This was an appeal from the judgment of a Commercial Court of First Instance (15/02/2016, 2014/973-2016/41).

The plaintiff insurer claimed that cacao beans insured in a cargo insurance policy on behalf of the insured, Önen Gıda Sanayi ve Ticaret AŞ, were damaged during their transportation to Türkiye. The plaintiff paid its insured under the policy and sought to collect TRY 18,051,76 plus interest from the defendants.

The defendant Moliva Denizcilik AŞ (Moliva), the owner of the MV Palovit and the carrier, argued that the cargo holds were disinfected upon the instruction of the insured, and that the hatch covers were kept closed for five days in order for disinfection to be effective.

The Court of first instance observed that the damage to the goods occurred while the goods were under the care and custody of the defendant carrier; the damage to the goods occurred as a result of condensation of moisture in the air inside the holds due to the temperature difference caused by a lack of ventilation, and therefore the defendant carrier was liable for the damage under art 1178 of the Turkish Commercial Code (the TCC) [which is based on art 3.2 of the Hague Rules, art 3.2 of the Hague-Visby Rules, and art 4.2 of the Hamburg Rules - although Türkiye is only a State Party to the Hague Rules, the TCC incorporates a set of rules that purport to adapt elements of the Hague-Visby Rules and the Hamburg Rules].

The Court further found that the plaintiff stated that the lawsuit was filed against Moliva as a representative of Palovit Shipping SA, to avoid a lack of standing to sue. Since Moliva was not the appropriate defendant, the lawsuit filed and attributed to Moliva should be dismissed. Consequently, the case should be partially upheld in favour of the defendant, and the defendant must compensate the plaintiff TRY 16,518,38 plus interest.

The defendant appealed to the Supreme Court of Appeal.

Held: The appeal is admissible. The judgment of the first instance Court is reversed in favour of the defendant on the grounds below.

The Supreme Court of Appeal affirmed that the merits of the case 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, in the expert report on which the Court of first instance based its judgment, it was determined that the damage to the goods occurred due to the condensation of moisture in the holds due to the temperature difference that happened as a result of the closing of the hatch covers. In the expert report, it was also mentioned that this was due to pesticide application, and the inability to perform the necessary ventilation during the disinfection period.

The Supreme Court further found that the defendant objected to the expert report during the lower court proceedings, arguing that the defendant carrier disinfected the hold as per the plaintiff’s instructions, and that the disinfection company had informed the defendant that the hatch covers should be kept closed in order for the disinfection process to be effective.

As a result, the plaintiff accepted that the instructions were given to disinfect with pesticides. Accordingly, the Supreme Court reached a conclusion that the defence of the defendant that it kept the hatch covers closed in accordance with the instruction given by the plaintiff was considered correct. The Supreme Court observed that the Court of first instance evaluated the case without considering the objections to the expert report, or obtaining an additional expert report involving evaluations regarding the objections to the first expert report.