Arrest of ships

In this study, the institution of the arrest of ships is addressed in detail within the scope of special regulations set under the Turkish Commercial Code ("TCC"), taking into account the provisions of international conventions, comparative law, and the problems encountered in this field, to the extent necessary. The provisions regarding the arrest of ships stipulated under the Eighth Chapter of the Fifth Book of the TCC numbered 6102, which regulate the "Special Provisions Regarding Compulsory Enforcement", were substantially adopted from the 1999 Geneva Convention regulations. Accordingly, as per art. 1352 para. 1 of the TCC, the groups of claims referred to as "maritime claims" allowing a ship to be arrested are listed and as per art. 1353 para. 2 of the TCC it is indicated that the arrest of ships is only permitted in respect of claims of a maritime nature and that an interim injunction cannot be imposed on the ship and that the ships cannot be prevented from sailing in any other manner in respect of such claims. Pursuant to art. 1362 of the TCC, it is sufficient for the claimant to furnish evidence that its claim is in the nature of maritime claims and that will enable the court to form an opinion as to its monetary value. Here, the proof that the claim is in the nature of marine claims is not considered adequate, and it should be approximately proven that the claim itself exists. Even if the maritime claim is secured by a legal or contractual lien, there is no obstacle for the claimant to request a preliminary injunction order. This being said, in our opinion, it shall not be possible for the claimant holding the right of lien who exercised this right to request a preliminary injunction to be granted on the ship. The principles of general enforcement law are adopted as to the reasons of arrest of ships. Accordingly, if the maritime claim has become due and the claim has not been fulfilled by the debtor, it may be requested that an arrest order to be awarded over the ship without seeking any other reason. In terms of the maritime claims that have not fallen due, a request may be made for the arrest of ships as per art. 1353 para. 5 of the TCC, provided that the conditions set out under art. 257 para. 2 of the Code of Enforcement and Bankruptcy ("CEB") are fulfilled. Prior to bringing an action or initiating an enforcement proceeding on merits, the arrest of ships should be requested from the competent court to be determined as per the second sentence of art. 5 para. 2 of the TCC. Once the proceedings on the merits have been brought, the arrest order may only be requested from the court that is hearing the case. The competent court for the arrest of ships depending on the flag of the vessel is regulated under the provisions following art. 1354 of the TCC. The rule of jurisdiction to be applied here, is an exclusive jurisdiction. The issue of whether the Turkish Courts have the authority to arrest the foreign ships passing through the bosphorus is subject to the provisions following art. 1354 of the TCC. The limitation set out under art. 1369 of the TCC obliges the identification of the legal relationship between the debtor and the ship. Pursuant to art. 1369 para. 1 subpara. (a) of the TCC a ship cannot be arrested for the charterer's debt. This being said, if the ship is in the same economic union with the owner and if the structure of the legal entity is being abused, the corporate veil may be pierced. The ships owned by a governmental entity may be arrested, except for the ships exclusively designated for governmental service. In the Eighth Chapter of the Fifth Book of the TCC, which sets forth special regulations as to the arrest of ships, a special rule of procedure is not determined. However, as per art. 1363 of the TCC, it is obligatory for the claimant to deposit security amounting to 10.000 SDR. Upon request, it will be decided whether the petition and its attachments will be served on the debtor and whether a hearing will be held. For this reason, a person who thinks that an application of preliminary injunction order will be made against him can prevent the preliminary injunction order to be awarded by applying together with the documents and explanations to the court authorized for the preliminary injunction prior to the application being made against him in a manner that can be defined as "preventive protection measure" under German law. A similar method is also implemented in the countries that have adopted the common law system, in terms of measures known as "anti-suit injunctions". Therefore, in terms of ensuring the debtor's right to be heard in the arrest of ships, there is no legal obstacle to imposing a precautionary measure against an arrest order which may be awarded over the ship. For the enforcement of the arrest, an application must be made before "the enforcement office in the territory of the court awarding the order" or to "the enforcement office in the place where the vessel is located" within three working days as of the date on which the arrest order is awarded. As to the enforcement of the arrest, in addition to the measure of prevention from the sailing, as per article 1366 of the TCC, the relevant authorities must be informed and the minutes of arrest must be issued. There is no special regulation under the TCC regarding the liable party for the maintenance costs of the arrested ships. In our opinion, art. 88 para. 2 of the CEB should be taken into account. In the arrest of ships, the scope of arrest includes the ship, its attachments and integral parts, and the income and benefits derived from the operation of the ship. As per art. 1369 para. 2 of the TCC, the arrest can be enforced on the sister ship. For this, the person is who the owner of the sister ship shall be the owner, the demise charterer, time charterer or voyage charterer of the ship in respect of which the maritime claim arose when the claim arose, and also the party liable for the maritime claim shall be the owner of the sister ship when the arrest order is enforced. In the event that the legal entity is being used only for the purpose of harming the claimant and preventing the arrest order, the court may decide to pierce the corporate veil. This being said, it is not possible to arrest the sister ships due to the disputes arising from ownership or possession. The effect of the arrest order is the ship to be temporarily seized, the claim to become due, and the judicial authorities to gain authority for the actions to be taken for the completion of the arrest order provided that there is an agreement concerning jurisdiction or arbitration made regarding