1. The Concept of Freight and the Importance of Freight Contracts in Maritime Trade

Freight refers to the fee paid for the sea transport of cargo. The determination and payment of this fee are guaranteed by “freight contracts”, which are among the fundamental contract types of maritime trade. From Article 1138 of the Turkish Commercial Code (TCC) onwards, the establishment, scope, and obligations of the parties to a freight contract are detailed.

2. Definition and Legal Nature of the Freight Contract

A freight contract is defined in the Turkish Commercial Code as an agreement where the carrier undertakes to transport cargo by sea to a specific destination in return for a freight fee (TCC, Art. 1138). Under Turkish law, a freight contract is considered a transportation contract and, at the same time, a debt contract within the framework of the Code of Obligations. In this context, a freight contract is an agreement that creates mutual rights and obligations between the parties, where the carrier assumes the responsibility of safely transporting the cargo and delivering it to the destination, and the consignor bears the obligation to pay the freight fee.

The legal structure of the freight contract is important in terms of clearly defining the parties’ performance obligations and responsibilities. In such contracts, the rights and obligations of the carrier and the consignor are detailed by law, and they are regulated to ensure that maritime transport is carried out safely, orderly, and in accordance with the contract.

3. Parties and Interested Persons of the Freight Contract

Carrier: It is the party that undertakes to transport goods by sea in a freight contract. The carrier is responsible for safely delivering the cargo to the specified destination and is obligated to ensure that the ship is seaworthy, roadworthy, and cargoworthy. These obligations are among the carrier’s fundamental responsibilities in the freight contract

Contracting Shipper: This is the person who concludes a freight contract with the carrier, or on whose behalf and account a freight contract is concluded. They undertake to pay freight in exchange for the sea transport of goods. The contracting shipper may also act as the consignor. However, this is not mandatory. As the party requesting transport, the contracting shipper expects the carrier to fulfill its transport obligations and assumes the responsibility of paying the freight charge.

Consignor: The consignor is the person who brings or delivers the goods to be transported under the freight contract to the ship. The consignor bears responsibilities such as delivering the cargo to the carrier and providing accurate information. This person can also be the contracting shipper, but can also act as a different person from the contracting shipper.

Shipowner: The person who uses their ship in maritime transport activities is called the shipowner. If the shipowner directly undertakes the business of transporting goods by sea without transferring their ship to another party or assigning it for another purpose, they also acquire the status of “carrier”. Thus, the shipowner carries out the cargo transport activity themselves without transferring the operation of their ship, and acts as the carrier in the freight contract.

Ship Operating Contractor: A ship operating contractor is a person who operates a vessel not owned by them, in their own name, within the scope of maritime trade. This person can operate the vessel directly or through its captain. In their legal relations with third parties, a ship operating contractor is regarded as a shipowner and can act as a shipowner in a freight contract by virtue of their authority to operate the vessel.

Consignee: The consignee is the person who has the right to take delivery of the transported cargo in their own name at the port of destination. Upon taking delivery of the cargo, the consignee is obligated to pay the freight and associated costs, demurrage charges, and all other expenses required by the delivery procedures. Furthermore, they must bear customs duties, official fees, and other expenses paid on their behalf relating to the delivered cargo. These responsibilities of the consignee are determined according to the provisions of the freight contract or bill of lading upon which the delivery is based.

Broker: A broker is a person who brings together parties such as the carrier and the shipper during the establishment of a freight contract, acting as an intermediary for this transaction. Brokers are responsible for facilitating communication between the carrier and the shipper, negotiating contract terms, and ensuring that a suitable agreement is reached by considering the interests of both parties. The broker’s role involves mediating the clarification of all details between the parties, such as freight charges, the quantity of cargo to be transported, and transportation conditions. Upon the signing of the contract and the parties reaching an agreement, the broker receives a specific commission in exchange for their service. This commission is typically calculated as a certain percentage of the freight charge, and it is a common practice for brokers to receive commission from both parties to ensure impartial service.

4. Types of Freight Contract

a) Voyage Charter Contract:

A voyage charter contract, regulated under Article 1138 of the Turkish Commercial Code, is a freight contract where the carrier allocates the entire vessel, a part of it, or a specific section thereof to the charterer, undertaking the obligation to transport cargo for a specific voyage or trip. In a voyage charter, the carrier is responsible for delivering the cargo to the designated destination, and the freight rate is determined per voyage. In such contracts, the vessel is allocated solely for a specific trip. (TCC, art. 1138/1-a) A voyage charter contract is formalized in writing with a charter party that specifies the terms of the contract and includes the rights and obligations of both the carrier and the charterer. The drafting of this party is possible provided that the parties mutually agree and cover the expenses (TCC, art. 1139)

b) Space Charter Contract

Unlike a voyage charter, a space charter contract is a freight contract made for the purpose of chartering not the entire vessel, but only a specific part of it or a cargo carrying space. In a space charter contract, the charterer has their cargo transported in exchange for a specific allocated space or capacity on the vessel. In such contracts, the carrier ensures the transportation of the cargo within the allocated cargo space and undertakes safe delivery to the destination. A space charter contract offers a flexible solution for charterers who wish to use a portion of the vessel, and it is generally preferred for smaller cargo shipments. (TCC, art. 1138/1-b).

c) Differences Between Voyage Charter and Space Charter Contract

Ship Usage: In a voyage charter, the entire ship or a significant portion of it is allocated, whereas in a space charter, only a specific cargo area is reserved.

Determination of Freight Cost: In a voyage charter, the freight cost is determined per voyage, whereas in a space charter, it is determined based on the allocated cargo area or quantity of cargo.

Purpose of Use: A voyage charter is generally used for voyages involving large cargo volumes and a single shipper, while a space charter is preferred in situations with multiple shippers carrying smaller quantities of cargo.

5. Formation and Form of the Freight Contract

Although freight contracts can essentially be made verbally, in practice, making them in written form provides an advantage for proof. In written contracts, the terms and rights between the parties are specified in detail, which facilitates claiming rights based on documents in case of disputes. Written freight contracts are preferred, especially for large-volume cargo transports or transports requiring special conditions.

Voyage charter party, is a written document that can be drawn up at the request of one of the parties in freight contracts made between the carrier and the charterer. According to Article 1139 of the Turkish Commercial Code, when a voyage charter contract is established, each of the parties, provided that they cover the costs, may request the drawing up of a voyage charter party containing the terms of the contract and its delivery to them (TCC, Art. 1139). The voyage charter party is important for the parties to formalize the terms of their agreement in writing and is used as a document of proof. This document, rather than being a document of title, is a means of proof defining the rights and obligations of the parties.

Apart from the voyage charter party, another important document issued during the carriage operation is the bill of lading. The bill of lading is issued by the carrier after the cargo is loaded onto the ship and is a document of title capable of representing the cargo. While the relationship between the carrier and the charterer is based on the provisions of the freight contract, the relationship between the carrier and the bill of lading holder is subject to the provisions of the bill of lading. If any term from the voyage charter party is mentioned in the bill of lading, for this term to be accepted by the bill of lading holder, a copy of the charter party must be given to the holder when the bill of lading is transferred.

In a space charter agreement, as in a voyage charter, there is no right to demand the drawing up of a document specifying special conditions between the parties to the contract. However, upon the shipper’s request, the carrier is obliged to issue and provide a bill of lading during the loading operation. This bill of lading regulates the relationship between the carrier and the consignee, and is also important for proving the content of the space charter agreement. Although space charter agreements do not involve a contract as detailed as a voyage charter, issuing a bill of lading to document the nature of the carriage and the rights of the parties is common practice.

