Introduction

This study analyzes fundamental questions such as whether collateral must be deposited in the provisional attachment of ships, how the amount of collateral is determined, when it is returned, and the risks collateral poses for the creditor or the debtor. Provisional attachment is a temporary legal protection measure sought by the creditor to secure their claim. However, when applied to an asset with high commercial value and operating costs, such as a ship, it carries the potential to cause serious damages to the debtor. Therefore, the legislator and judicial practice consider the collateral mechanism an important tool to balance the interests of the parties. The study reveals how the provisions of the Enforcement and Bankruptcy Law (İİK) and the Turkish Commercial Code (TTK) are interpreted and applied by the courts.

1. Is it mandatory to deposit collateral in the provisional attachment of a ship?

For the provisional attachment of a ship, it is mandatory to deposit security as a general rule. This obligation arises from two different legal bases and purposes.

Creditor’s Obligation to Provide Security: It is a general rule for the creditor requesting a provisional attachment to deposit security to cover the damages that the debtor and third parties may suffer if the attachment proves to be unjustified. This obligation is referred to in almost all decisions. Pursuant to Article 259/1 of the EBL, “if the creditor requesting a provisional attachment proves to be unjustified in the attachment, they are liable for all damages suffered by the debtor and the third party as a result thereof and … obligated to provide security.”

Specific Requirement for Maritime Claims: The Turkish Commercial Code has introduced a special regulation for maritime claims. Pursuant to Article 1363 of the TCC, “the creditor requesting a provisional attachment decision to secure a maritime claim is required to provide security in the amount of 10,000 Special Drawing Rights (SDR).”

Debtor’s Removal of Attachment by Providing Security: Another scenario is for the owner or debtor of the provisionally attached ship to provide security to remove the attachment from the ship and transfer it to the security, allowing the ship to continue its voyage. As stated in a decision by the Istanbul Regional Court of Justice, Article 1371 of the TCC grants this possibility: “the removal of the provisional attachment may be requested from the court by the owner or debtor of the ship by providing sufficient security for the entire maritime claim, interest, and expenses, provided that it does not exceed the value of the ship.”

Exceptionally, security may not be required if the claim is based on an enforceable judgment (a final court decision) or if certain special claims specified in the TCC (e.g., claims of seafarers) are involved.

2. How Much Security is Deposited When Requesting the Provisional Attachment of a Ship?

Fixed Amount in the TCC: Specifically for maritime claims, an amount equivalent to 10,000 SDR as specified in Article 1363 of the TCC may be required to be deposited.

Full Claim and Ancillary Charges: In cases where the debtor deposits security to lift the attachment, the security amount is generally determined at a level that fully covers the claim, often as “the full amount of the claim subject to provisional attachment … and in consideration of the probable interest on the claim and court costs.” 

Increase of Security: As emphasized in the decisions of the Antalya Regional Court of Justice, the opposing party (debtor) may claim that the deposited security is insufficient and request its increase. In such a case, the court may increase the security, taking into account factors such as “the daily operating expenses incurred for the ship during the period it was detained from voyage due to provisional attachment, and the profits lost due to the provisional attachment.” 

The security can be submitted to the file either in cash or as a definitive and indefinite letter of guarantee obtained from a reputable bank.

3. When is the Security Refunded?

The refund of security depends on the cessation of the reason for its deposit. The prominent conditions for refund highlighted in the decisions are as follows:

Conclusion of the Case and Finalization of the Enforcement Proceedings: If the creditor wins the case and the provisional attachment turns into a final attachment, the collateral can be returned as its protective function has ended. The Istanbul Regional Court of Justice stated in one of its decisions that “since the provisional attachment order has turned into a final attachment, it was incorrect to reject the request when a decision should have been made to return the collateral taken regarding the provisional attachment order…”

Debtor’s Consent: If the debtor, against whom the attachment was placed, explicitly consents to the return of the collateral, the collateral is returned.