the merits of the maritime claim is not made. A ship or a sister ship cannot be re-arrested for the same claim. However, as per art. 1375 of the TCC, provided that the total quantum of security does not exceed the value of the ship, the particular ship in respect of which the maritime claim arose may be re-arrested in the event that the type or amount of the initial security is insufficient, or that the party who has provided the initial security fails or is incapable of fulfilling its debts partially or completely, or that the arrested ship or the deposited first security; is released at the request or approval of the claimant acting on reasonable grounds, or because the claimant failed to take reasonable measures to f the release of the ship or the security. Similarly, another ship that may be subject to arrest for the same maritime claim may be arrested if the type or amount of the previously deposited security is insufficient, or if the provisions of art. 1375 para. 1 subpara. (a) or subpara. (c) shall apply. Likewise, if the ship is released by unlawful means, there is no obstacle to re-apply for an arrest order. In order to ensure the debtor's right to be heard, there are legal ways to oppose the arrest order, such as the objection to be made against the arrest order, the request to be made by the debtor, and the third parties whose interests have been violated for the amendment or lifting of the arrest order in case the circumstances and conditions make the continuation of the enforcement of the arrest unfair, and finally, the release of the ship upon depositing security. Since the jurisdiction as to the arrest of ships is regulated as an exclusive jurisdiction, the debtor and the third party whose interests are violated can raise an objection against the competence of the court. The fact that the conditions set out under art. 1369 of the TCC are not being fulfilled can also be asserted as a reason for the objection. The parties can raise an objection against the security (increase, decrease, type change, or cancellation) which will be determined by the court. In terms of the objections to be raised by the parties in whose absence an arrest order was awarded; prior to the action being filed, the competent court is the court that awarded the arrest; if the action is brought in Turkey, the competent court is the court that will review this file, if the action is brought before the arbitration or in a court abroad, the competent court is the court that awarded the arrest order. In terms of the period and procedure for the objection against the arrest of ships and the review of the objection, art. 265 of the CEB shall apply. However, pursuant to art. 1363 para. 2 and para. 4 of the TCC, an objection can always be made against the security. Also, art. 1369 of the TCC should be taken as a basis for determining when the conditions of arrest should exist. Although there is no clarity in the law, it should be possible to raise an objection against the arrest order due to the change in the circumstances and conditions. On the other hand, it is also possible that the ship to be released upon security being furnished. It is regulated by the lawmaker that the release of the ship upon security is possible in two possibilities. The first of these is the release of the ship by depositing the value of the ship (TCC art. 1370). In fact, the arrest order awarded on the ship is not being technically lifted here, taking into account that security is deposited for an amount equal to the value of the ship, the ship will be physically released despite the fact that the arrest on the ship continues (TCC art. 1370/2). The second possibility is to lift the arrest order on the ship by depositing security (TCC art. 1371). In this case, the temporary legal protection on the ship is completely terminated and the arrest order is shifted to security. It is stipulated that the arrest orders awarded in parallel with the general preliminary injunction orders must be completed within a short period of time. As to the completion of the arrest orders, different possibilities come into question depending on the stage at which the arrest order is awarded. These possibilities can be addressed under separate headings depending on the arrest order being awarded before and after the action and enforcement proceedings and during the enforcement proceeding with judgement. Although the principles regarding the general preliminary injunction order will be applied for the arrest orders as well, the enforcement office that executes the arrest order which was awarded based on a maritime claim pursuant to art. 1354 and art. 1355 of the TCC is competent for the enforcement proceeding initiated as a process that completes the arrest order. The same is valid for the court that granted the arrest application. However, for this, the parties must not have agreed upon a jurisdiction clause or arbitration clause in any relevant contract as to the merits xxxi of the maritime claim. The rule of jurisdiction set forth here is the optional jurisdiction rule. On the other hand, by the special provision set forth under art. 1376 of the TCC, the periods stipulated under art. 264 para. 1 and para. 2 of the CEB, shall be applied as one month for the arrest of ships. Depending on the nature of the maritime claim, the claimant may initiate ordinary enforcement proceedings, foreclosure proceedings, bankruptcy proceedings, or execution or bankruptcy proceedings involving a receivable based on negotiable instruments. Therefore, unlike the ordinary enforcement proceedings, there is no obstacle for the claimant to complete the arrest procedure with the foreclosure proceedings (art. 153 para. (a) of the CEB; art. 1381 of the TCC). In the event that the arrest order is completed through litigation, the competent court, as a rule, is the court prescribed in the second sentence of art. 5 para. 2 of the TCC. However, in our opinion, labor courts should be the competent court for actions arising from the Code of Maritime Labor or contract of services between the seafarers other than the master and their employers or employers' representatives. Likewise, consumer courts should be the competent court for the actions to be brought in cases where one of the parties is a consumer pursuant to art. 83 para. 2 of the Law on the Protection of the Consumer. If an arrest order is awarded over the ship before or during the action regarding the merits of the maritime claim, in terms of the enforcement of the judgement to be given as a result of that action, it is obligatory to comply with the one-month period stipulated in art. 264 para. 3 of the CEB.