The conclusion of freight contracts in written form is important, especially within the scope of the ‘obligation to prove with a document’ stipulated in the HMK (Civil Procedure Code). Verbal agreements not based on a written document can create problems in terms of proof in case of a dispute. Therefore, in practice, the agreement of the parties is recorded using documents such as written freight contracts and voyage charter parties.

6. Essential and Subsidiary Elements to be Included in a Freight Contract

a) Essential Elements(Essential Terms)

Identity Information of the Parties: The names, addresses, and contact information of the carrier and the shipper must be specified. For the contract terms to be clear between the parties, their full identities must be written. This is important for the legal validity of the contract.

Vessel Description and Features: The name, flag, capacity, class, age, technical, and physical characteristics of the vessel performing the transport must be specified in detail. Specifying the vessel’s cargo carrying capacity (dwt) and draft depth is important to ensure the safe transport of the cargo.

Quantity and Type of Cargo to be Transported: The quantity, type, characteristics, and, if necessary, packaging of the cargo subject to transport must be specified. For example, the nature of the cargo, such as bulk cargo or container transport, may affect the determination of the freight. (Turkish Commercial Code art. 1195/1).

Loading and Unloading Ports and Times: The loading and unloading ports and the anticipated dates for these operations must be clearly stated. In case of potential delays at the port, the loading and unloading times and the demurrage period must also be specified separately.

Freight Rate Determination Method and Payment Method: Quantity-Based Freight: It can be determined based on the quantity of cargo to be transported (by tonnage, measurement, or number). For example, freight can be calculated per specific tonnage or per container.  Lump Sum Rate: A fixed fee can be determined independently of the cargo quantity, thereby fixing the total freight amount regardless of the quantity of goods. This is generally used when the exact quantity of the cargo cannot be determined in advance (Turkish Commercial Code, Article 1195/1). Time-Based Freight: If the carriage is carried out on a time basis, freight can be calculated over a specific period, and freight begins to accrue from the start date of the loading or unloading operation (Turkish Commercial Code, Article 1194/1). Additionally, details such as payment terms and duration, and the interest rate to be applied in case of delay, should also be specified.

Time of Freight Payment; As a general rule, unless otherwise agreed by the parties, the freight claim becomes due at the moment the goods are requested for delivery and, in any case, at the end of the discharge period (TCC art. 1197). The  parties may determine the time of freight payment in different ways. For example, advance payment at the loading port: It may be agreed that advance payment is made in such a way that the freight is earned when the goods are loaded onto the vessel. In this case, the freight becomes due upon the loading of the goods onto the vessel. Payment at the port of discharge: The parties may agree that the freight will be paid at the port of discharge, upon delivery of the goods. Alternative Times for Advance Payment: Advance payment can also be agreed upon for a more specific timeframe in the contract. For example, any of the stages such as “loading of the goods onto the vessel”, “signing of the bill of lading by the carrier”, or “receipt of the goods” can be determined as the moment of advance payment. Deferred Payment Options: Deferring the payment date to a later date can also be an option specified in the contract. For example, a provision such as payment being made 5 days after the signing of the bill of lading can be added.

Method of Freight Payment: Freight payment can be made in different ways such as bank transfer, cash, or check. The parties may add specific arrangements regarding the method of payment to the contract.

Voyage Expenses: It should be specified who will cover the vessel’s operating expenses (fuel, provisions, crew salaries), canal and port fees, and pilotage fees incurred during the voyage. Unless otherwise agreed by the parties, voyage expenses are generally borne by the carrier (Turkish Commercial Code, Article 1196/2).

Loading and Unloading Costs: Whether the carrier or the shipper is responsible for these costs is determined by the contract terms. If a FIOST (Free In/Out Stowed Trimmed) clause is present, loading and unloading costs will be paid by the shipper. If the carrier is responsible for these costs, the freight rate should be determined to include these costs.

Additional Charges and Demurrage: The demurrage fee to be paid if loading and unloading operations exceed the specified time should be stated. This fee covers the additional costs incurred by the carrier. Once the demurrage period begins, time-based freight will not apply (Turkish Commercial Code, Article 1194/2).

Additional Risks such as War, Ice, and Port Congestion: It should be specified who will cover additional costs arising from unforeseen circumstances such as war or port congestion. Especially in transport to hazardous areas, it is common to stipulate an additional fee (War Risk Surcharge) due to war risk. Similarly, a Port Congestion Surcharge may be applied for costs arising from port congestion.

Insurance Costs: The types and scope of insurance undertaken by the carrier, and whether they are included in the freight cost, must be specified. Especially for war risk, cold chain products, or dangerous goods, the carrier’s additional insurance requirements may be considered. The fundamental elements that must be agreed upon for a charter party to be validly established are:

Geographical Limits of Carriage and Authority for Port Change: The ports between which the vessel will operate must be specified. If the carrier has the authority to change ports, the scope and limits of this authority must also be included in the contract.

Carrier’s Responsibilities and Warranty Conditions: The carrier’s obligations to ensure the vessel’s seaworthiness and readiness for voyage, and to present the vessel in a clean and safe condition, must be specified. Additionally, matters such as a guarantee to repair or replace the vessel in case of any malfunction may also be included.

b) Ancillary Elements (Additional Terms) and Special Clauses

Fuel Adjustment Factor (BAF) and Currency Adjustment Factor (CAF): To mitigate the effects of fluctuations in fuel prices and exchange rates, the contract may include the application of a fuel adjustment factor (Bunker Adjustment Factor – BAF) and a currency adjustment factor (Currency Adjustment Factor – CAF).

Customary Freight: If the freight amount is not explicitly stated in the contract, the parties shall pay according to the customary (prevailing) freight at the place and time of loading. Factors such as the type of cargo, distance to be transported, mode of transport, age of the vessel, its speed, technical equipment, and seasonal conditions are taken into account for determining customary freight (Turkish Commercial Code, Article 1195/1).

Broker Commission: If the contract is made through a broker, the broker’s fee and its payment method must be specified. Broker commission is usually calculated as a certain percentage of the freight cost.

Demurrage and Despatch Money (Despatch): The demurrage fee to be paid when the laytime is exceeded, and the despatch money to be paid when loading or unloading is completed in less than the laytime, must be specified.

Loss, Delay and Force Majeure Clauses: It is specified how the contract will operate in cases of force majeure (e.g., war, strike, natural disaster). These clauses are important for regulating the parties’ responsibilities and claims for loss or damage.

Trading Limits: The geographical limits within which the carrier can use the vessel must be specified. These limits, referred to as “Trading Limits”, determine the regions in which the vessel can operate.

Off-Hire Clause: In cases where the vessel becomes unusable (e.g., engine breakdown, crew strike, etc.), the periods during which the charterer is exempt from paying freight are regulated by the off-hire clause.

