This was an appeal from a judgment of the Istanbul 12th Regional Court of Appeal (21 November 2019, 2018/919-2019/1442) and a judgment of the Istanbul 17th Commercial Court of First Instance (12 February 2018, 2016/457-2018/36).

The insurer plaintiff claimed that the cargo, exported by Kordsa Global AŞ, was insured against transportation risks and that the defendant was responsible for arranging transportation and providing the containers. The cargo was transported in two containers from Istanbul Ambarlı to Dalian, China. Upon delivery to the consignee, the cargo was found to have sustained damages, including tearing, breaking, and scattering. Following these damages, on 24 March 2016, the plaintiff compensated the insured for TRY 71,065.38, obtaining an assignment and release of claims in the process. The plaintiff asserted that the defendant, as the carrier, was liable under art 1178 of the Turkish Commercial Code (TCC) [based on art 3.2 of the Hague and Hague-Visby Rules]. The plaintiff sought to recover TRY 71,065.38 with interest.

The defendant argued that it had merely acted as an intermediary between the carrier and the shipper and thus could not be liable. It contended that the claim was not reported in a timely and proper manner, and that the plaintiff's survey report was unilaterally prepared without the signature of the carrier or its representative, making it invalid. Furthermore, the expert report did not substantiate the defendant's liability, the estimated damage cost was excessive, and the cargo was transported in a container with loading, stacking, and securing performed by the shipper. The bill of lading proved this with a 'shipper’s load, stow, and count' notation, implying that the carrier could not be held liable for damages resulting therefrom. The defendant also argued that the damage was not covered by insurance and sought the dismissal of the lawsuit.

The Commercial Court of First Instance ruled that the damage resulted from improper loading, stacking, and securing of the cargo within the container for sea transport. According to the records in the sea waybill and the bill of lading issued by the performing carrier, the container was delivered to the defendant with its doors unsealed. This implied that the defendant, as the carrier, was obliged to check the shipper's stowage and lashing within the container to ensure that it met maritime transport standards, which it failed to do, leading to the cargo being damaged through dispersion and tearing during transport. As a result, the carrier was found liable for failure to take proper care of the cargo under art 1178 of the TCC [based on Art 3.2 of the Hague and Hague-Visby Rules]. The total damage was quantified at USD 25,789.68, which equated to TRY 74,490.91. After deducting TRY 3,000 for salvage value, the actual damage amounted to TRY 71,490.90.

The defendant appealed to the Regional Court of Appeal. The Regional Court of Appeal noted that the defendant organised the shipment as an intermediary between the carrier and the shipper, and that the loading, stowing, and sealing of the containers were indeed performed by the shipper, as indicated in the bill of lading noting 'FCL/FCL' and 'shipper’s load, stow and count'. It was established from the bill of lading issued by the actual carrier and the records provided by the defendant that the containers were delivered to the defendant with the doors open and that the containers were sealed by the defendant. According to the expert report, the damage was caused by improper loading, stacking, and securing within the container for sea transport. Since the containers were delivered to the defendant without being sealed by the shipper, the defendant, as the carrier, should have exercised due diligence and care to inspect the stowage and lashing inside, which it failed to do. As such, the appeal was dismissed and the defendant was found liable under art 1178 of the TCC. The Appeal Court also dismissed the defendant’s claim that its liability was limited to USD 500 per container or package as per the bill of lading, holding the defendant liable for the full amount of the damage, ie USD 25,789.68.

The decision was appealed to the Supreme Court of Appeal.

Held: Appeal accepted.

The Supreme Court of Appeal found that the defendant carrier had no obligation concerning the stacking and securing of the goods inside the container under the FCL term, nor did the defendant have the duty or ability to inspect how the goods were stowed inside a closed, albeit unsealed, container. As such, the defendant’s appeal was accepted, and the decision of the Regional Court of Appeal to dismiss the appeal on substantial grounds was reversed, with the case file to be returned to the Court of First Instance.