Ulgener

-Yağızalp Kırca

In maritime transportation, situations are frequently encountered in which the original bill of lading is lost by the courier company before it can be delivered to the consignee or cannot be preserved after delivery. As a result of such undesirable events, the carrier does not deliver the cargo to the consignee who cannot present the bill of lading and disputes occur between the parties. Although these disputes are mostly resolved by delivering the cargo to the consignee after the conditions offered by the carrier are accepted by the consignee, it is also possible to take the dispute to court. In this article, we will explain the delivery of cargo against security, in accordance with the Turkish Commercial Code (TCC) and the practices of Turkish Courts, without the need to submit the original bill of lading.

Cancellation of Negotiable Instrument

In Turkish Law, negotiable instruments are deeds in which the right written on it is closely linked to the deed, and therefore the right can only be requested and transferred with this document. Pursuant to Article 1230 of the TCC, a bill of lading is considered a negotiable instrument since it entitles the bearer to take delivery of the cargo. When a negotiable instrument is lost, the first recourse is to file a lawsuit for the cancellation of the negotiable instrument. Article 651 of the Turkish Commercial Code gives the person who has rights on the negotiable instruments the right to request the cancellation of the negotiable instruments from the court in case the negotiable instruments are lost.

Article 651 of the TCC: "If the negotiable instrument is lost, the court may decide to cancel it. The person who has rights on the negotiable instrument at the time the negotiable instrument is lost or the loss occurs may claim the cancellation of the the negotiable instrument."

The second paragraph of Article 831 of the TCC regulates that the provisions regarding cancellation of a policy shall apply to the cancellation of a bill of lading. This issue is important for our newsletter. Article 765 titled "Security" regarding the cancellation of the policy provides the opportunity for those who claim the cancellation of the bill of lading from the court to take delivery of the cargo against security until the cancellation decision is made.

Article 765 of TCC: (1) Before deciding on cancellation, the court may impose an obligation on the acceptor to deposit the policy amount and pay it against sufficient security.

(2) The security shall constitute an compensation against the loss that may be suffered by the person who acquired the policy in good faith. If the deed is canceled or the rights arising from the deed are extinguished for any other reason, the security shall be withdrawn.

In the light of the above information, the Turkish Commercial Code allows the consignee, who is unable to present the original bill of lading to the carrier due to the loss of the bill of lading, to take delivery of the cargo against a security to be determined by the court. The consignee who wishes to take delivery of the cargo against security without waiting for the decision on the cancellation of the bill of lading must claim the cancellation of the bill of lading from the commercial court of first instance and the delivery of the cargo subject to the bill of lading against security until the cancellation decision is made.

While the consignee filing a lawsuit for the cancellation of the negotiable instrument, submits to the court documents such as a copy of the bill of lading, sales contract, invoice, customs declaration, etc., which demonstrate that it is the buyer of the goods and that the bill of lading left its possession against its will. We have already stated that the provisions of the law regarding the cancellation of the policy shall apply to the cancellation of the bill of lading. If The court is convinced that the person requesting the cancellation of the bill of lading is the bearer of the bill of lading, an announcement shall be made in the Trade Registry Gazette. The content of this announcement is an invitation to the holder of the bill of lading to bring the bill of lading within a certain period of time and a warning that the bill of lading will be canceled if it is not brought.

Article 760 of TCC: If the court finds the applicant's explanation of the loss of the policy inits possession credible, the court shall invite the person who took possession of the policy to return the policy within a certain period of time and shall notify that otherwise it will order the policy to be canceled by announcement.

Pursuant to Article 761 of the TCC, the period given to the holder of the bill of lading for the delivery to be specified in the announcement cannot be less than three months and more than one year. Pursuant to Article 762, this announcement shall be made three times in the Trade Registry Gazette.

Carrier's Right of Lien and Determination of Security

During the proceedings for the cancellation of the bill of lading, the court also considers the issue of delivery of the cargo against security. Article 1201 of the TCC regulates the carrier's right of lien over the cargo in dispute. The right of lien is intended to secure all claims of the carrier arising from the freight contract. The carrier has the possibility to exercise the right of lien on the cargo, limited to the claims arising from the voyage during which the cargo was transported and the amount of cargo that will guarantee the claims.

Article 1201 of TCC: (1) The carrier has the right of lien on the goods pursuant to Articles 950 to 953 of the Turkish Civil Code for all receivables arising out of the freight contract. The right of lien continues as long as the cargo is in the possession of the carrier; even after delivery, it is possible to exercise the powers arising from the right of lien, provided that an application is made to the court within thirty days and the goods are still in the possession of the consignee.

(2) The right of lien secures only the claims arising from the voyage in which the goods on which the right of lien is exercised are transported.

(3) The right of lien may only be exercised over the goods in the amount sufficient to secure the claim; however, the carrier may exercise the right of lien over the whole of the goods for the claims for common average and salvage.

Upon the claim to take delivery of the cargo against security, the court sends a notice to the carrier and gives a deadline for the carrier to submit its statements on whether it has exercised its right of lien on the cargo subject to the lawsuit and whether it has any claims arising from the carriage of the cargo subject to the bill of lading. The carrier who wishes to exercise the right of lien may request a security for the damages carrier may suffer if the cargo is delivered to the applicant without presenting the original bill of lading. In addition, the carrier may also request that its claims arising from the carriage are secured. If the amount declared by the carrier is accepted by the consignee, the court shall designate the place of deposit. This is only possible if the parties agree on the amount.

In the event of a dispute between the parties as to the amount, the amount of the security shall be determined by the court. The relevant issue is regulated under Article 1202 of the TCC.

Article 1202 of TCC: (1) If there is a dispute about the carrier's claims, the carrier is obliged to deliver the goods as soon as the disputed amount is deposited in a place to be determined by the court.

In the event that the entire cargo is delivered against security without presenting the original bill of lading, the damages that the carrier may incur if the original bill of lading is presented by a third party must be covered. Therefore, the amount of security to be set by the court can be expected to be the invoice value of the cargo or more.

After the dispute over the amount has been resolved, the court shall make a decision on the delivery of the cargo to the consignee upon the deposit of the specified security at the designated place.

Execution of an Injunction on Delivery of Cargo

The court shall determine the place of deposit and the amount of security in line with the practices explained above by an interim decision to be issued by the court. If the security is deposited, an injunction is issued for the delivery of the cargo. The consignee, who receives the interim injunction decision, applies to the enforcement office where the cargo will be delivered and takes delivery of the cargo through seizure, by the enforcement officer.

Cancellation of Bill of Lading and Return of Security

After examining the statements and evidence regarding the loss of the bill of lading without the will of the consignee, if the court is convinced that the bill of lading has been lost, if it is determined that three announcements have been made in the Trade Registry Gazette regarding the bill of lading and no application has been made to the court regarding the bill of lading despite the announcements made, the bill of lading shall be canceled. Following the finalization of the decision to cancel the bill of lading, the court shall order the return of the security deposited by the consignee claiming cancellation of the bill of lading.