CHANGES TO RULES ON ARREST OF SHIPS – MARITIME CLAIMS AND RIGHT OF ARREST
Regulations on the arrest of ships were amended by the Commercial Code 6102, which entered into force on July 1 2012. Most of the new provisions regarding the arrest of ships in the code were taken from the International Convention on Arrest of Ships 1999. Prior to the 2012 amendments, the code had no separate rule regarding the arrest of ships or maritime claims.
Maritime claims and right of arrest
Maritime claims are divided into 22 categories under Article 1352 of the Commercial Code. The code entitles a claimant to seek the right of arrest to secure a maritime claim or claims that arise from general average, towage, pilotage, salvage operations, bunker supply or others which are listed under Article 1352.
‘Arrest’ means the detention, restriction or removal of a ship by order of a court to secure a maritime claim. The code allows the arrest of a ship via precautionary attachment only in respect of maritime claims.
A ship may be arrested by a court if the court has jurisdiction to do so. Precautionary attachment applications for the arrest of ships with foreign flags should be made to the court where the ship is anchored, moored, berthed or docked. In addition to the authorised courts, a precautionary attachment application for ships with a Turkish flag can be made to a court where the ship is registered if it is registered with the Turkish Ship’s Registry. If a ship is registered with a private registry, a precautionary application should be made to a court where the charterer resides.
If a precautionary attachment application for the arrest of a ship is made after a case begins, the application should be made to the court where the principal case is being heard. Further, if a case has begun before an arbitral tribunal or a court in another state, an application to arrest a ship can be made before the court with jurisdiction.
Objections may be filed to precautionary attachment decisions made in the absence of the counterparty to which the precautionary attachment is applied. The court which decided on the precautionary attachment before initiating a case is also authorised to hear the objection. If the case was initiated in a Turkish court, the relevant court can examine and decide on the objection.
However, if the case was initiated before an arbitral tribunal or a court in another state, the court which decided on the precautionary attachment is authorised to decide on the objection.
An arresting party must provide 10,000 special drawing rights (SDRs) as counter-security to arrest a ship in Turkey. In the case of wrongful arrest, the owner of an arrested ship may suffer a financial loss of more than 10,000 SDRs. Therefore, the owner is entitled to demand that the court increase the counter-security amount. The court has absolute discretion to increase the counter-security amount after considering all arguments. If the counter-security amount is increased, the court will grant the creditor additional time to provide the difference. If the increased security is not provided within the timeframe specified by the court, the precautionary attachment decision will be cancelled ex officio.
Following the arrest of a ship being granted by a court, the claimant must execute the decision with AUTHOR Emre Çakın the relevant enforcement office within three working days of the date of the arrest decision. The arrest decision should be implemented by the authorised enforcement office immediately. All ships arrested must be protected by the enforcement officer whatever their flag and registry. After the decision has been executed, the master, owner, disponent owner or a representative thereof of the ship subject to arrest will be notified of the arrest due to the precautionary attachment.
A ship subject to arrest will be released if a sufficient security – determined by the court – is deposited.
The amendments to the regulations on the arrest of ships mean that the Commercial Code is consistent with the International Convention on Arrest of Ships. The right to execute a precautionary attachment as a result of a maritime claim provides a maritime claim creditor with greater security compared to that under the previous version of the code. The amendments aim to maintain the balance of legal benefit between the owner of a ship and the creditor by regulating the numerous clauses regarding maritime claims for certain receivables.
Further, the procedure for objection is also beneficial. Granting jurisdiction to hear the objection against precautionary attachment to the court or arbitral tribunal assessing the merits of the case prevents the extension of the objection period.
Although precautionary attachment is accepted as an interim measure only, it is still advantageous for creditors, as it allows them to collect their receivables promptly.