6. Responsibilities of the Carrier

a) Sound Delivery of Cargo

The carrier is obliged to deliver the cargo safely while fulfilling the obligations undertaken under the contract of carriage. In this context, the carrier may be held responsible for losses, damages, or delays in delivery of the goods. This liability applies to losses, damages, or delays occurring while the goods are under the carrier’s control. The carrier’s control covers the period from the moment the cargo is received from the consignor until it is delivered to the consignee or legally authorized authorities (TCC, Art. 1178/1-3) b)

The carrier is obliged to deliver the cargo within the period specified in the contract of carriage or within a reasonable period. If the delivery period is not explicitly determined, the carrier must deliver the cargo within the reasonable period expected from a prudent carrier. If this period passes and the cargo is not delivered within sixty consecutive days, the cargo is presumed to be lost. In case of delay, the carrier is obliged to compensate for the damages suffered by the cargo due to the delay (TCC, Art. 1178/4-5).

b) Seaworthiness and Roadworthiness of the Vessel:

The carrier is obliged to ensure that the vessel is seaworthy and fit for the voyage; this includes the complete preparation of the vessel before loading and ensuring the necessary conditions for the journey. If these conditions are not met, the carrier is held liable (TCC, Art. 1141).

c) Duty of Care and Diligence

The carrier is responsible for exercising the care and diligence expected of a prudent carrier in the loading, stowage, handling, carriage, protection, supervision, and discharge of the goods. This means that the carrier must exercise maximum care at every stage of the process, from loading to discharge (TCC, Art. 1178/1). Furthermore, unless the parties agree otherwise in the contract, the carrier’s obligation to protect and ensure the safety of the goods continues from the moment of loading.

The carrier is responsible for any loss, damage, or delay that may occur to the cargo during carriage. This liability covers the period of carriage “port to port” while the cargo is under the carrier’s control, and the delivery period and cargo safety are entrusted to the carrier’s care (TCC, Art. 1178/2).

7. Cases of Carrier’s Exemption from Liability

a) Reasons Not Attributable to the Carrier

The carrier is not liable for damages arising from reasons not caused by their own fault or negligence. For the carrier to be exempt from liability here, they must prove that the damage occurred outside the intent or negligence of the carrier or their agents. Here, the burden of proof lies with the carrier. The term “agents” of the carrier includes the ship’s crew, persons working in the transport enterprise or representing the carrier, and other third parties involved by the carrier in the performance of the contract. However, provisions related to the actual carrier are reserved within this scope. While this provision allows the carrier to be exempt from liability for events occurring outside the actions of their agents, the carrier’s liability continues for damages resulting from the actions or omissions of their agents (TCC, Art. 1179).

b) Technical Defect and Fire Reasons

Article 1180 of the Turkish Commercial Code offers a special regulation that limits the carrier’s liability to damages related to the navigation, technical management, or fire of the vessel. This regulation stipulates that the carrier shall be held liable only for damages arising from their own fault. This provision limits the carrier’s liability for certain events in maritime transport that cannot be directly attributed to the carrier’s fault, and allows for a distinction regarding the source of damages.

Damages related to the navigation or technical management of the vessel typically arise from the vessel’s navigation, maintenance, repair, or other operational activities. In such cases, the carrier can only be held liable for faults arising from the technical management of the vessel. However, measures taken for the protection of the cargo are not included within the scope of the vessel’s technical management. For example, if a vessel deviates from its course due to a malfunction in the steering system caused by wind after departing from port, and the cargo is damaged, this damage may have resulted from a technical fault. If the malfunction is due to a lack of regular maintenance, the carrier will be held responsible. However, if the captain on board decides to wait in another port to protect the cargo, and a portion of the cargo is damaged during this waiting period, this situation is considered outside the scope of the carrier’s liability (TCC, art. 1180).

In case of fire, the carrier is held responsible only if the fire originated from their own fault. If it is proven that the fire was caused by an external factor (for example, a spark jumping from another ship), the carrier will not be liable for this damage. For instance, if a fire breaks out due to an electrical malfunction in the ship’s engine room and it is proven that this malfunction resulted from a lack of regular maintenance, the carrier’s liability arises. However, if cargo is damaged due to a fire that started due to an external impact while the ship was underway, and it is demonstrated that the carrier was not at fault in this situation, the carrier is exempted from liability.

The second paragraph of Article 1180 establishes a presumption that the damage did not arise from technical management. According to this presumption, the carrier assumes that the damage is not related to a technical fault, and it is the shipper’s responsibility to disprove this. For example, if cargo on a ship is damaged by shifting from its position on deck due to rough seas, and it is claimed that this resulted from the ship’s technical management, the shipper must prove this connection.

In particular, measures taken for the purpose of protecting the cargo have been excluded from the scope of technical management. These measures are based on the carrier’s obligation to protect the cargo, and in such cases, the carrier may be exempted from liability as they acted to protect the cargo. For instance, if due to adverse weather conditions, the captain delays the ship at sea for some time to protect the cargo, and some cargo is damaged during this period, this situation falls outside the carrier’s liability.

c) Salvage and Attempted Salvage Damages at Sea

The carrier shall not be held liable for damages arising from the salvage or attempted salvage of life or property at sea, except in cases of general average. The fundamental condition here is that if the salvage attempt is solely for the purpose of saving property, it must also be within a reasonable course of action. The carrier’s exemption from liability in this context serves as an incentive for salvage operations aimed at persons or property in distress at sea (Turkish Commercial Code, Art. 1181). For instance, the ship’s captain, along with the crew, endeavors to rescue people from a sinking passenger ship. During this operation, some cargo on board is thrown overboard either to accommodate rescue equipment or for safety reasons. In this scenario, the carrier cannot be held liable for damages resulting from these activities undertaken to save human lives. This is because saving lives at sea is a mandatory activity under international maritime law, and the carrier cannot be expected to incur losses as a result.

8. Carrier’s Presumption of Faultlessness and Appropriate Causal Link

a) Presumption of Faultlessness (Cases of Faultlessness)

Situations have been defined in which the carrier may be deemed faultless in the occurrence of damage under the contract of carriage. If these situations arise from damages specific to the inherent risks of carriage, the carrier and its agents cannot be held liable. Pursuant to Article 1182 of the Turkish Commercial Code (TCC), the following situations establish the carrier’s faultlessness:

Dangers and Accidents in Seas and Other Waterways (TCC, art. 1182/1-a): Maritime transport is an activity that carries its own unique risks. In this context, the carrier cannot be held responsible for damages caused by natural dangers or unexpected accidents encountered in seas or other waterways suitable for the operation of the vessel. For example, the carrier cannot be held responsible for damages to cargo resulting from the ship being damaged due to sudden storms, which are natural risks of maritime transport, or striking uncharted underwater rocks.

Acts of War, Insurrections, Actions of Public Enemies (TCC, art. 1182/1-b): The carrier is not responsible for damages caused by war, civil unrest, insurrections, or actions of public enemies. Such extraordinary circumstances occur beyond the carrier’s control, and the carrier’s fault is not sought in damages arising from these causes. For example, the carrier cannot be held responsible for damages to cargo resulting from a ship sailing in war or civil unrest zones striking a naval mine or being attacked by armed rebel groups, because these situations are risks beyond the carrier’s control.

Orders of Competent Authorities or Quarantine Restrictions (TCC, art. 1182/1-b): Damages caused by orders of state or local authorities, legal restrictions, or quarantine measures are also outside the carrier’s responsibility. The carrier cannot be held responsible for delays or damages arising from such legal obligations. For example, the carrier cannot be held responsible for delays or spoilage of cargo resulting from mandatory quarantine measures applied in port due to an epidemic, or the seizure of certain goods by competent authorities. This is because these situations are legal obligations beyond the carrier’s control.

Court Seizure Orders (TCC, art. 1182/1-c): If the transported goods are seized by a court order, the carrier cannot be held responsible for damages arising from this reason. Court intervention is considered a factor beyond the carrier’s control.

