May 1, 2015

The Validity of Charterparty Terms Against A Turkish B/L Holder

It is a well established fact that if the bill of lading is making a reference to a charterparty with the condition that the reference expressly contains the dispute resolution clause (i.e. all terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause/ Dispute Resolution Clause, are herewith incorporated), the bill of lading holders will also be bound with this stipulation. However, according to the new Commercial Code of Turkey this may not be the case necessarily.

According to the Article 1237/3 of the Commercial Code, clauses of the charterparty can only be used against a bill of lading holder/ consignee, if a copy of the charterparty has been attached to the bill of lading during its delivery to the holder.

It seems not realistic and practical, but it is a fact, we thought that you need to know it.

There is another interesting article within the same code; according to Article 1359, if there is no binding agreement between the parties as to the resolution of a dispute for a maritime claim (this term has the same scope with Arrest Conven­tion, 1999, Art.1.1), then the court which has decided for the precautionary measure (i.e. arrest) will also have competency and jurisdiction for the case in respect of the merits.

As you will notice Articles 1237/3 and 1359 are somehow coupled, since one determines how a dispute resolution clause for a Turkish bill of lading holder/ consignee will be valid and the other clause sets Turkish jurisdiction, if the condition of Art.1237/3 is not fulfilled and a Turkish Court arrests a vessel for the cargo claim.

Prof. Dr. Fehmi Ulgener

We are grateful to Professor. Dr. Fehmi Ulgener of Ulgener Legal Consultants for this article which has also been published in their newsletter, The Bosphorus Online.

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