No Compensation Lawsuit Filed: By analogy with the Civil Procedure Code (HMK), if the debtor does not file a compensation lawsuit arising from the unjust attachment within one month from the lifting of the provisional attachment or the finalization of the case, the collateral is returned. A decision by the 13th Civil Chamber of Istanbul points to this rule.

Invalidity of the Provisional Attachment: If the provisional attachment becomes invalid due to reasons such as the creditor not filing the necessary lawsuits within the periods specified by law (e.g., within 7 days or 1 month upon the debtor’s objection), the return of the collateral comes into question.

4. What is the Forfeiture of Collateral and What are the Risks?

“Forfeiture of collateral” means that the deposited collateral is not returned to the creditor, but is used to compensate for the damages of the debtor or third parties who suffered from the unjust provisional attachment.

Primary Risk: Being Found Unjustified: The biggest risk for the creditor is being found unjustified in the lawsuit they filed or in their request for a precautionary attachment. As stated by the Istanbul 14th Civil Chamber, the purpose of collateral is; “to cover the damage that may arise from the inability to dispose of the assets subject to precautionary attachment, should the creditor be found unjustified in their request for precautionary attachment.”

Liability for Compensation: Due to an unjustified precautionary attachment, the debtor may file a lawsuit for compensation for commercial losses and expenses incurred as a result of the ship being detained from navigation. If this lawsuit is won, the court rules that the compensation shall be covered from the collateral deposited by the creditor.

Risk of Insufficient Collateral: Especially for an asset with high operating costs and high potential for loss of earnings, such as a ship, the initial collateral determined by the court (e.g., 15%) may not be sufficient to cover the actual damage suffered by the debtor. In this case, the creditor remains personally liable with their assets for the damage exceeding the collateral. For the debtor, the risk is that the damage suffered cannot be covered by the collateral, and they have to go through a long litigation process to collect it from the creditor.

Conclusion

The depositing of collateral in the precautionary attachment of a ship is a critical legal mechanism that protects both the creditor and the debtor, as confirmed by judicial decisions, and is mandatory as a rule.

Mandatory Nature: It is a general rule for the creditor to deposit collateral against the possibility of being found unjustified. The debtor can also lift the attachment on the ship by depositing collateral.

Amount: The security amount can be determined at a rate varying between 10-25% of the claim or at a special amount, such as 10,000 SDR for maritime claims, and is at the discretion of the court.

Return: The security is returned upon the provisional attachment becoming final, the debtor’s consent, or the cessation of reasons requiring security, such as the debtor failing to file a compensation claim within a certain period despite the creditor being found unjustified.

Risks: The biggest risk for the creditor is, if they are found to be unjustified, the security being used to cover the debtor’s damages and even facing compensation exceeding these damages. For the debtor, the risk is the commercial losses they may incur due to an unjustified attachment.

In conclusion, it is of great importance that parties involved in the ship provisional attachment process carefully consider the amount, type, and potential consequences of the security, due to the legal complexities of the process. An article suggestion.

Why is Tuzla Lawyer Support Necessary?

Provisional attachment decisions for ships are not only about maritime law; they can also lead to complex consequences in terms of enforcement law, security regimes, and commercial law. If the ship is detained, commercial losses may occur, and if the security is incorrectly determined, the litigation process can lead to damages that are difficult to compensate for the parties.

Therefore, especially in regions with intense maritime activities like Tuzla, working with a Tuzla lawyer who can guide the process from start to finish is of great importance. For ships subject to preliminary attachment at Tuzla Port, the support of a Tuzla enforcement lawyer, maritime law lawyer, or commercial lawyer with local experience who can establish effective communication with both the Istanbul Anatolian Courthouse and enforcement offices will protect the rights of both the creditor and the debtor.

Furthermore, for companies operating ships in nearby locations such as Pendik, Kartal, Maltepe, Gebze, and Yalova, working with a lawyer specialized at the level of local courts and ports in such situations accelerates the process and minimizes risks.