Strikes, Lockouts or Other Labor Obstacles (TCC, art. 1182/1-d): Damages arising from strikes, lockouts, or similar work stoppages occurring in the business world are not the responsibility of the carrier. These types of labor obstacles are situations beyond the carrier’s control.

Acts and Omissions of the Consignor or Cargo Owner (TCC, art. 1182/1-e): Damages resulting from the willful or negligent acts of the consignor, cargo owner, or their representatives are not the responsibility of the carrier. For example, if the consignor gives incorrect loading instructions to the carrier, and as a result, the cargo on the ship is placed unevenly. Consequently, the ship sustains damage in rough seas during transit. In this situation, since the incorrect instructions are the fault of the consignor, the carrier cannot be held responsible.

Degradation, Shortage, or Hidden Defects Due to the Nature of the Goods (TCC, art. 1182/1-f): Damages arising from the degradation, shortage, or hidden defects of the transported goods due to their inherent natural characteristics are outside the carrier’s liability. For example, in cases where organic fruits and vegetables naturally spoil during long transit periods, or chemical substances undergo natural evaporation or volume loss during transport, the carrier cannot be held responsible for these natural shortages. Similarly, a decrease in the weight of goods like tobacco, cotton, or grain due to moisture loss during transport. For instance, 100 tons of corn loaded might be weighed as 98 tons at the destination. Since this loss stems from the inherent natural characteristics of the goods, the carrier cannot be held liable.

Insufficiency of Packaging and Markings (TCC, art. 1182/1-g, h): The carrier cannot be held responsible for damages arising from the goods not being sufficiently packaged or not being equipped with the necessary markings during transport. Here, the failure of the consignor to fulfill their obligations is taken into account.

Exception: However, if a fault or negligence on the part of the carrier caused these reasons to occur, the carrier cannot be relieved of liability (TCC, art. 1182/2). Furthermore, if the damage appears to have resulted from the aforementioned reasons, the carrier’s blamelessness is presumed; however, this presumption can be rebutted (TCC, art. 1182/3).

b) Case of Concurrence of Causes

If the carrier’s fault or the fault of its employees combines with another cause to result in damage, the carrier is held liable only for damages attributable to its own fault. For example, if damage occurred due to the carrier’s negligence, but an external factor contributed to the escalation of this damage, the carrier is obligated to compensate only for the portion arising from its own negligence. (TCC, Art. 1183) However, if the carrier proves that a portion of the damages did not stem from its own fault, it can be relieved of liability for that portion. Nevertheless, the carrier must prove this situation.

9. Limitation of Carrier’s Liability

a) General Limits of Liability

The carrier’s liability for loss or damage to goods during carriage is limited by specific limits. The carrier can be held liable up to the higher of these limits. These limits are: 666.67 Special Drawing Rights per package or unit, or 2 Special Drawing Rights per kilogram of the gross weight of the goods lost or damaged (TCC, Art. 1186/1).

The Special Drawing Right is converted into Turkish Lira at the exchange rate determined by the Central Bank of the Republic of Turkey on the date of payment or another date agreed upon by the parties. If the nature and value of the goods have been declared by the consignor before loading and noted in the bill of lading, these limitations do not apply (TCC, Art. 1186/1).

The compensation to be paid by the carrier is calculated based on the value of the goods at the place and date of discharge, in accordance with the freight contract. This value is determined by the stock exchange price or market price. If this information is unavailable, it is calculated based on the ordinary value of goods of similar nature and quality (TCC, Art. 1186/2).

b) Value of Goods within Containers or Pallets

If goods are placed collectively in a transport unit such as a container or pallet, each package or unit is counted separately if it is written separately on the bill of lading. If there is no such record, the entire transport unit is considered a single package. However, if the transport unit is damaged and this unit was not provided by the carrier, this unit is also considered a separate package. (Turkish Commercial Code, Article 1186/3)

c) Case of Misleading Declaration

If the consignor intentionally misrepresents the type or value of the goods, the carrier cannot be held liable for any loss or damage in this situation. A misleading declaration completely eliminates the carrier’s liability. (Turkish Commercial Code, Article 1186/5)

d) Limit of Liability in Case of Delay

For damages arising from exceeding the transport period, the carrier is held liable for a maximum of two and a half times the freight payable for the delayed goods. However, this amount cannot exceed the total freight amount payable according to the freight contract. (Turkish Commercial Code, Article 1186/6)

e) Combined Application Scenario

If the carrier’s liability covers both the loss of goods and the exceeding of the transport period, the total liability amount cannot exceed the amount payable in case of total loss of the goods. (Turkish Commercial Code, Article 1186/7)

f) Determination of Limits by Agreement of the Parties

The parties may agree to increase the carrier’s liability limits to higher amounts. However, the determined limits cannot be lower than the minimum limits stipulated by law. (Turkish Commercial Code, Article 1186/8)

g) Loss of the Right to Limit Liability

Case of Intentional or Reckless Conduct: If the loss or delay in delivery is caused by the carrier’s intentional or reckless conduct, and the carrier knows that this conduct will cause loss or delay, the carrier cannot benefit from the limits of liability (TCC, art. 1187/1).

Liability of the Carrier’s Personnel : If the loss or delay is caused by the intentional or reckless conduct of the carrier’s personnel, the carrier’s personnel also cannot benefit from the limits of liability. In this case, the carrier’s personnel are held equally liable. (TCC, art. 1187/2)

10. Inspection and Notification Obligations

a) Consignee’s Right of Inspection

The consignee (receiver) may request an inspection to ascertain the condition, quantity, dimensions, and weight of the goods before taking delivery. This inspection process can be requested by the carrier, the master, or the consignee and is carried out through the court, other competent authorities, or expert witnesses (TCC, art. 1184/1). The inspection is important for the consignee to determine in advance whether there is any damage or loss to the goods.

During the inspection, other parties should be present if possible. This increases the impartiality and accuracy of the inspection (TCC, art. 1184/1). For instance, if a dispute arises regarding the condition of the cargo, the likelihood of contesting the outcome is reduced since both parties have participated in the process.

The costs of inspection normally belong to the party requesting the inspection. However, if damage to the cargo is detected as a result of the inspection and it is determined that this damage is the carrier’s responsibility, the carrier shall bear the inspection costs (TTK, art. 1184/2).

b) Notification Obligation

If loss or damage has occurred to the cargo, this situation must be reported to the carrier in writing at the latest upon delivery of the goods to the consignee. If the loss or damage is not immediately apparent from the outside, it is sufficient for the consignee to notify the carrier in writing within three days, calculated continuously from the delivery of the goods (TTK, art. 1185/1). The notification should generally state what the damage is, but a detailed explanation is not mandatory. This notification constitutes important evidence for the consignee to claim damages if the carrier claims that the goods were not damaged during transit.

If the condition of the goods has been determined by an official inspection carried out by a court or competent authority with the participation of the parties, no separate written notification is required (TTK, art. 1185/2). This situation eliminates the notification obligation in cases where the carrier’s responsibility is officially documented.

In the event of actual or probable loss or damage, both the carrier and the consignee are obliged to provide each other with the necessary facilities to determine the condition of the goods and the number of packages (TTK, art. 1185/3). This is to ensure that the inspection process is completed impartially and quickly.

If the shipper has made a declaration regarding the type and quality of the goods and this declaration has been written on the bill of lading, these entries constitute a presumption in favor of the shipper. However, this presumption is not binding on the carrier. That is, the carrier can prove the contrary of this presumption and object to the shipper’s declaration. In this context, these entries written on the bill of lading cannot be considered binding entries under Article 1239, third paragraph of the TCC (TCC, Art. 1182/4).

