessel. According to it;

“Seaworthy ship” is a ship that can withstand the dangers arising from the water (except for completely abnormal hazards) in terms of her main parts such as her hull, general structure, machinery, boilers and general equipment.

“Voyageworthy ship” is a ship capable of withstanding the dangers of her voyage in terms of her equipment, loading condition, fuel, stores, and the number and adequacy of seafarers (except for completely abnormal hazards).

In order for the ship to be considered as “cargoworthy” her parts used for the trans-portation of goods, including the cooling system, must be suitable for the acceptance, storage and transportation of the goods.

As might be expected, what the law means by completely abnormal hazards is actually force majeure.

As mentioned in our previous Eurasian issue, the carrier will not be liable for loss or damage to the goods in case the damage or loss occurs due to the fault of the vessel’s navigation or technical management or fire (unless the damage is caused by the carrier’s own fault).

If the loss or damage is not caused by one of the above-mentioned reasons and the carrier is liable for the loss or damage, then he will be able to benefit from the right to limit his liability. Under Turkish Law, the carrier has right to limit his liability for loss or damage to the goods caused by the unseaworthiness of the vessel or his lack of care or negligence.

Similarly with the Hague Visby Rules, The TCC states in its article of 1186 that unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding 666.67 SDR per package or unit or 2 SDR per kilogram of gross weight of the goods lost or damaged, whichever is the higher.

Accordingly, the carrier’s liability due to loss or damage to the goods is limited under Turkish Law in line with the provisions of the Hague-Visby Rules. However, as in the Hague-Visby Rules, article 1187 of TCC stipulates that the carrier shall not be entitled to benefit of the limitation of liability if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that damage would probably result. The burden of proof is on the party (cargo interests) seeking to break the limitation.

In any case, the liability of the carrier arising from the loss or damage to goods will end one year after the delivery of the goods (or after the date on which the goods should have been delivered, if the goods are not delivered).

Who Is Liable For Pollution In Bareboatcharters?

Bareboat Charter Contracts are of great importance in terms of the existence and continuity of commercial life. In respect of these contracts, the use of the ship is transferred to the Charterer (“Ship Management Contractor”) for a certain period of time with the determined lease price, without undertaking the financial burdens and risks of owning a ship. This means that even if you are not the owner of the ship, you have the possession of the ship for a specified period and you take an active part in the commercial life by operating the ship. Well, who is responsible for the environmental pollution and damages caused by the chartered ships, and how is the liability basis determined in Turkish Law?

Of course, the fact that sea transportation is the most preferred way of transportation in today's commercial life it has several consequences. One of these consequences is the environmental pollution that occurs due to the use of the ship or due to extraordinary circumstances such as accidents. Well, in the charter agreements will the Owner of the ship, the Charterer, or the Master be held responsible for the mixing of the fuel and oil of ship into the sea and/or the removal of the sunken passenger engine and its towing to the appropriate place? The first thing we need to examine here is the bareboat charter agreements. In the TCC, the definition of bareboat charter agreements is made as "a contract in which the lessor undertakes to leave the use of the ship for a certain period of time to the Charterer in return for the rental fee". These contracts can only be made with the "Bareboat Charter", which envisages the transfer of the ownership of the ship to the Charterer, or with the "Charter by Demise", which envisages the transfer of the service contracts of the crew, and the nature of the contract does not change in either case. Although "Charter by Demise" is structurally similar to "Time Charter" due to the transfer of the ship's crew, the transfer of ship ownership to the Charterer clearly reveals the difference between "Demise Charter" and "Time Charter". The Charterer, who takes over the possession with the bareboat charter contract, has the right to operate the ship on his own name and account. In other words, with the agreement of a bareboat charter contract, the title of ship management, control and even the ownership passes from the ship Owner to the Charterer, and the Charterer becomes responsible for the damages caused by the ship as the Owner.

