Ulgener

-Prof.Dr.M. Fehmi Ülgener

The SHIPMAN standard ship management agreement, one of BIMCO’s most widely used forms, was adopted at the documentation committee meeting held in Hamburg in March and made available to the world maritime community. The form in question, the previous version of which was dated 2009, was revised and finalized by appointing a sub-committee, as is practiced in other BIMCO forms, in order to adapt to the innovations encountered in practice and to eliminate the drawbacks arising as a result of court decisions in the intervening period.

As might be expected, the significant changes in the new form are mostly directed at the issues that are predominantly on the maritime agenda today. The regulation of emission volumes to prevent environmental pollution, the ever-increasing importance of sanctions and their impact on trade life, and cybersecurity clauses are among the most noteworthy issues in the new form.

One of the changes introduced in the SHIPMAN 24 form is the possibility for the manager to use its affiliated companies in the execution of the relevant agreement.

The new form SHIPMAN retains the order of the old forms, covers commercial management, crew management, technical management, and insurance issues as usual, and sets out the obligations of the manager in clause 8 and of the owner in clause 9.

The first important amendment of the SHIPMAN 24 form is found in Section 3, Article 10. This clause, named "Emission Trading Scheme Allowances", as mentioned above, is directly related to the regulation of emission volumes, which has been at the forefront in recent years. In summary, this clause regulates the following issues:

"Emission limit" refers to the maximum amount of greenhouse gas emissions that can be made by a vessel within the limits set / permitted / limited by the legislation on Emissions.

"Responsible entity" means the party responsible for ensuring compliance by law or regulation with the emission legislation applicable to the vessel.

If the responsible party is the owner, he shall, at his own expense, comply with or procure compliance with the Emission Scheme(s) applicable to the vessel throughout the period of this Agreement. In addition, the manager shall provide the owner with Emission Data in a timely manner or at regular intervals to be agreed between the parties. Such Emission Data shall be verified by an accredited verifier, where applicable, and if required by the owner audited by an independent party approved by him, at the owners’ expense.

If the responsible party is the manager, he shall provide the Emission Data to the owner together with the calculation of the Emission Allowances required, monitor the Emission Data in accordance with the Emission Scheme(s) applicable to the Vessel and report to the administering authority, prepare and present in writing to the owner every month estimates of the Vessel’s Emission Allowances for the ensuing month, prepare and present, in writing, to the owner estimates of the Emission Allowances due for the Vessel for the final month or part thereof no later than fourteen days before the termination of this agreement.

In both forms, the fourth section is devoted to insurance and financial issues. Similarly, the fifth section regulates legal issues, general matters, and the duration of the agreement.

Although clause 17 of the fifth section, as in clause 16 of the SHIPMAN 2009 form, provides the transfer of the obligations arising from this agreement by the manager to another legal entity through a subcontract is subject to the consent of the owner, as mentioned above, an important exception is made in this regard and the companies affiliated to the manager (“managers affiliates”) are excluded from the consent of the owner.

There are some minor changes in the force majeure clause in the same section; for example, with the Covid experience, the term pandemic has been added next to epidemic. In addition, nuclear, chemical, and biological contamination are also included in the new form.

SHIPMAN 24 The article titled "responsibilities" regulates the liability of the manager towards the owner in subparagraph "b". There is no significant change in this article compared to the previous form; the manager is still liable for negligence, gross negligence or willful default and this liability can never exceed 10 times the management fee.

In the "Indemnity" and "Himalaya" clauses in this section, no difference was observed between the two forms.

Article 21 of the SHIPMAN 24 form stipulates that the manager shall provide information about the vessel to the owner through the digital information platform. This is not included in the SHIPMAN 2009 form.

In Article 25 of the form examined, there is a clause that refers to the MLC in terms of maritime labour law and makes a regulation in parallel.

Article 26 of the form covers "Personal data protection" and shows the obligations of both parties to the agreement.

Article 27 sets out the responsibilities of the parties with respect to cyber security in line with the developments in recent years.

Article 28 contains the sanction clause. This clause is written in parallel with the BIMCO 22 Sanctions Clause, (but in a shorter form) as only the relevant issues are included.

SHIPMAN 24 Clause 29 regulates "anti- corruption".

Clauses 25, 26, 27, 28 and 29 mentioned briefly above are not included in the SHIPMAN 2009 form.

Although the "termination" clause is almost the same in both forms, there are some (detailed) differences between them. We recommend that interested readers review these clauses.

While SHIPMAN 2009 contains the clause named "Bimco Dispute Resolution Clause" in terms of disputes between the parties, the SHIPMAN 24 form contains the clauses named "Bimco Law and Arbitration Clause 2020" and "Bimco Mediation / Alternative Dispute Resolution Clause 2021" right after it.