For example, if the shipper has incorrectly declared the weight or type of the goods carried, and this entry is written on the bill of lading, this declaration is presumed to be correct. However, the carrier can refute this presumption by proving that the actual weight or type of the goods is different. In this case, the carrier can be released from liability by proving that the shipper made an incorrect declaration.

c) Notification of Delay in Delivery

If a delay in delivery has occurred, the consignee must notify the carrier in writing within sixty days calculated continuously from the date the goods were delivered to them (TCC, Art. 1185/5). If no notification is made within this period, compensation for damages arising from the delay cannot be claimed. This provision has been introduced to clarify the carrier’s liability and to ensure that the carrier is informed in a timely manner to remedy damages.

d) Notification to the Actual Carrier

If the cargo has been delivered by the actual carrier (the person or entity actually performing the carriage), every notification made by the consignor is deemed to have been made to the carrier (Turkish Commercial Code, Art. 1185/6). Likewise, every notification made to the carrier is deemed to have been made to the actual carrier. This provision ensures that notifications are effective in cases where carriage is carried out by different parties.

Notifications made to persons acting on behalf of the carrier, such as the captain or ship’s officers (e.g., the responsible ship’s officer), are also deemed to have been made to the carrier. Thus, notifications made not only to the carrier itself but also to persons acting on its behalf are considered valid (Turkish Commercial Code, Art. 1185/6). For example, if the consignor notices damage to the cargo and notifies the captain or the actual carrier, this notification is also considered valid for the carrier. In this way, no loss of rights occurs when determining the carrier’s liability.

11. Obligations of the Shipper

a) Obligation to Pay Freight

aa. Obligation to Pay Freight According to Measure, Weight, or Number

If the freight is agreed upon based on the measure, weight, or number of the goods, the shipper is obliged to pay based on the quantity delivered at the port (Turkish Commercial Code, Art. 1193/1). For example, if the shipper has agreed to transport 10 tons of steel, they must pay according to the weight of the steel delivered completely at the port of delivery. However, if the delivered quantity is less than agreed, payment is made only for the quantity delivered.

bb. Obligation to Pay Freight Agreed Upon Time

When freight is agreed upon based on a specific period, the shipper is obliged to pay in the following cases:

If loading is agreed to start on a specific day, freight begins to accrue from that day. For example, if the charterer has agreed for loading to start on December 1st, freight payment begins from that date (Turkish Commercial Code, art. 1194/1).

If the loading date is not specified, freight payment begins from the day following the date on which the carrier gives notice of readiness (Turkish Commercial Code, art. 1194/1).

If the vessel departs empty (in ballast), freight accrues from the date the carrier notifies that the journey is ready (Turkish Commercial Code, art. 1194/1).

If a demurrage period has been agreed upon, during this period, while the charterer pays the demurrage fee, the time-based freight that has been agreed upon does not accrue (Turkish Commercial Code, art. 1194/2).

After unloading is completed, the agreed time-based freight ceases. For example, once the cargo is unloaded, the charterer is no longer obliged to pay time-based freight (Turkish Commercial Code, art. 1194/3).

If the voyage is interrupted or delayed without the carrier’s fault, the charterer is obliged to pay freight for the intervening days as well. For example, if waiting in a port becomes necessary, the charterer must also make payment for this period (Turkish Commercial Code, art. 1194/4).

cc. Payment Obligation if Freight is Not Determined

If the amount of freight has not been agreed upon in advance, the charterer is obliged to pay freight according to the market rates applicable at the place and time of loading (Turkish Commercial Code, art. 1195/1). Furthermore, if the charterer causes more cargo to be carried than the agreed amount, additional freight will be required for the excess cargo carried. The amount of additional freight to be paid is calculated by proportioning the price specified in the contract to the excess cargo (Turkish Commercial Code, art. 1195/2).

dd. Payment of Premiums and Expenses Other Than Freight

The shipper is not obliged to make any payment other than freight. However, expenses such as the vessel’s running costs, pilotage fees, and port taxes are the responsibility of the carrier (TCC, art. 1196/2). For example, when the carrier receives mandatory pilotage services in port, they must pay for these services. However, expenses incurred in a situation of general average are not included in this scope (TCC, art. 1196/3).

dd. Time of Freight Payment (Maturity)

Freight is payable upon demand for the delivery of the goods and, in any case, at the end of the discharge period (TCC, art. 1197/1). For example, the shipper must pay the freight debt when taking delivery of the cargo at the port of discharge.

ee. Goods Not Being Abandoned in Lieu of Freight

The carrier may refuse to accept damaged or spoiled goods in lieu of the freight amount (TCC, art. 1198/1). This means the shipper cannot pay the freight debt by abandoning the goods. For example, even if spoiled food products are delivered, the shipper must pay the freight amount in money.

ff. Payment Obligation in the Event of Loss of Goods

If the goods are completely lost during the voyage, the shipper is not obliged to pay freight for these goods; if freight has been paid in advance, it can be recovered (TCC, art. 1199/1).

If a lump sum freight contract has been made and a portion of the goods has been lost, the shipper only pays freight for the part that was not lost (TCC, art. 1199/1).

For goods that suffer damage due to natural causes (e.g., spoilage of organic products or natural evaporation of chemical substances), the shipper must pay the freight, even if the goods are not delivered (TCC, art. 1199/2). For example, even if organic fruits spoil during transport, the shipper must pay the freight. Similarly, if there is a reduction due to the natural evaporation of chemical products, the freight must still be paid.

The debtor of the freight is primarily the shipper (TCC, art. 1200/1). The shipper is responsible for fulfilling the obligation to pay the freight during the transportation process. This requires the full payment of the amount to which the carrier is entitled in return for the transportation service.

b) Delivery and Packaging of Goods

aa. Delivery of Goods Different from Agreed

If the shipper wishes to transport a different cargo for the same port of destination instead of the cargo specified in the transport contract, the carrier is obliged to accept this change. However, this change should not make the carrier’s work more difficult. If the cargo to be transported is individually specified in the contract, the shipper cannot send a different cargo (TCC, art. 1144).

For example, if the shipper initially requested cement transportation but then wishes to change it to bricks before transport, the carrier must accept this, provided that the change does not create an additional difficulty for the carrier. However, if the cargo is clearly specified in the contract, such as “special products from company A in a batch,” no change can be made.

bb. Obligation to Make a True and Complete Declaration Regarding the Cargo

The shipper and consignor must make a full and accurate declaration to the carrier regarding the cargo to be transported (TCC, art. 1145/1). If the declaration is false or incomplete, the shipper is liable for any damages that may arise. For example, if the shipper fails to declare that the cargo being transported is a chemical substance, and these chemicals react during transport causing damage, the shipper is obligated to cover this damage.

cc. Unlawful Cargo and Loading Situations

The shipper cannot load contraband of war or goods prohibited from import, export, or transit onto the ship. Furthermore, if the shipper acts contrary to tax, customs, or other legislation during loading, they will be liable to the carrier and other persons (TCC, art. 1146). The captain’s approval of this situation does not relieve the shipper of their responsibility. For example, if the shipper loads smuggled cigarettes and this is discovered by customs authorities, the shipper is obliged to cover all penalties and damages arising from this. Moreover, even if these goods are seized, the shipper cannot evade paying the freight.

dd.  Goods Loaded Secretly

A shipper who secretly loads goods onto the ship without the captain’s knowledge is liable for damages arising from these goods (TCC, art. 1147). The captain may unload such secretly loaded goods or throw them overboard if they endanger the ship. Furthermore, if the captain keeps the goods on board, the highest freight rate charged for such a voyage and goods at the loading place and time must be paid.

ee. Declaration of Dangerous Goods

Fully informing the carrier and the captain about goods considered dangerous in sea transport is one of the shipper’s primary obligations. If the consignor or shipper fails to inform the captain about the dangerous nature and characteristics of the goods, and this cargo is loaded onto the ship without the captain’s knowledge, they will be responsible for all damages caused by the cargo. In such a case, the captain has the authority to unload, destroy, or otherwise render the dangerous cargo harmless, and neither the carrier nor the captain will be held responsible for any damages that may arise from such interventions. (TCC, Art. 1148/1). For instance, if a cylinder containing flammable gas was loaded onto the ship without the captain’s knowledge, and a leak from this cylinder caused a fire, the consignor is obliged to compensate for this damage.

