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Reckless Behavior

Reckless Behavior

Meaning under Turkish Maritime Law

Recently we came across a case where the terms “recklessness” was under scrutiny and we had to delve into the subject in detail. The case is that we, as the owners’ lawyers, launched a case to limit the liability as per 1976 LLMC (with 1996 protocol and 2012 Amendment), and the opponent parties were arguing that the right to limit the liability does not attach because the conduct of the crew during the incident was reckless.

Legal Framework

LLMC Article 4 states that “a person liable shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.”

The Turkish Commercial Code (“TCC”) goes one step further by referring to this article of the Convention and lists in Article 1343 that whose fault must be taken into consideration while evaluating the right to limit liability. The Article regulates that;

“In applying Article 4 of the 1976 Convention and the second paragraph of Article V of the 1992 Liability Convention, the negligence of the following persons shall be taken into account

In the case of persons, the negligence of each person.

In the case of legal entities, the negligence of the organs and the negligence of the persons constituting the organs, which by their acts put the legal entity under obligation pursuant to Article 50 of the Turkish Civil Code.

In companies, the negligence of the partners of the company.

The negligence of the shareholders and the manager in the case of a simple ship owning.

The negligence of the persons legally representing the above-mentioned persons based on a general or special authorization.”

Sub-article “e” of 1343 raises the question of whether the master should also be considered within this scope.

Whose Reckless Behaviour?

Interpreting Article 1343 of the Turkish Commercial Code

The sub-article “e” of the article 1343 which states "The negligence of the persons legally representing the above-mentioned persons based on a general or special authorization." poses a significant risk for the shipowner.

The Turkish Commercial Code regulates in another article that the master has the authority to represent the shipowner when the ship is outside of her Port of Registry;

“When the ship is outside her Port of Registry, the master, is authorized to carry out all actions and dispositions on behalf of the shipowner regarding the ship's outfitting, fuel and provisions, crew members, and maintaining the ship in a condition suitable for the sea and cargo, and generally to ensure the safe continuation of the voyage with third parties.”

When these two articles are evaluated together, there is a risk of the Turkish Courts considering the master within the scope of Article 1343/e of the TCC on the grounds that the master has the authority to represent the shipowner outside of her Port of Registry, and consider the master among the persons who will prevent the limitation of the shipowner's liability with his reckless behaviour.

Alignment with IMO Resolution

IMO which is the organizer of LLMC, has put this issue on its agenda in order to prevent the unfair outcomes in practice due to the different interpretations of the Convention and a resolution numbered A.1164 and dated 15.12.2021 was adopted by the member states. This resolution states that;

“The states parties to the protocol of 1996 to amend the convention on limitation of liability for maritime claims, 1976, present at the thirty-second session of the assembly of the international maritime organization,…

AFFIRM that the test for breaking the right to limit liability as contained in article 4 of the 1976 LLMC Convention is to be interpreted:

(a) as virtually unbreakable in nature i.e. breakable only in very limited circumstances and based on the principle of unbreakability;

(b) to mean a level of culpability analogous to wilful misconduct, namely:

a level higher than the concept of gross negligence, since that concept was rejected by the 1976 International Conference on Limitation of Liability for Maritime Claims;

a level that would deprive the shipowner of the right to be indemnified under their marine insurance policy; and

a level that provides that the loss of entitlement to limit liability should begin where the level of culpability is such that insurability ends;

(c) that the term "recklessly" is to be accompanied by "knowledge" that such pollution damage, damage or loss would probably result, and that the two terms establish a level of culpability that must be met in their combined totality and should not be considered in isolation of each other; and

(d) that the conduct of parties other than the shipowner, for example the master, crew or servants of the shipowner, is irrelevant and should not be taken into account when seeking to establish whether the test has been met;”

Given that Turkey, as a member of the International Maritime Organization, was present and accepted the resolution at the aforementioned 32nd session, it is essential that Turkish courts align with the international standards outlined in IMO Resolution A.1164.

The above mentioned resolution explicitly states that the conduct of the master, crew, or other servants of the owner should not influence the determination of a shipowner's ability to limit liability. Aligning with these standards not only ensures consistency with global maritime practices but also promotes uniformity and predictability in handling maritime liability issues.

We will continue to keep you updated on this matter.

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