In the closing section of SHIPMAN 24, unlike the other form, it includes the clauses "waiver", "warranty of authority" and Bimco Electronic Signature Clause 2021".

-Duygu Yazıcı Aracı

As it is known, compulsory mediation has been introduced into the Turkish Legal System and it has become mandatory for parties (with exceptions) to apply to mediation before filing an action. Also, in order to encourage all parties to participate in the mediation process, the Law on Mediation in Civil Disputes No. 6325 (“Mediation Law”) provides that in the event that the mediation process ends due to one of the parties not attending the first meeting without giving a valid excuse, the party who didn’t attended the mediation meeting will be responsible for the litigation expenses and attorney fees even if he is partially or completely justified in the case.

However, the relevant article of the Mediation Law was examined by the Constitutional Court upon the request for annulment and was found to be contrary to Articles 13, 35 and 36 of the Constitution. According to the Constitutional Court's Decision No. 2023/160 E., 2024/77 K. and dated 14/3/2024, the relevant article disrupts the fair balance between the public interest and the right to property and access to the court. In addition, the Court stated that holding the party who was completely justified in the trial, in other words, who was found to have been subjected to a completely unfair process at the end of the trial, responsible for all the costs of the litigation without taking into account of his special situation is a disproportionate limitation.

For these reasons, the Mediation Law's article stating that the party who did not attend the meeting without giving a valid excuse will be held responsible for all of the litigation expenses and that the attorney fees will not be awarded in favour of this party, even if this party is partially or completely justified in the action filed, if the mediation process was terminated due to his non-attendance, was annulled.

The decision in question will enter into force on 18 January 2025, 9 months after 18 April 2024, the date of its publication in the Official Gazette. Therefore, unless a new regulation is made on the issue, the party who was justified in the case will not be responsible for litigation expenses and attorney fees may be awarded in his favor, even if he did not attend the mediation meeting as of this date.

-Gül Alpay

The incorporation of the Convention on Limitation of Liability for Maritime Claims, 1976 (“LLMC”) into Turkish domestic law was realised through the Turkish Commercial Code of 2012, which still remains in effect;

(1) The liability arising from maritime claims may be limited in accordance with international conventions accepted by the Republic of Turkey, including the Convention on Limitation of Liability for Maritime Claims dated 19/11/1976, as amended by the Protocol of 2/5/1996, or any subsequent conventions replacing it.

(2) Any amendments to be made in accordance with Articles 20 and 21 of the 1976 Convention on Limitation of Liability for Maritime Claims and Article 8 of the 1996 Protocol shall be applied from the date they enter into force for the Republic of Turkey.

(3) The term “1976 Convention” as used in this Section shall collectively refer to the Convention on Limitation of Liability for Maritime Claims dated 19/11/1976, the Protocol of 2/5/1996, and any amendments thereto that have entered into force for the Republic of Turkey.

Although Turkey has not undergone a formal approval process for the increased 1996 limits (“the 2012 Amendment”), it is accepted that the 2012 Amendment took effect in Turkey through the “tacit acceptance” procedure outlined in the 1996 Protocol.
As a matter of fact, in 2019, the Turkish Admiralty Court decided the limitation fund to be constituted as per the increased limits.

Application Procedure and Timing

As it is known, according to Article 11(2) of the Convention, the limitation fund can be constituted, either by depositing the sum in cash, or by producing a guarantee acceptable under the legislation of the State Party.

Although there are no specific provisions in the Turkish Commercial Code regarding the acceptable form of guarantees, prevailing practice shows that the courts exclusively recognise bank letters of guarantee issued by Turkish banks. (letters of guarantee issued by a Turkish bank and counter-guaranteed by a foreign bank are usually used in practice.)

If a bank letter of guarantee will not be issued, the fund can also be established through cash deposit. Accordingly, the sum will be deposited into the court's designated account for the fund. Turkish Commercial Code also stipulates that the fund must be maintained in an interest-bearing account until the completion of distribution.

The proceedings at the court of first instance for the establishment of fund will take approximately one year; however this judgement can be appealed. The appeal proceedings will also take approximately 1-1.5 years.

Would The Turkish Courts Recognise A Fund Constituted In A Foreign Jurisdiction As Per LLMC?

In the 2010s, we experienced this situation where a loss occurred in Turkey and the clients set up the fund in a foreign jurisdiction. Despite this, a few claimants pursued legal action against the clients in Turkish Courts.

Ultimately, the Turkish Courts decided that the claims should be addressed to the fund. However, it's important to note that these cases were thoroughly examined on the merits as well and the initial court proceedings lasted around 2-3 years.

Thus, the establishment of the fund in a foreign jurisdiction does not guarantee a quick resolution in the Turkish legal system.

