This was an appeal from the judgment of the Istanbul 51st Commercial Court of First Instance (29 March 2011, 2009/365-2011/103).

The plaintiff claimed that the defendant, acting as an agent of the carrier, carried its goods from China to Türkiye, and then misdelivered them to third parties without any instruction, confirmation, or production of the original bill of lading. As a result, the plaintiff compensated the shipper for damages which occurred due to the misdelivery of goods to unauthorised third parties.

The defendant claimed that the plaintiff was required to prove subrogation of rights and also a right to sue forfeited by the shipper to the plaintiff pursuant to art 1067 of the Turkish Commercial Code (TCC) [which is based on art 3.6 of the Hague-Visby Rules: although Türkiye is only a State Party to the Hague Rules, the TCC incorporates a set of rules which purport to adapt elements of the Hague-Visby Rules].

The Court of first instance affirmed that the shipper had filed a lawsuit based on misdelivery of cargo carried by sea without the production of original bills of lading in the High Court in Hong Kong against F1 Elektronik, named as the consignee in the bills of lading numbered N1 and N2, but without having possession of these bills of lading. The Court also found the parties to that litigation reached an amicable settlement, and the plaintiff compensated the shipper in the sum of USD 50,000. The Court observed that the defendant acted as an agent of the plaintiff, and since the agent's registered office was situated in Türkiye, Turkish law should apply to such a case.

The Court of first instance further found that the bill of lading is a document of title, and a person presenting it to the carrier or its agent is ostensibly entitled to collect the goods. However, in this case, the defendant handed the goods over to an unauthorised party who did not hold the original bill of lading. In doing so, the defendant did not act as a prudent carrier, and should be liable to compensate the plaintiff. Additionally, the Court observed that the relevant bills of lading stipulated the application of the Hague-Visby Rules to any disputes, and these Rules provide that the obligation of the carrier to take care of the cargo is continuous and runs from 'tackle to tackle', ie from the commencement of loading to the completion of discharge, but often the obligation to load and discharge the cargo is transferred to the shipper or consignee if charterparty terms are properly incorporated. As a consequence, the Court held that the defendant was responsible for the misdelivery of cargo to an unauthorised party pursuant to the Hague-Visby Rules [based on art 1178 of the TCC and art 3.2 of the Hague-Visby Rules: although Türkiye is only a State Party to the Hague Rules, the TCC incorporates a set of rules which purport to adapt elements of the Hague-Visby Rules].

The defendant appealed to the Supreme Court of Appeal.

Held: The appeal is admissible.

The Supreme found that the relationship between the parties arose out of a principal and agency agreement, and it was a requirement for the defendant agency to act as a prudent carrier while conducting business on behalf of the principal plaintiff.

The Supreme Court affirmed that the case was based on a recourse action arising out of the defendant agency's misdelivery of goods at the destination to unauthorised parties. In addition to other defences, however, the Court found that the defendant raised an objection to the compensation amount. The Court further found that the expert report stated that the relevant bill of lading did not specify the value of the goods. The value of the carried cargo was only stated in the petition as part of court proceedings that took place in the High Court in Hong Kong. Therefore, the market value of the cargo at the destination should have been determined in the Court of first instance proceedings, but since there was no expert on this field in the Court-appointed expert committee, no market value had been determined. In this respect, the Court of first instance’s judgment should be dismissed, considering that the defendant agency was under an obligation to pay the actual damage suffered by the plaintiff, and the Court should have rendered the judgment on the basis of the value of delivered goods without presentation of the original bill of lading by involving a specialist expert's opinion on the value of the goods on delivery which did not exceed the compensation amount paid by the plaintiff to the shipper.