Introduction

This study has been prepared to analyze the role, legal basis, and practical implications of security in the process of precautionary arrest of ships. Furthermore, the amount, refund, and risks of security in the precautionary arrest of ships will be addressed. Due to the nature of ship trade and maritime law, the detention of a ship from its voyage constitutes a strong guarantee for the creditor and a significant risk of economic loss for the debtor. To establish this balance, the Turkish Commercial Code (TTK) and relevant legislation regulate the requirement of security from both the creditor requesting precautionary arrest and the debtor wishing to release the arrested ship. The study will examine fundamental issues such as whether security is mandatory, how much should be deposited, when it will be refunded, and the risks of losing (or ‘burning’) the security, in light of the provided legal resources.

A. Creditor’s Obligation to Provide Security When Requesting Precautionary Arrest

It is mandatory for the creditor requesting a precautionary attachment to deposit security. This security aims to guarantee against potential damages the debtor might incur in case of an undue attachment.

Amount: The Turkish Commercial Code has determined a fixed (lump sum) amount for this security. Accordingly, “a creditor requesting a precautionary attachment decision to secure a maritime claim is, as a rule, obliged to provide security in the amount of 10,000 SDR [Special Drawing Rights].”

Practical Significance: Depositing this security has become a prerequisite for the court to examine the request on its merits. In summary, “for the court to open the file, it is necessary to determine that this security has been deposited.” If the security is not deposited, the request will be rejected.

Exception: There is an important exception to this obligation. “Seafarers’ claims, regulated in the paragraph of Article 1320 of the Law, are exempt from security.”

Increase in Security Amount: The initially deposited security of 10,000 SDR may not be sufficient to cover the debtor’s potential damages. In this case, the debtor can request the court to increase the security. “If the additional security is not deposited within the specified period, the precautionary attachment order will automatically be lifted.”

B. Debtor Depositing Security to Release the Attached Ship

This is not an obligation for the debtor, but a right they can use to return their ship to commercial activities. The debtor or shipowner can secure the ship’s release by providing security.

Amount: The amount of security to be provided depends on the claim and the ship’s value. “If the amount of the maritime claim exceeds the value of the ship, security shall be deposited up to the ship’s value; if it does not exceed, security shall be deposited up to the claim amount, and the provisional attachment on the ship shall be lifted and transferred to the security.“ Therefore, the security must cover the entire maritime claim, interest, and expenses, but in no case should it exceed the ship’s value.

Type of Security: The type of security to be provided by the debtor may vary depending on the method invoked. According to Article 1370 of the Turkish Commercial Code, for the mere release of the ship (without transferring the attachment to security), “cash covering the ship’s value; real estate pledge, ship mortgage, or a reputable bank guarantee acceptable by the enforcement officer” may be provided. However, for the complete lifting of the attachment and its conversion into security according to Article 1371 of the Turkish Commercial Code, “cash” or “easily convertible securities such as bank letters of guarantee” are preferred.

C. When Is the Security Refunded?

The refund of the security varies depending on which party deposited it and the course of the lawsuit.

Return of Security Deposited by the Creditor: If the creditor prevails in the lawsuit they filed and it is decided that the provisional attachment was justified, the security they deposited will be returned to them. There is no explicit regulation on this matter, but  “the provision of Article 392/2 of the HMK (Code of Civil Procedure) should be applied by analogy in this regard”.

Return of Security Deposited by the Debtor:

Winning the Lawsuit: If the debtor wins the lawsuit filed against them and it is proven that they are not indebted, the security they deposited will be fully returned to them.

Limitation of Liability (Fund Establishment): If the debtor establishes a liability limitation fund under the International Convention on Limitation of Liability for Maritime Claims (LLMC), they may request the return of the security previously deposited to release the ship.  “they cannot prevent the return of this security after the fund is established” 

Modification or Reduction of Security: If there is a valid reason, such as a decrease in the ship’s value, the debtor may request the return of a portion of the security.

D) Forfeiture of Security and Risks

The phrase “forfeiture of security” generally refers to the situation where the security deposited by the creditor is paid to the debtor as compensation due to an unlawful attachment.

Risks for the Creditor (Forfeiture of Security):

Wrongful Provisional Attachment: This is the biggest risk. If the creditor is found to be unjustified in their request for provisional attachment, they become responsible for all damages incurred by the debtor and third parties due to this. These damages include “daily operating expenses for the vessel during the period it was detained from its voyage due to the provisional attachment, and lost profits due to the provisional attachment.”