-Canberk Tuygan

Maritime Liens in Turkish Law

The maritime lien is regulated under Article 1320 and the following articles of the Turkish Commercial Code (TCC). Pursuant to Article 1321 of the TCC, these claims give the shipowner the maritime lien over the ship and its attachments.

The maritime lien comes into existence with the birth of one of the claims stated in the law and it is not possible to register it in the ship registry. Mentioned lien holders obtain their claims from the ship and its attachments, including mortgaged claims, in priority over other claimants. The claims listed in Article 1320 are accepted as the claims that give maritime lien, including the transfer of these claims through succession or assignment of the claims, depending on the principle of the limited number of claims. Claims other than these do not confer maritime lien.

When the article justifications of the TCC in Turkey are examined, it is stated that the articles on Maritime Liens are based on the provisions of the "International Convention on Maritime Liens and Mortgages" (1993 Pledge Convention) adopted in Geneva on 06/05/1993. Turkey became a party to the 1993 Pledge Convention with the "Law No. 6940 on the Ratification of the Ratification of the International Convention on Maritime Liens and Mortgages" published in the Official Gazette dated 25/3/2017.

Claims arising from duties payable for ports, canals, other waterway dues, quarantine and pilotage and Transferability of Lien

Dues to be paid for ports, canals, other waterways, quarantine and pilotage (Art. 1320/1 - subparagraph (d) of the TCC) are also among the claims that are listed in the relevant article in a limited manner and entitle the claim holder to maritime liens. These claims are the payments to be made pursuant to the financial obligations stipulated in return for the utilisation of public services and facilities within the scope of the operation of the ship. The claimants of these claims are, as a rule, the State, public institutions and organisations. However, pilotage services may also be provided by private law persons who have been granted operating licences and service permits to provide pilotage services on behalf of the administration, and the operation of some privatised ports has also been transferred to private law persons. Considering this situation, the ship claims specified in Article 1320/1 (d) of the TCC should be interpreted narrowly as "public claims", and it should be accepted that the service fee provided on behalf of the administration and the fees for the use of the facilities to which the administration has transferred the operating rights are also within the scope of these claims.

In practice, these payments to public institutions are made by the ship's agent. Therefore, the main problem in determining the claimants arises in the event that these claims are paid to the owners by a third party, whether this third party who makes the payment will have the title of the owner of the maritime lien. The most important question in this regard, in a sense, points to the transferability of this right: "In the event that the claim which gives a maritime lien is paid by a third party, does this lien pass to the third party?” The answer to this question has been given by the Turkish legal doctrine by referring to both the references to Article 109 of the abrogated Code No. 818 / Article 127 of the Code No. 6098, which regulates the legal succession of the Code in the application of the TCC No. 6762, and the explicit provision of Article 1325 in the TCC No. 6102.

In practice, it is considered that the transferability of ship claims will have beneficial consequences, for example, in the event that a company engaged in maritime salvage works is sold, the transfer of the ship claims of the company together with the company will benefit the buyer and facilitate the sale for the seller. Regarding the owner of the maritime lien, in connection with the transferability of the right, it is possible that the examples given for the new owners of the salvage company and the ship agents can also be given for the master in case he pays the seafarer's wages, as it is encountered in practice. In the doctrine, the situation of the payment of the duties stipulated in subparagraph (d) of Article 1320/1 of TCC No. 6102 by the ship's agent on behalf of the shipowner is discussed and it is stated by various authorities that the agent may rely on maritime lien in the pursuit of these claims. It is also stated that the assignment of the claimant's statutory maritime lien is most important for the payments made by the insurance companies to the claimants and by the agents on behalf of the owner of the ship, and in this case, it is stated that all the consequences attached to the claimant’s maritime lien will be transferred to the insurance company through subrogation.

Again in practice, the decisions of the Court of Cassation[1] regarding the disputes concerning the assertion of the maritime liens by the agents are quite numerous. At the common point of the judgements subject to these decisions; in order for the agents to become the owner of the maritime lien by paying the ship's claim, it is deemed necessary to prove that they also act as the agency of the ship subject to the lawsuit. If the agency has provided the services to the ship upon the master's request, and if it is able to submit the service invoices including the ship's name and stamp to the file, it will be able to take over the maritime lien pursuant to Article 1325 of the TCC.

[1] 11. HD., 11.10.2005, E. 2004/10073, K. 2005/9577; 11. HD., 04.04.2005, E. 2004/6503, K. 2005/3219; 11. HD., 05.04.2004, E. 2003/9099, K. 2004/3548; 11. HD., 30.03.2004, E. 2003/8610, K. 2004/3323; 11.HD., 10.06.2003, E. 2003/313, K. 2003/6151 ve 11. HD., 02.03.2004, E. 2003/7560, K. 2004/1980.