This was an appeal from a judgment of the Istanbul 13th Regional Court of Appeal (21 November 2019, 2018/1026-2019/1351) and a judgment of the Istanbul 17th Commercial Court of First Instance (19 February 2018, 2015/445-2018/47). This was a consolidated case (Cases 1 and 2) involving two claims where the plaintiff, acting as an insurer, sought recovery of damages paid to the insureds under two insurance policies due to losses incurred during the same voyage involving the defendant carrier.

In Case 1, the plaintiff stated that its insured, Sarten AŞ, purchased 31 rolls of tin-plated metal items on CFR (Cost and Freight) terms from a company based in Tokyo, Japan, and that these goods were loaded into 11 containers and transported from Hakata, Japan, to İzmir on the vessel Ibn Hazm. On delivery, 21 of the 31 rolls were found to have been rusted from seawater exposure, and the plaintiff paid out the insured TRY 195,646.96 on 18 May 2015, thus being subrogated into the insured's rights against the plaintiff based on art 1472 of the Turkish Commercial Code (No 6102, TCC). The plaintiff then sough to recover TRY 195,646.96 with interest from 18 May 2015, reserving the right to claim further damages. In Case 2, the plaintiff argued that its insured imported 22 rolls of tin-plated metal items from a Tokyo-based company on CFR terms, which were loaded into 8 containers on the vessel Ibn Hazm at Hakata to Istanbul Ambarlı. According to the bill of lading, the defendant, United Arab Shipping Co SAG, acted as the carrier, with Uasac Denizcilik Nak AŞ as the carrier’s general agent. Nine rolls delivered to the insured were rusted due to seawater exposure. An expert report assessed the damage at TRY 110,836.33, and the plaintiff paid its insured TRY 55,000 on 8 October 2015. The plaintiff sought to recover TRY 55,000.00 with interest from 8 October 2015.

In Case 1, the defendant argued that the jurisdiction clause in the bill of lading designated the English courts as competent and stated that English law should apply. It claimed that claim notifications were not made in time or according to the relevant procedure, that the goods were delivered as stated in the bill of lading, and that no internal moisture was detected apart from external dampness. The cause of the rust was not determined, and the expert examination conducted without the defendant's participation was deemed procedurally improper. It also argued that the goods were damaged during storage due to undefined discharge conditions, asserting no responsibility on its part. Citing limited liability provisions, the defendant sought dismissal of Case 1. In Case 2, the defendant also contested the Court's jurisdiction and the plaintiff's standing, insisting on the application of English law as stipulated in the bill of lading, argued that proper notification of the claim was not served, and claimed that an expert examination conducted four months later could not attribute liability to it. The defendant maintained that the damage occurred within the insured's control and that no damage report was available at discharge, thus also seeking dismissal of Case 2.

The Commercial Court of First Instance determined that the jurisdiction objection in the consolidated case was invalid due to the absence of a timely presented and appropriate jurisdiction clause. Both parties had the legal standing to sue, and both cases were filed in time. Expert inspections revealed intense wetness and rusting in the cargo, confirmed by a silver nitrate test to be from seawater, particularly concentrated on the pallets. The resulting condensation and temperature changes inside the sealed containers caused rusting on the rolls, indicating damage from seawater exposure during transport. The unsuitability of the containers, supplied by the defendant and delivered to the shipper, justified the defendant’s liability under the seaworthiness obligation in arts 1141 and 932.3 of the TCC [based on art 3.1.c of the Hague Rules and the Hague-Visby Rules]. The lack of timely notification by the shipper initially suggested that the carrier was not liable. However, this presumption was overturned by the proven seawater contact, confirming the carrier's liability for the damage. Photographs taken after loading in Japan showed no rust, yet subsequent silver nitrate tests after transport confirmed seawater-induced damage. The compensation of the TRY 250,646.96 paid was deemed reasonable. The Court confirmed that the goods were properly handed over to the carrier, transported without any noted damage in the bill of lading, and that the damage occurred under the carrier's control, leading to the acceptance of both cases. The Court ordered recovery from the defendant of TRY 195,646 from 18 May 2015 and TRY 55,000 from 8 October 2015, with interest.

The defendant appealed the decision to the Regional Court of Appeal. The Appeal Court dismissed the appeal on substantive grounds, stating that the decision was procedurally and substantively in accordance with the law.

The decision was further appealed to the Supreme Court of Appeal.

Held: Appeal dismissed.

The Supreme Court affirmed the Regional Court of Appeal’s decision to dismiss the appeals in both cases as procedurally and legally correct.