This was an appeal from the judgment of the Istanbul 52th Commercial Court of the first instance (19 November 2013, 2012/302-2013/238).

The plaintiff insurer paid its insured under its insurance policy. It sought to collect TRY 11,905,41 plus interest from the defendant, arguing that the defendant was liable as a carrier for cargo damage during its transportation from Antwerp, Belgium, to Diliskelesi Yilport, Türkiye.

The defendant, E Lines Shipping Co, argued that since it was not the shipowner, the lawsuit was addressed to the wrong party. The defendant claimed that the survey at the discharge port was not duly completed, and the claim notice was not given on time. The defendant further argued that the claim was outside the scope of the insurance coverage, and that the front of the bill of lading included 'Liner in/Free Out' and 'Particulars furnished by the merchant but not acknowledged by the carrier' inscriptions. This could be understood to mean that the obligations of loading the cargo onto the vessel rested upon the carrier, discharging the goods from the vessel rested upon the consignee, and the description of the goods rested upon the shipper. The defendant applied for dismissal of the lawsuit.

The Court of first instance affirmed that the goods subject to the maritime transport were damaged during the discharge operation, and the consignee was liable for this operation as per the 'Free out' clause, since this clause indicated that the defendant carrier was not liable for discharging the goods from the vessel. As a consequence, the Court dismissed the lawsuit.

The plaintiff appealed to the Supreme Court of Appeal.

Held: The appeal is admissible. The judgment of the Court of the first instance is reversed in favour of the plaintiff insurer.

The Supreme Court of Appeal affirmed that the case's merits are based on the request for the recourse collection paid by the plaintiff insurer due to damage to insured goods during transportation.

The Supreme Court observed that if discharge is carried out in compliance with a 'Free out' clause in the bill of lading, it is true, in principle, that the carrier should not be liable for damage to goods arising out of this discharge operation. The Court referred to art 1178.1 of the Turkish Commercial Code (the TCC) (numbered 6102) [which is based on art 3.2 of the Hague Rules/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 include elements of the Hague-Visby Rules] which provides that '[t]he carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried'.

With reference to this article, the Supreme Court found that it states only some elements of the carrier's obligation to care for the cargo. In fact, this provision also involves more encompassing measures, including keeping the cargo in a good condition and the arrival of the cargo at the destination in an undamaged condition (Çağa and Kender (eds), Contract of Carriage, Maritime Law II 135). The Supreme Court further observed that if 'fio' and 'fios' clauses are incorporated in the carriage contract, some of the aforesaid duties of the carrier and the liability arising out of failure to comply with these duties may be shifted to the cargo interests; however, these conditions would not exclude the master's duty of care and custody of the loading and discharging operations (Çağa and Kender 136).

In this case, the bill of lading incorporated a 'Free Out' clause. This could be understood to mean that while the loading obligation is placed upon the charterers, the discharging obligation is placed upon the consignee (Fahiman Tekil, Maritime Law 526). The Supreme Court further found that, although loading, stowage, and discharge operations are undertaken by cargo interests, it is the duty and responsibility of the master to ensure that such operations comply with what marine customary rules require, pursuant to art 1091 of the TCC. In this respect, the carrier's obligation to care for the stowing and discharge of the cargo is continuous, and it is a shared liability.

However, the Supreme Court observed that, when reaching its decision, the Court of the first instance did not evaluate that discharge was conducted through a deck crane, as stated in the survey report. Rendering a judgment in such a manner with an incomplete examination was inappropriate. Therefore, the reversal of the Court's decision in favour of the plaintiff was required.