This was an appeal from the judgment of the Istanbul 17th Commercial Court (11 October 2017, 2014/744 - 2017/304).

The plaintiff insurer, Zurich Sigorta AŞ, paid its insured, Shenker Arkas Nakliyat ve Ticaret AŞ, under its insurance policy and sought to collect TRY 392,436.60 from the defendants, arguing that the first defendant, Mega Yat Denizcilik Hizmetleri ve Ticaret Ltd Şirketi, was liable as freight forwarder and contractual carrier, and that the second defendant was liable as shipowner and actual carrier, for damage to the motor yacht La Plata during its transportation from Dubai, UAE, to Marmaris, Turkey, on the MV BSLE Pacific.

The second defendant claimed that the courts of Genoa, Italy, had jurisdiction according to the provisions of the relevant bills of lading. A statement providing that the carrier will not be liable for loss of or damage to deck cargo was inserted in the bill of lading, as provided by art 1151 of the Turkish Commercial Code (the TCC) [which is based on art 9 of the Hamburg Rules - although Türkiye is a State Party to only the Hague Rules, the TCC incorporates a set of rules which purport to adopt elements of the Hague-Visby and Hamburg Rules]. The defendant therefore argued that it could not be responsible for any loss of or damage to deck cargo whatsoever, and howsoever caused; and requested the dismissal of the lawsuit in terms of jurisdiction and on the merits.

The first defendant argued that the bill of lading included a jurisdiction clause authorising a foreign court to hear the matter; that the plaintiff had a lack of standing to sue; that no claims could be directed against the first defendant freight forwarder; and therefore that the second defendant acting as shipowner should be liable as the carrier. The second defendant also requested dismissal of the lawsuit.

The Court of first instance held that the proof of the foreign jurisdiction clause had failed since the reverse side of the bill of lading could not be obtained. The carrier was liable for the damage under art 1178 of 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], which provides that:

In implementing the transport contract, the carrier must pay strict attention, as expected from a prudent carrier, for the loading, stowing, handling, transportation, protection, observance, and unloading of the cargo.

The Court of first instance further referred to art 1243 of the TCC [which is based on art 3.8 of the Hague Rules], which provides that:

Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to, or in connection with, goods arising from negligence, fault, or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in this Convention, shall be null and void and of no effect. A benefit of insurance in favour of the carrier or a similar clause shall be deemed a clause relieving the carrier from liability.

Concerning the articles above, the Court observed that the defendants' arguments regarding the non-liability clause should be disregarded. The Court further found that although stowing is at the shipper's risk, and is carried out by the shipper, the carrier is still under an obligation to exercise due diligence in stowing the goods in performance of the contract of affreightment. Therefore, the master is responsible for supervising the loading and stowing operations on behalf of the carrier. It followed that the carrier was liable for the damage to motor yacht which tilted over on the deck of the vessel during the voyage as a result of incorrect stowage caused the master's failure to perform supervision for the loading and stowage operations. Consequently, the Court concluded that the shipper, contractual carrier, and actual carrier were jointly and severally liable for the damage arising from incorrect stowage under arts 1112 and 1178 of the TCC.

The Court of first instance further found that the first and second defendants were jointly liable for the liability amount under arts 1178 of the TCC, and also art 1191 of the TCC [which is based on arts 10.1 and 10.2 of the Hamburg Rules]. Accordingly, the provisions governing the liability of the contractual carrier under art 1191 of the TCC also apply to the liability of the actual carrier for the carriage performed by it. Nonetheless, the contractual carrier remains responsible for the entire carriage even if the performance of all or part of the carriage is entrusted to an actual carrier.

Finally, the Court partially accepted the claim since the damage amount claimed by the plaintiff remained within the limits of liability stated in art 1186 of the TCC [which is based on 4.5.a of the Hague-Visby Rules]. Accordingly, the carrier shall not be liable for any loss or damage to goods in an amount exceeding the equivalent of 666.67 Special Drawing Rights (SDRs) per package or unit or 2 SDRs per kilo of the gross weight of the goods, unless the nature and value of the goods are declared by the shipper before shipment and inserted into the bills of lading. The plaintiff and the first defendant appealed and counter-appealed to the Supreme Court of Appeal.

Held: The plaintiff's appeal is admissible. The judgment of the first instance Court is reversed in favour of the plaintiff on the grounds below. The first defendant's counter-appeal is inadmissible, and the first instance judgment is upheld in that respect.

The first instance judgment was proper in terms of the applicable provisions referred to in the TCC. Since the first defendant issued the freight invoice and collected the freight, it is responsible as a carrier. Although a non-liability clause was inserted into the bill of lading, since the damage to the motor yacht occurred on deck as a result of incorrect loading and stowage, the first defendant's appeal should be dismissed.

The merits of the case are based on a recourse claim for money paid by the plaintiff insurer due to damage to insured goods during transportation under art 1481 of the TCC. The Court observed that the relationship between the insured and the first defendant was based on a contractual carriage sub-contract under which the second defendant undertook the actual performance of carriage. The voyage was from Dubai to Marmaris, but later the discharge port was changed as the Port of Antalya. The motor yacht was brought to the loading port by the shipper, and the stowage was carried out by the shipper as well. The motor yacht was carried on deck as stated in the bill of lading, but the support legs of the cradle which the motor yacht placed on were not cargoworthy. In other words, the motor yacht was loaded and stowed on deck without proper lashing and securing of the cargo, which caused the damage to motor yacht. As a consequence, although the stowage operation was carried out by the shipper, the carrier is under an obligation to load appropriately, handle, stow, carry, keep, care for, and discharge goods carried on board the ship.

The Supreme Court of Appeal referred to art 1143 of the TCC, which regulates that where loading and stowage operations are undertaken by the shipper, the transportation expense of the goods to the ship belongs to the shipper, and the loading cost to the carrier, unless otherwise stipulated by the contract. The Court observed that although the Court of the first instance justified that the loading was carried by the cargo interests concerned, it could not be understood which party was meant by the cargo interests involved. Concrete evidence of how the Court of the first instance reached this determination was not disclosed.

The Court further observed that although it was claimed that loading and stowage was carried out by Straight Line Cargo Services LLC (Straight Line, a stevedoring company), and that this company was the agent of Bogazzi, it could not be determined from the scope of the case file that Straight Line undertook this operation. It is not clear whether the stevedoring company was helping the parties to perform. In this case, while the Court of first instance should have determined who carried out the loading and unloading, the relationship between Straight Line and the parties should have been clarified, and the fault each of the parties should have been evaluated accordingly. Therefore, the first instance judgment should be dismissed based on the above lack of examination.