This was an appeal from the judgment of the Istanbul Specialised Maritime Court of First Instance (18 October 2005, 2005/34-2005/214).

The plaintiff insurer argued that its company insured the relevant steel cargo against transportation risks. It was transported from Pohang Port in Korea to Diliskelesi Port in Izmit on the defendant's vessel. The plaintiff argued that the cargo, loaded onto the ship without any damage, was partially damaged during transit due to exposure to seawater and oil. The plaintiff claimed that the compensation paid to its insured had not been reimbursed by the defendant. As a consequence, the plaintiff sought the recognition of a maritime lien over the defendant’s vessel under art 1235.7 of the (now abrogated) Turkish Commercial Code (No 6762, TCC) [based on art 2.4 of the MLM Convention 1926], in situations where the carriage contract was not executed despite the prepaid freight having been paid; such payments are included in maritime liens. [Under the new Turkish Commercial Code (No 6102), which governs maritime liens under art 1320 [based on art 4 of the MLM Convention 1993] this claim does not qualify as a maritime lien.] The plaintiff claimed 52,757,708.154 TRY, with interest.

The defendant argued that the receiver of the goods failed to provide written notification to the carrier upon receipt, as required by arts 1065 and 1066 of the TCC; therefore, a lawsuit could not be initiated against it. It also claimed that an inspection report confirmed there was no significant damage to the cargo affecting its quality. Furthermore, the ship encountered bad weather during the voyage, and under art 1063.1 of the TCC [based on art 4.2.c of the Hague Rules and the Hague-Visby Rules], where the carrier is exempted from liability for loss or damage arising from perils, dangers, and accidents of the sea, the carrier could not be held liable. The defendant also described the claimed amount as exorbitant and requested the dismissal of the case.

The Court of First Instance determined that the ship encountered a storm during its voyage, and given the seasonal conditions of the northern hemisphere where the storm occurred, the journey was not under ordinary circumstances. Therefore, the incident should be assessed under art 1063/1 of the TCC, and accordingly, the carrier could not be held liable for damage to the cargo caused by dangers and accidents at sea that occur during a storm. Consequently, the Court dismissed the case.

The decision was appealed by the plaintiff.

Held: Appeal upheld.

This case, based on arts 1361 ff of the TCC, pertains to a subrogation claim for compensation. There is no dispute that the insured cargo was damaged due to exposure to seawater and oil, and that the plaintiff insurer paid compensation to the interested party. The critical issue to clarify, considering all of the plaintiff’s claims and the specifics of the case, is whether the defendant carrier was at fault and thus liable for the damage.

According to art 1061 of the TCC [based on art 3.2 of the Hague Rules and the Hague-Visby Rules], the carrier is responsible for any loss or damage to the goods from the time of receipt to the time of delivery, and as per art 1062, as well as for any fault of its servants. The burden of proof of lack of fault lies with the carrier. The seaworthiness of a ship implies that it is equipped, including its general machinery and boilers, to withstand the perils of the sea for the intended voyage (excluding extraordinary dangers), as certified by competent authorities at specified intervals. According to art 817.1 of the TCC, for a ship to be considered seaworthy, it must be capable of withstanding all but extraordinary perils, implying that extraordinary dangers are considered force majeure. When Article 1019 of the TCC [based on art 3.1 of the Hague Rules and the Hague-Visby Rules], the obligation of seaworthiness, is considered, it is evident that the carrier’s duty of care is heightened. The carrier must maintain the ship in a seaworthy condition suitable for sea conditions that are not considered force majeure, take appropriate measures to protect the characteristics of the cargo loaded, and take other necessary precautions specific to the voyage.

According to the ship's log, it is understood that the ship was exposed to wind for a period. Although the lower Court decided that the defendant was not liable under art 1063.1 of the TCC because the ship encountered a storm, the expert report and the lower Court’s decision did not consider the Körfez First Instance Court’s file no 2003/124 and the expert report contained therein. In this expert report, the master deposed that after loading in South Korea and while navigating the Indian Ocean, the ship was caught in severe monsoon rains for two days. Later, it completed its journey to Savona Port in Italy, where the unloading of the port's cargo began early in the morning. The master noted that dew had accumulated overnight on the hatch covers and dripped into the hold when opened, leading to the moisture issue. This event was recorded in the ship’s log and was also listed in the evidence provided by the defendant's counsel on 10 September 2004.

The Court of Appeal held that the lower Court should have specifically considered the transcripts of the master's statement to examine if there was any testimony by the master regarding damage to the insured cargo. Furthermore, if such a statement existed, it would be crucial to assess whether the crew and, thus, the carrier could be considered at fault. The plaintiff’s objections in this regard were not considered by the lower Court, leading to a dismissal of the case based on an incomplete examination. As a result, the judgment was overturned in favour of the plaintiff.