Even if the captain approved loading the cargo knowing it was dangerous, they can still exercise the same authorities if the cargo endangers the ship or other goods; they can unload or destroy the cargo. In this case, neither the captain nor the carrier is obliged to compensate for the damage. However, if this process is evaluated under the rules of general average, provisions regarding the sharing of damages are reserved. (TCC, Art. 1148/2).

ff. Informing the Carrier or Their Agent:

The knowledge of the carrier or their agent is equivalent to the knowledge of the captain (TCC, Art. 1149). In other words, if the consignor informed the agent about dangerous or prohibited cargo, this information is considered known by the captain.

gg. Packaging and Marking Obligation:

The shipper must properly package and mark the goods to be transported. Damages arising from inadequate packaging or marking are the responsibility of the shipper (Turkish Commercial Code, Article 1145/1). For example, if glass products are not properly packaged and break during transport, the carrier cannot be held responsible for this damage.

hh. In Case the Cargo Poses a Danger:

If the goods loaded onto the ship by the shipper endanger the ship or other cargo, the captain has the authority to unload or destroy these goods (Turkish Commercial Code, Article 1148/2). For example, if a barrel carrying flammable chemicals leaks on board and endangers the ship, the captain can throw this barrel overboard, and the carrier cannot be held responsible for the damage arising from this situation.

12. Securing Freight Claims

a) Carrier’s Lien

The carrier has a lien on the cargo to secure its claims arising from the freight contract. This right is based on Article 950 of the Turkish Civil Code and grants the carrier the authority to hold the cargo until its claims are secured. This right continues as long as the goods are in the carrier’s possession. If the cargo has been delivered, the carrier can exercise this lien as long as the cargo is in the consignee’s possession and by applying to the court within thirty days (Turkish Commercial Code, Article 1201/1).

The right of lien can only be exercised by the carrier over goods corresponding to the amount of their claim (TTK, art. 1201/3). This means the carrier cannot detain goods whose value exceeds the amount of their claim. However, as an exception, in the case of general average or salvage claims, the carrier may exercise a right of lien over all the goods for such claims. This ensures that the carrier secures the expenses incurred as a result of participating in general average or salvage operations. For example, expenses incurred for the salvage of the ship or costs shared among cargo owners in a situation of common danger justify the carrier exercising a right of lien over the entire cargo. (TTK, art. 1201/3)

b) Disputed Claims and Security

If a dispute arises concerning the carrier’s freight or other claims, the disputed amount is determined by the court and deposited at a place designated by the court (TTK, art. 1202/1). With the deposit of the disputed amount into court, the carrier’s claim is considered secured, and the carrier becomes obliged to deliver the goods. Therefore, after this stage, the carrier cannot detain the cargo on the grounds that their claim has not been collected.

After the delivery of the goods, the carrier may withdraw the deposited amount by providing adequate security (TTK, art. 1202/2). This means that if the carrier wishes to take this disputed amount that was deposited to secure their claim, they must provide sufficient collateral to the court. For example, by presenting security such as a bank guarantee letter to the court, they can collect the deposited amount. This regulation aims to protect the rights of both parties by securing the claims.

c) Payment Obligation of the Third-Party Consignee

If goods carried during the transportation process are to be delivered to a person other than the shipper (e.g., the consignee), in this case, the consignee, when demanding delivery of the cargo based on the freight contract, bill of lading, or other maritime transport documents, becomes obliged to pay all claims determined within the framework of the documents on which this demand is based (TCC, art. 1203/1).

When the consignee requests the delivery of the goods based on the maritime bill of lading or bill of lading held by the carrier, they are obliged to cover all fees and expenses specified in these documents. In this context, not only the freight charge, but also customs duties, port charges, or similar additional expenses are among the items the consignee must pay. For example, if the carrier has incurred an additional insurance cost to protect the goods during transport or has paid customs duties, the consignee cannot take delivery of the goods without paying these expenses.

d) Exercise of the Right of Lien Against the Consignee

When the consignee demands delivery of the goods during the transportation process, they must be subject to the carrier’s right of lien for its claims. However, there is an important limitation here: The carrier can only exercise its right of lien for claims specified in TCC art. 1203, such as freight charges and other expenses. The carrier cannot exercise the right of lien over the consignee’s goods for other claims (e.g., debts remaining from a previous carriage) (TCC, art. 1204/1).

If the carrier has detained the goods by exercising its right of lien and this situation turns into a legal enforcement process, notifications and summonses to be made to the debtor must primarily be made to the consignee. However, if the consignee cannot be found or refuses to take delivery of the goods, then the necessary notifications are made to the sender (Turkish Commercial Code, art. 1204/2).

For instance, when the carrier initiates an enforcement process because the consignee has not paid the freight debt, a notification is sent to the consignee’s address. If the consignee’s address cannot be reached or the consignee refuses to accept the notification, then the notifications are directed to the sender.

e) Situation of Goods to be Delivered to Multiple Consignees

In some cases, goods may have been transported under a single freight contract, but multiple bills of lading or sea waybills may have been issued during the transportation process. In this case, for the carrier to exercise its right of lien, it must evaluate the claims corresponding to each bill of lading or sea waybill separately (Turkish Commercial Code, art. 1204/3).

For example, even if the carrier transports cargo on a single ship under one freight contract, multiple bills of lading might have been issued for the cargo to be delivered to different recipients (consignees). If one of the recipients does not pay the freight debt, the carrier can exercise its right of lien only based on the bill of lading belonging to that specific recipient. It cannot exercise the right of lien over the goods of other consignees.

f) Right of Recourse

aa. In Case of Delivery of Goods

If the carrier has delivered the goods to the consignee, then in this case, the carrier can no longer claim the freight and other expenses from the shipper that could have been claimed from the consignee according to Article 1203. After the delivery is completed, the carrier cannot directly demand payments from the shipper that were due from the consignee. However, there is an exception here. If the shipper has been unjustly enriched to the detriment of the carrier, the carrier may then have recourse against the shipper. In other words, if the shipper has obtained an undeserved benefit, the carrier has the right to claim this amount from the shipper (Turkish Commercial Code, art. 1205)

bb. In Case of Conversion of the Lien into Money

If the carrier has requested the sale of the goods by exercising its right of lien and has not been able to fully collect its claim as a result of the sale, the carrier may then demand the remaining claims from the shipper based on the freight contract. This article protects the carrier’s right to recourse against the shipper for the remaining debt if the carrier cannot collect all its claims as a result of converting the goods into money (Turkish Commercial Code, art. 1206)

cc. In Case the Consignee Does Not Take Delivery of the Goods

If the consignee refuses to take delivery of the goods, the shipper is then obliged to pay the carrier the freight and other claims according to the freight contract. (Turkish Commercial Code, art. 1207/1). This is a regulation that protects the carrier’s claims. Furthermore, in this case, all provisions related to unloading will apply to the shipper as if the shipper were taking delivery of the cargo instead of the consignee (Turkish Commercial Code, art. 1207/2).

