This was an appeal from the judgment of the Izmir 5th Commercial Court of First Instance (7 May 2015, 2014/449-2015/363).

The Court of first instance found that the defendant was responsible for transporting goods valued at USD 23,736 to Türkiye, but the goods were not delivered to the plaintiff consignee, and no information was provided regarding this matter. In fact, the ship (which was owned by the actual performing carrier with whom the defendant entered into an agreement to carry the relevant goods) sank during the voyage. The plaintiff argued that the defendant should be held liable for the cargo 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 provisions which purport to adopt elements of the Hague-Visby and Hamburg Rules].

The defendant argued that the plaintiff lacked standing to sue it; and that no claims could be directed against the defendant acting as a freight forwarder for the relevant shipment, since it fulfilled its obligation by duly organising the transport. There was no fault or causal link in the damage which could be attributable to the defendant. In particular, the defendant argued that the carrier's duty of care was not violated, and all necessary notifications were made to the actual carrier. Nonetheless, the incident occurred due to bad weather conditions. Therefore, the shipowner (the actual carrier) should be liable as the carrier. The defendant further claimed that by not insuring the goods before the voyage, the plaintiff did not act as a prudent merchant, and that the carrier's limited liability provisions should be applied. Additionally, the defendant argued that the goods were purchased on a FOB basis. This meant that when the goods passed the ship’s rail, risk and all other costs passed to the buyer. The defendant thus requested the dismissal of the lawsuit.

The Court of first instance found that there was no evidence showing that the plaintiff and the defendant entered into a contract of carriage by sea whereby the carrier undertook against payment of freight to carry goods by sea from one port to another; and also no evidence that the defendant had a freight invoice issued on behalf of the plaintiff. The Court further found no other bill of lading other than the bill of lading numbered Rex 853130114, dated 6 June 2013, issued by Rex International Forwarding Co Ltd, who was not involved in the case but acted as a contractual carrier in regard to the relevant shipment. The Court observed that contrary to the argument that the defendant acted solely as a freight forwarder who organised the relevant carriage and the processes related to carriage, the defendant actually undertook carriage of goods as an actual carrier under art 926 of the TCC. However, since no bill of lading or any similar document such as freight invoice was issued by the defendant, the Court held that the defendant should not be liable for the damage as a carrier under arts 1.a and 1.b of the Hague Rules. 

The Court concluded that the defendant, as the actual carrier, would be liable under art 1178.1 [which is based on art 3.2 of the Hague Rules] and art 1179.1 of the TCC [which is based on art 4.2.q of the Hague Rules and art 4.2.q of the Hague-Visby Rules], when read with 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 not before the Court, Rex International Forwarding Co Ltd, remained responsible for the entire carriage even if the performance of all or part of the carriage was entrusted to an actual carrier. Hence, the Court ordered the dismissal of the lawsuit because the defendant was not responsible under either the provisions of the Hague Rules or the Turkish Commercial Code.

The plaintiff 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.

The Supreme Court of Appeal found that while the Court of first instance should have concluded the case with oral proceedings, there was an inaccuracy in the judicial process; therefore, the first instance judgment should be dismissed based on the above lack of oral proceedings in procedural law.