Action for Damages: The debtor can file an action for damages against the creditor for losses resulting from the wrongful attachment. If this lawsuit is won, the 10,000 ÖÇH collateral deposited by the creditor will be used to pay this compensation. If the damages exceed this amount, the creditor remains responsible with all their assets.

No Fault Requirement: “It is sufficient for there to be a causal link between the damage and the wrongful provisional attachment. Furthermore, it is not a requirement for the creditor requesting the provisional attachment to be at fault.” This situation is a factor that increases the risk for the creditor.

Risks for the Debtor:

The collateral deposited by the debtor to release the vessel is used to cover the debt if the lawsuit is lost. This situation is technically not a “burn” or a penalty, but the collection of the debt from the collateral.

Other Liens on Collateral: Risks vary depending on the method the debtor uses to release the vessel. According to Article 1370 of the TCC (release while ship arrest continues), other maritime creditors may also place a lien on this collateral (Aksoy, 2016). However, according to Article 1371 of the TCC (complete lifting of the arrest and conversion to security), “other maritime creditors cannot place a lien on the said collateral” (Aksoy, 2016). This creates a significant legal distinction for the debtor and the relevant creditor.

Protection of the Debtor: The mandatory and fixed collateral of 10,000 SDR (Special Drawing Rights) taken from the creditor potentially protects the debtor against unjust and arbitrary arrests. However, the authors have presented a critical perspective, stating that this fixed amount could be a deterrent for small claims or prove insufficient for highly valuable vessels.

Protection of the Creditor and Trade: Granting the debtor the right to release the vessel in exchange for security ensures that the vessel continues to generate economic value. This benefits not only the debtor but also third parties involved in commercial relationships, such as cargo and freight contracts.

Importance of the Legal Distinction (TCC Art. 1370 vs. 1371): The study clearly highlights the difference in outcomes between the two distinct legal avenues for the release of a vessel (TCC Art. 1370 and 1371). Under TCC Art. 1370, the arrest continues on the collateral “in unity of destiny” with the vessel and is open to participation by other creditors, whereas under TCC Art. 1371, the arrest is completely lifted from the vessel, assigned exclusively to the collateral, and closed to intervention by other creditors. This distinction represents a strategic decision point and directly affects the rights of the parties.

Conclusion

Requirement: Yes, it is mandatory for the creditor requesting a precautionary attachment order to deposit a security of 10,000 SDR (excluding seafarers’ claims). However, it is not an obligation for the debtor to deposit security to release the ship; it is a right.

Amount: The creditor’s security is fixed (10,000 SDR), whereas the debtor’s security is variable (up to the amount of the claim, but not exceeding the ship’s value).

Return: The security is returned when the reason for its retention ceases to exist. The creditor’s security can be returned when they win the case, and the debtor’s security when they win the case or establish an LLMC fund.

Risks and “Forfeiture”: The most significant risk of “forfeiture” is for the creditor. If the precautionary attachment is found to be wrongful, the security they deposited may be used as compensation for damages suffered by the debtor (e.g., loss of voyage, operating expenses). This applies regardless of whether the creditor is at fault.

In conclusion, the security system in Turkish maritime law has a detailed and multi-layered structure that aims to strike a delicate balance between the creditor’s right to secure their claim and the debtor’s right to property and freedom to continue their commercial activities. An article suggestion.

Why is Tuzla Lawyer Support Necessary?

Provisional attachment orders against ships can lead to multifaceted and complex consequences, not only for maritime trade but also from the perspective of enforcement law, security regimes, and commercial law. Once a ship is detained from voyage, significant commercial losses can arise in many aspects, from its cargo to freight, from contractual liabilities to operating expenses. Furthermore, an incorrect determination of the security amount can lead to both the prolongation of the process and financial damages that are difficult to compensate for the parties.

For this reason, especially in regions where maritime activities are concentrated, such as Tuzla, working with a Tuzla lawyer who can manage the process correctly from the outset is of great importance. Regarding ships subject to provisional attachment at Tuzla Port, a lawyer specializing in enforcement law, maritime law, or commercial law with local experience, who can establish effective communication between the Istanbul Anatolian Courthouse and the enforcement offices in Tuzla, both ensures the creditor secures their claim and protects the debtor’s property rights and commercial activities.

Furthermore, companies operating ships in port and industrial areas around Tuzla, such as Pendik, Kartal, Maltepe, Gebze, and Yalova, should seek support from a lawyer familiar with regional practice and judicial procedures during the provisional attachment process, which will ensure the process is concluded quickly and risks related to security are minimized.