Maritime Law – Arrest And Security

1          What are the options available to a party seeking to obtain security for a maritime claim against a vessel owner and the applicable procedure?

In accordance with TCC, the concept of maritime claims, which have been directly adopted from the provisions of the International Convention on the Arrest of the Ships, Geneva, 1999, has been included in addition to the provisions of maritime liens and the provisions concerning maritime liens have been renewed in line with the International Convention on Maritime Liens and Mortgages, Geneva 1993.
A vessel may be arrested in Turkey, only in respect of a maritime claim which are indicated under art. 1352; and only by means of Precautionary Attachment Decision to be rendered by the Turkish Courts. In accordance with art. 1355 of TCC, the Precautionary Attachment Decision can only be rendered against foreign flagged vessels by the courts being in the place where the vessel is anchored, berthed, moored or dry-docked have jurisdiction.
In accordance with art. 1363 of TCC, the applicant party, at the time of the application about the Precautionary Attachment Decision, should deposit the security in the amount of SDR 10.000 either in cash or in the form of a Bank Letter of Guarantee to the Court for the evaluation of the Precautionary Attachment Decision demand (The only exception for the deposition of such security is the applications about the receivables of the crew members). Referring to the amount of the security, both the arresting party and the opponent party have the right to request from the Court for the increase/decrease of the mentioned security amount.
After the issuance of the Precautionary Attachment Decision, in accordance with art. 1364 of TCC, the applicant party should apply to the competent enforcement office which is in the area where the vessel is or in the area where the court rendering the Precautionary Attachment Decision is, for the execution of the Precautionary Attachment Decision within 3 working days as of the date of the Precautionary Attachment Decision. Otherwise, the Precautionary Decision will be null and void ipso facto.

On the other hand, in order to provide the continuation of the Precautionary Attachment Decision, the applicant party should proceed with the initiation of the main proceedings (initiation of the main claim or commencement of the main enforcement proceeding) within 1 month as of the date of the issuance of the Precautionary Attachment Decision; otherwise, the Precautionary Attachment Decision will be automatically revoked.

Arrest is also permissible of any other vessels which, when the arrest is affected, are owned by the person who is liable for the maritime claim and who has, when the claim arose;  (a) ownership of the vessel in respect of which the maritime claim arose; or (b) charterer or possessor or shipper of that vessel. However, with regard to the disputes concerning the ownership or the possession of the vessel, a Precautionary Attachment Decision may be rendered merely over the vessel, which is subject to that dispute.

In accordance with Turkish Law, the parties may raise objections about Precautionary Attachment Decision and such objections are evaluated by the Court which issued the Precautionary Attachment Decision.

2          Where security is sought from a party other than the vessel owner (or demise charterer) for a maritime claim, including exercise of liens over cargo, what options are available?

In line with art.1201 of TCC, the carrier has the lien right as per the Turkish Civil Code, over the cargo for his receivables which are arising from the affreighment contract. In accordance with the said provision, the lien right of the carrier over the cargo continues during the period that the cargo subject to the affreighment is under the possession of the carrier. Furthermore, after the delivery of the cargo, if the cargo is still under the possession of the receiver, the carrier is entitled to apply to the competent court for exercising the lien right over the cargo within 30 days as of the date of the delivery.

3           In relation to maritime claims, what form of security is acceptable; for example, bank guarantee, P&I letter of undertaking.

In accordance with art. 1372 of TCC, the parties may agree on the type of the guarantee. With this article, subject to the mutual approval of the parties, the submission of the P&I Letter of Undertaking as a security is accepted. Under the old regime, the P&I Letters of Undertaking were not acceptable at all by the courts, where the Bank Letters of Guarantee or cash securities should had been be provided as a security for the release of the vessels.

Therefore, under Turkish Law, as a security, apart from the Bank Letter of Guarantee, which should be final and definite, and cash security (these two kinds of securities are the most common securities), the P&I Letter of Undertaking is also acceptable provided that the parties agrees so.