13. Termination of the Freight Contract

a) Nullification of the Contract

aa. Due to the Loss of the Vessel

aaa. Before the Commencement of the Voyage

If the vessel is lost due to an unforeseen event before the voyage begins, the contract of carriage (freight contract) becomes void. In this case, neither party is obliged to pay compensation to the other. However, obligations that arose up to the moment the vessel was lost must be fulfilled.
(TCC, art. 1209) For example, if the vessel becomes completely unusable in an unexpected accident before the voyage, the carrier or the shipper will not have to pay compensation to each other due to this event. However, any loading-related expenses, if any, must be paid.

bbb. After the Voyage Has Commenced

If the vessel is lost due to an unforeseen event during the voyage, the carrier may claim freight pro rata itineris (distance freight) in addition to its claims that arose up to the moment the vessel was lost. Distance freight is determined according to the quantity of the salvaged cargo, the distance covered up to the point where the vessel was lost, and the risks encountered during the voyage. However, this freight cannot exceed the value of the salvaged cargo at the date and place where it was secured. For example, if a vessel sank in the middle of a voyage and a portion of the cargo was brought to a safe port, the carrier may claim distance freight for the salvaged cargo.

Even in the event of the vessel’s loss, the master is obliged to protect the interests of the cargo owners. (TCC, art. 1211) Emergency Situations: Even if the master cannot communicate with the shippers, they must store the goods in a suitable place, sell them, or send them to the port of destination with another vessel. Right of Lien and Sale: The master may pledge the goods or sell a portion of them to cover the necessary expenses for these operations. Condition of Delivery: The master is not obliged to deliver the goods unless the carrier’s distance freight and other claims are paid or security is provided for them. Liability: The shipowner, as well as the carrier, is responsible for damages arising from these actions of the master.

ccc. Loading and Transshipment to Another Vessel

If the carrier is authorized to load onto a vessel other than the one explicitly named in the contract, in the event of the loss of the vessel, they may complete the transport operation with another suitable vessel. However, they must notify the shipper of this choice without delay. (Turkish Commercial Code, Art. 1212) For instance, if a vessel not explicitly specified in the contract can be used and this vessel is also lost, the carrier can continue the transport by transshipping the cargo to another vessel.

ddd. Vessel Becoming Unseaworthy

If a vessel is declared unseaworthy by a court decision, it is considered lost. In this case, the charter party terminates due to the vessel’s inability to complete the transport operation. For example, when a vessel that requires major repairs due to technical reasons and cannot put to sea is declared unseaworthy by the court, the charter party is considered automatically terminated.

bb. Due to Loss of Goods

aaa. Before the Voyage Begins

If the entire cargo, specifically identified in the contract, is lost due to an unforeseen event, the freight contract automatically terminates. In this case, the parties are not obligated to pay compensation to each other. However, obligations that arose until the moment of loss must be fulfilled (TCC, art. 1214/1). For example, if a container planned to be transported by a specific ship in the contract is completely lost by fire before loading, no compensation can be claimed between the parties. If only a part of the cargo is lost, the consignor is given these two options: Terminate the contract by paying half of the agreed freight. Load other cargo, provided it does not make the carrier’s situation more difficult (TCC, art. 1214/2). If the consignor does not exercise one of these rights before the ship departs from the port, they must pay the full freight. For example, the consignor has the right to load new cargo instead of the lost container. However, they must exercise this right before the ship sails.

If the shipper prefers to load other goods instead of the lost goods, the shipper is obliged to complete this loading as soon as possible, cover the loading expenses, and compensate for the damages caused (Turkish Commercial Code, Art. 1214/3). For example, a shipper who performs a new loading instead of lost goods must cover the damages incurred by the carrier due to this delay.
If all the goods specified by type or kind in the contract are lost before loading, the freight contract does not terminate. The shipper has the right to load other goods of the same type or kind (Turkish Commercial Code, Art. 1215/1). For example, another agricultural product of the same type can be loaded instead of a perishable agricultural product before transport. If the goods are specified by type and kind and are completely lost after loading, the shipper has the right to immediately notify the carrier of this situation and deliver other goods in their place. However, in this case: they must complete the loading process as soon as possible, cover the extra expenses, and compensate for the carrier’s damage if the waiting period is exceeded (Turkish Commercial Code, Art. 1215/4). For example, a shipper who wants to load new products instead of spoiled cargo must cover the costs arising from the ship’s stay in port during this process.

bbb. After the Voyage Has Started

If all the goods being transported are lost due to an unforeseen event during the voyage, the freight contract automatically terminates. Only the carrier’s claims that have arisen up to the moment the contract terminated are paid. In this context, provisions arising from natural losses of goods are also reserved (Turkish Commercial Code, Art. 1216)

The partial loss of goods due to an unforeseen event during the voyage does not terminate the contract of carriage between the parties. In this case, the fact that the lost part has not been transported or has been removed from the vessel during the voyage does not prevent the continuation of the contract. It is obligatory to pay the full freight to the carrier even in these situations (Turkish Commercial Code, Article 1217/1). For example, if 20 tons of a 100-ton wheat shipment loaded onto a vessel are damaged and rendered untransportable due to dampness or leakage during the voyage, the full freight charge is paid even if the carrier delivers the remaining 80 tons. However, if there are situations arising from natural loss or shrinkage due to the nature of the lost goods, the provisions of Turkish Commercial Code 1199/2 and 1199/3 are reserved. For instance, special regulations are considered for natural evaporation or ordinary losses of organic products during transport. This provision is based on the principle that partial losses occurring during transport do not affect the carrier’s right to claim freight. However, the shipper’s right to claim damages from the carrier in cases other than natural losses is always reserved.

b) Termination of the Contract

aa. Cases Granting the Parties the Right to Terminate

When the contract of carriage becomes impossible to fulfill due to public measures, the parties have the right to terminate without paying compensation. Public measures include situations such as an embargo being placed on the vessel, the vessel being seized for state service, loading or destination ports being blockaded, or the export, import, or transit of goods to be transported being prohibited. For example, if the loading port is under an embargo, the carrier or the shipper may terminate the contract (Turkish Commercial Code, Article 1218/1).

In the event that circumstances preventing the performance of the contract arise before the journey has even begun, if it is understood that this impediment will not be removed in a short period, the parties may exercise their right of termination. If the existing conditions indicate that it is not possible for the impediment to cease within a reasonable time, the parties have the right to terminate the contract without paying compensation to each other (TCC, art. 1218/2).

If the performance of the contract has become impossible due to an impediment arising after the journey has commenced, the parties are subject to a one-month waiting period to exercise their right of termination. This period is calculated from the date the captain learned of the impediment in a port, or from the date the vessel reached a port if they learned of it then. For example, if a blockade is imposed at the port of destination, the carrier or the shipper may exercise their right of termination after waiting for one month (TCC, art. 1218/2).

