Article issued for the third edition of “Ship Arrests in Practice”, 2008, published by shiparrested.com network.
By Zeynep Özkan
Özkan Law Office
Husrev Gerede Cad. Omer Rustu Pasa Sok. No:12
34357 Tesvikiye / Istanbul
Tel. +(90 212) 327 69 40
Fax. +(90 212) 327 69 43
1. Please give an overview of ship arrest practice in your country.
Turkey is not a party to any of the international conventions on the arrest of ships and the domestic law does not provide for specific rules on this matter. The arrest of ships under Turkish law is in general terms no different than conservatory measures leading to the seizure of other assets owned by a debtor or a wrongdoer and the claim in respect of which a ship may be arrested does not have to be of a maritime character.
The Turkish Commercial Code (“TCC”) shall be amended substantially in the very near future. The Draft Turkish Commercial Code, which is at the agenda of the Turkish Parliament at the moment, regulates the arrest of vessels specifically and adopts some of the provisions of the international conventions on this matter. As the Draft TCC is expected to be enacted soon some of the important provisions of thereof shall also be outlined herebelow.
2. Which International Convention applies to arrest of ships in your country?
Turkey is not a party to any of the international conventions on the arrest of ships.
The Draft TCC incorporates most of the provisions of the International Convention on Arrest of Ships, 1999.
3. Is there any other way to arrest a ship in your jurisdiction?
The provisions of Turkish Bankruptcy and Liquidation Code and Turkish Procedural Code dealing with conservatory measures applicable to any assets apply to the arrest of ships as well. According to the aforesaid provisions, the claimant has to prove, on a probability basis, that there is a claim and a possible danger of not being able to satisfy the claim after a judgement in merits is obtained in the absence of a conservatory measure.
The Draft TCC, when enacted, shall regulate the arrest of ships specifically.
4. Are these alternatives e.g. saisie conservatoire or freezing order?
All types of conservatory measures, including those applicable to ships, are governed by the provisions of Turkish Bankruptcy and Liquidation Code and Turkish Procedural Code. Under the current regulations, arrest of ships is only one form of conservatory measure and the claimant may apply to other types of conservatory measures as well.
After the enactment of the Draft TCC, the provisions of Draft TCC shall be applicable to the arrest of ships. The Draft TCC specifically provides that arrest of ship shall be the only conservatory measure with respect to maritime claims.
Claims subject to ship arrest
5. For which types of claims can you arrest a ship?
Under the current regulations, in principle, arrest of a ship in Turkey can take place for all types of claims regardless of whether the claim has a maritime character or is connected with the ship to be arrested or not.
The Draft TCC, however, adopts the definition of “maritime claim” provided in the International Convention on Arrest of Ships, 1999 and restricts the arrest of ships to the “maritime claims” enumerated in the Draft TCC.
6. Can you arrest a ship irrespectively of her flag?
A ship can be arrested in Turkey irrespective of her flag as per the provisions of the Turkish Bankruptcy and Liquidation Code and Turkish Procedural Code and, when encated, under the provsions of the Draft TCC.
7. Can you arrest a ship irrespectively of the debtor?
Except for arrests based on a maritime lien, only the vessels owned by the debtor can be arrested.
8. What is position as regards sister ships and ships in associated ownership?
Under the current regulations, all of the assets of the debtor may be arrested, which may also include other ships of the debtor, and therefore there is no specific provisions in relation to sister ship arrest. As to the arrest of ships in associated ownership, only the ships owned by the same debtor may be arrested. The ships belonging to the affiliated companies of the debtor may not be arrested in principle.
The Draft TCC specifically deals with the issue and permits the arrest of any other ship of the debtor provided that they are owned by the debtor liable for the maritime claim.
9. What is the position as regards Bareboat and Time-chartered vessels?
Except for arrests based on a maritime lien, only the vessels owned by the debtor can be arrested. The arrest of a ship due to the debt of a charterer is not possible if such debt does not grant a maritime lien.
10. Do your Courts require counter-security in order to arrest a ship?
The court may and in most of the cases shall require the submission of a counter-security in the form of bank letter of guarantee or cash money, the amount of which is at the discretion of the court, but usually varies between 15 to 40% of the claim amount.
11. Is there any difference in respect to arresting a ship for a maritime claim and a maritime lien?
The procedure for arrest as a conservatory measure for a maritime lien is the same as described herein.
12. Does yourcountry recognize maritime liens? Under which International Convention and/or domestic law if any?
Turkey is party to the Brussels Convention on the Unification of Certain Rules Relating to Maritime Liens and Mortgages, 1926. Turkish Commercial Code, also, provides for claims that give maritime lien.
13. What lapse of time is required in order to arrest a ship since the moment the file arrives to your law firm?
After the documentation is ready, the application can be made and the arrest order can be obtained within a couple of days.
14. Do you need to provide a POA, or any other documents of the claim to the Court?
The conservatory measures leading to the arrest of a ship can be obtained with an ex parte application setting out the grounds of arrest. The following documents must be submitted with the application:
1) Power of attorney, notarised and duly legalized (in urgent cases , it is possible to submit the application with a fax copy of the power of attorney and sometimes without the legalization provided that the duly issued original be submitted at a later stage)
2) Documents evidencing a possible claim (documents in foreign language must be translated into Turkish and sworn translations along with notarisation may be required if objected by the other party)
15. What original documents are required, what documents can be filed electronically, what documents require notarisation and/or apostille, and when are they needed?
It is sufficient to receive fax/electronic copy of the documents related to the claim. Notarization/apostilization of the claim documents is not required unless there is an objection about forgery or similar matter.
The only document that is required to be notarized and apostilled is the POA. However the original of the POA is not required at the stage of filing the arrest application. We can file the claim by the duly legalized copy of the POA.
16. According to which rules of law will your Courts acknowledge jurisdiction on the main action of the claim?
Turkish courts shall apply Turkish Private International Procedural Law to determine the jurisdiction in merits.
17. Which period of time will be granted by the Courts in order for the claimants to take legal actions on the merits?
The action in merits must be filed before the competent tribunal within either seven or ten days (depending on the type of conservatory measure order obtained) as from the date of the court order.
18. Do the Courts of your country acknowledge wrongful arrest?
Should the arresting party lose the action in merits, they may be held liable for loss and damages suffered by the defendant.
19. Do the Courts of your country acknowledge the pierce and lift of the corporate veil?
The Turkish courts are not inclined to acknowledge the piercing or lifting of the corporate veil.
20. Is it possible to have a ship sold pendente lite; if so how long does it take?
In the event that the costs of maintaining the arrested ship becomes significantly substantial or the value of the ship decreases substantially or due to similar reasons the finalization of the pending litigations may not be waited, there are grounds to apply to the court or Bailiff Office for the sale of the ship pendente lite. The time scale for the relevant process may vary substantially.