Within the framework of the Environmental Law No. 2872, it is seen that the natural or legal person who directly or indirectly causes environmental pollution with his activities is held responsible without any fault requirement. In other words, in the Turkish Commercial Code (TCC), the Owner and the Master of the ship are held responsible even if they are personally not at fault in terms of environmental pollution caused by the ship, even if there is requirement of fault to claim liability against the Owner and the Master. The Supreme Court Jurisprudence on this issue is as follows;

“… Pursuant to Articles 2 and 28 of the Environmental Law No. 2872, the master of the defendant ship should also be considered as a polluter, therefore, in this case, he has passive litigation capacity, and he is responsible together with the owner for environmental pollution, in accordance with the Supreme Court decision, with the partial acceptance of the case over 462,279.00 TRY on the grounds that the responsibility of the defendant owner has been finalized with the environmental damage of 462,279.00 TL, which was accepted in the previous decision, it has been decided that this amount will be collected jointly and severally from the defendant owner and the defendant master, together with the advance interest to be accrued from the date of the event, 06.10.2002, to be paid to the plaintiff, and the demand for the surplus has been rejected…” 1

It is clear that the Master and the ship Owner are held responsible jointly and severally in the compensation of damages caused by environmental pollution, since, in the bareboat charter contracts, the qualification of the ownership passes to the Charterer, so, the Master and the Charterer will be held responsible. It is regulated in the Ports Law No. 618, who is responsible for the removal of stranded or sunken ships that cause environmental pollution. Prior to the November 2017 amendment to Article 7/1 of the Ports Law, the provision "the owners, masters and agents of these are obliged to remove all ships and their goods that are sunk in a way and condition that may hinder the navigation and voyage within the ports within a short period of time to be determined by the port masters" 2 was in effect. Therefore, when we look at the court decisions made until November 2017, it is seen that the owner of the ship, together with the Charterer and the Master, is held responsible for the environmental pollution caused by the shipwreck and the fuel in it, as it is the responsibility of removing the shipwreck. However, on 28.11.2017, the aforementioned article 7 of the Ports Law was amended 3 , and with this amendment, the word "owner" was removed and the responsibility of removing the semi-submerged or sunken ship that was stranded as an obstacle to navigation was left only to the Charterer and the Master. In the most recent example where the said law change is reflected in court decisions;

“… Pursuant to the provision of Article 28 of the Environmental Law, the defendant company, which has taken over the possession of the ship in accordance with the bare charter agreement, is responsible for the damage it caused as a polluter as the person using it in maritime trade on its own behalf and account through the master, and other defendants are not liable for the damage caused …” 4

It was decided that the owner of the ship was clearly immune from damages caused by environmental pollution, and the responsibility was left to the lessee/Charterer (and its P&I Club) and the Master.

In respect of the case law created after the amendment made in the Ports Law and the existence of bareboat charter agreements, the Owner, who let his ship to the Charterer, is not held responsible for the environmental pollution, the removal of the shipwreck caused by environmental pollution and the elimination of the damage caused. However, it should be noted that the decisions were not made unanimously in the case-laws, and although it is accepted in the dissenting vote that the ship Owner is not responsible under the TCC because he is not the owner, it should be discussed whether they are responsible under the Environmental Law, that the ship Owner will be a polluter under the Environmental Regulations and if responsible for the removal of shipwrecks as per specified that it should be under the general provisions. Although there is no consensus on this issue and possible for the law and case law to change, in today's perspective, the owner of the ship, who does not carry the title of ship operating contractor, is not to be held responsible for the environmental pollution that occurs within the scope of the Turkish Commercial Code and the Environmental Law. At this point, the following question comes to mind: Will the scrap value of the ship after the removal of the sunken ship belong to the original owner of the ship or to the Charterer who removed the sunken ship at his? In such a case, it is a question mark how the balance of interests will be established, and it is a matter of curiosity what the practice and case law will be.

1. The Supreme Court Assembly of Civil Chambers decision numbered E. 2019/4291 K. 2020/2536 T. 1.6.2020
2. The Supreme Court Assembly of Civil Chambers decision numbered E. 2015/12965 K. 2017/4048 T. 3.7.2017
3. Law on Amending Some Tax Laws and Some Other Laws, 7067/5 Art.
4. The Supreme Court Assembly of Civil Chambers decision numbered E. 2019/1444 K. 2021/2040 T. 4.3.2021