In partial voyage charters and liner shipping contracts, the parties may exercise their right of termination without any obligation to wait for a certain period. This provision grants the parties the opportunity to act more quickly and aims to minimize commercial losses (TCC, art. 1218/3).

When an extraordinary situation such as war arises, if the vessel or the goods to be carried are not considered free or there is a risk of seizure and confiscation, the parties may exercise their right of termination without any obligation to wait. For example, if goods sent to a war zone carry the risk of being captured by enemy forces, the parties may immediately terminate the contract (TCC, art. 1218/4).

The shipper has the right to load different goods in place of goods not deemed free due to an impediment arising before the commencement of the voyage. For example, if the export of the goods to be carried is prohibited, the shipper may ensure the continuation of the contract by loading different goods not subject to this prohibition under article 1144 (TCC, art. 1218/5).

bb. Cases Where Parties Do Not Have the Right to Terminate

aaa. Obstacles Pertaining to Only a Part of the Goods

Obstacles such as export, import, or transit bans related to only a part of the goods do not lead to the termination of the contract. The charterer must remove and take away the goods that are not freely passable due to such restrictions from the vessel. Before the voyage commences, the charterer may deliver another cargo in place of the restricted goods, provided that it does not worsen the carrier’s situation. Alternatively, the charterer may choose to terminate the contract by paying half of the freight charge. However, after the voyage has commenced, the contract is not terminated due to goods that cannot be transported, and the carrier is paid the full freight (TCC, art. 1219/1). For example, if the charterer learns that a cargo loaded on the vessel cannot be transported due to an import ban, they must ensure the removal of these goods from the vessel.

In partial voyage charters and liner contracts, there is no right to terminate due to obstacles related to a part of the goods (TCC, art. 1219/2). For example, in a liner contract, even if the carriage of the goods by one charterer is prevented, the contract cannot be terminated considering the rights of other charterers.

bbb. Master’s Deviation from Route for a Justifiable Reason

A captain’s deviation from the course for a justified reason, such as saving lives or property at sea, does not alter the rights and obligations of the parties. This situation does not hold the carrier liable for damages that may arise from such deviation (TCC, art. 1220/1). For example, if a ship’s captain deviates from the course during the voyage to assist another vessel, in this case, the consignor cannot demand any compensation for damages from the carrier. Article 2 of the Turkish Civil Code, which regulates the rules of good faith, is applicable here. Within the framework of good faith rules, the captain is expected to present a justified reason (TCC, art. 1220/2). For example, it must be proven that the captain’s deviation from the course occurred in a compulsory and urgent situation and that they acted in good faith.

ccc. Ship’s Need for Repair During Voyage

If the ship needs to be repaired during the voyage, the consignor may demand the unloading of the goods, provided that the freight and other receivables are paid or a guarantee is given, or may wait for the repair process. However, in freight agreed upon for a specific period, the repair duration is not included (TCC, art. 1221/1). For example, if a malfunction occurs in the ship’s engine, the consignor has the right to unload their cargo during the repair period. Unloading operations must be carried out in accordance with other relevant legislation (TCC, art. 1221/2). For example, the consignor is responsible for the safety of the goods carried during unloading.

In partial voyage charters or liner contracts, if goods are unloaded during repairs, the consignor may reclaim the goods provided that the freight and other receivables are paid (TCC, art. 1221/3).

cc. Effect of Other Reasons on Termination

Delay in Voyage; If the voyage is delayed due to a natural event or an unforeseen circumstance not stipulated in this Law, the rights and obligations of the parties remain unchanged. However, if the delay completely nullifies a specific purpose of the contract, the parties may acquire the right to terminate. Furthermore, in case of long-term delays, the shipper may request the discharge of the goods. In this case, the costs of reloading and transportation of the goods are borne by the shipper. If the goods are not reloaded, the shipper is obliged to pay the freight and cover damages arising from the discharge (TTK, m. 1222/1). For example, if the purpose of the voyage is nullified due to a long-term quarantine, the shipper may request to discharge the cargo.

In delays caused by public authority actions, freight agreed upon on a time basis does not apply (TTK, m. 1222/2). For example, on a ship whose waiting period is extended due to quarantine measures applied at the port, time-based freight is not collected.

In partial voyage charters and general cargo contracts, the shipper may exercise the right to temporary discharge only with the consent of the other shippers (TTK, m. 1222/3). For example, cargo cannot be discharged under a general cargo contract without the consent of the other shippers.

14.Exercise of the Right of Termination

a) Notification of Termination

The right of termination must be exercised through a written notice. This notice can be made via email, fax, or similar technical means. However, the notice must be in writing and transmitted between the parties in a verifiable manner. This is important to ensure legal certainty and prevent potential disputes regarding the termination process. For example, the shipper may give notice of termination by sending a written email to the carrier to terminate the contract (TTK, m. 1224).

b) Effects and Consequences of the Right to Termination

aa. If the Contract is Terminated Before the Voyage Begins

If the freight contract is terminated before the voyage begins, the parties are not obligated to pay compensation to each other. However, debts incurred up to the moment of termination must be fulfilled. This provision is introduced to prevent harm to the parties. For example, if termination occurs due to an export ban before the ship is loaded, only expenses such as loading preparations made up to that point are paid (TTK, m. 1225)

bb. If the Contract is Terminated After the Voyage Has Begun

When the right to termination is exercised after the voyage has begun, in addition to the carrier’s claims that have arisen up to the moment of termination, a distance freight for the voyage is also paid. Distance freight, even if the goods are returned to the port of departure, is calculated according to the distance, duration, difficulty, and risks of the voyage, in accordance with Article 1210. For example, if termination occurs during the voyage, the carrier must be paid the distance freight up to the moment of termination (TTK, m. 1226/1).

During termination, the goods are unloaded at the port where the ship is located or the nearest port. However, in partial voyage charters and general cargo contracts, the unloading operation cannot be carried out without the consent of other shippers. In this case, the shipper is obliged to cover the expenses and damages caused by the unloading operation. For example, in a general cargo contract, the shipper cannot demand the cessation of the voyage without the approval of other shippers. However, they can fulfill this demand by covering the expenses and damages (TTK, m. 1226/2)

cc. Continuation of the Master’s Obligations

After termination, the captain’s obligations, such as ensuring the goods are stored in a safe port or transported by another vessel, continue. These obligations arise from the captain’s responsibility to protect the interests related to the cargo. In this context, the captain may take appropriate measures to safely transfer the goods if necessary. Furthermore, the carrier and the shipowner are responsible for compensating any damages that may arise while the captain fulfills these obligations (Turkish Commercial Code, art. 1226/3). For example, after termination, the cargo remaining on the vessel must be secured by the captain in the nearest port. During this process, the captain’s obligation to protect the cargo continues.

IMPORTANT REMINDER

Charterparty agreements are subject to the comprehensive and specific regulations of maritime commercial law. Matters such as the formation of the charterparty agreement, the obligations of the parties, termination procedures, and the determination of liabilities must be carried out in accordance with the detailed legal requirements stipulated in the Turkish Commercial Code. It is important to seek professional support from a lawyer or an expert knowledgeable in maritime commercial law to protect your rights and interests, prevent potential disputes, and ensure the process is completed fully. Regardless of whether the origin and destination of the cargo to be transported under the charterparty agreement are Izmir, Mersin, Istanbul, Zonguldak, Kocaeli, Tuzla, or Dilovası; obtaining expert support in these processes is critically important for the protection of your rights.