SHIP MORTGAGE IN TURKISH MARITIME LAW
Maritime Law plays a pivotal role in Turkey’s economy, with ships being central to commercial activities. Acquiring ships usually involves credit arrangements, with mortgages serving as primary security for such loans. This article delves into the intricacies of ship mortgages in Turkish law, highlighting the legal frameworks and processes involved.
What Constitutes a Ship Mortgage?
A ship mortgage is a legal security registered against a ship to secure a receivable. According to the Turkish Commercial Code (TCC), it’s a real right established on registered ships or shares thereof, providing creditors with priority in receivable recovery by monetizing the ship.
Key Legal Provisions for Ship Mortgage
Legal Basis:
The TCC stipulates that a mortgage can secure receivables on registered ships, defining ship mortgages as rights allowing creditors to recover debts through the sale of the ship.
Establishment and Registration:
For a ship mortgage to be valid, it must be registered in the Ship Registry. This involves a written mortgage agreement between the creditor and the debtor, with registration constituting the mortgage’s establishment. The registration process is usually pursued by Turkish maritime lawyers.
Scope and Coverage:
The mortgage covers the ship, integral parts, attachments, and related rents. Interestingly, ships under construction can also be mortgaged, offering financial flexibility for shipbuilders and owners.
Foreclosure Process:
Should a debtor default, the creditor has the right to initiate foreclosure, selling the mortgaged ship through enforcement proceedings to recover the owed amounts.
Navigating Ship Mortgage Registration
The process requires a mortgage agreement, mandating notarized signatures or direct registry office execution. This agreement, once registered, legally establishes the mortgage. Notably, for foreign ships not registered in Turkey, a flag certificate annotated by the local Turkish consulate suffices for mortgage establishment.
Foreclosure of Mortgaged Ships
Foreclosure is a crucial aspect, allowing creditors to recover debts by selling the ship. The TCC outlines specific rights for creditors both pre and post-due date of the receivable, emphasizing the importance of legal proceedings in debt recovery. Turkish maritime lawyers handle the legal process of foreclosure of mortgaged ships and liquidation of foreclosed ships.
Legal Representation and Enforcement
Securing competent legal representation is essential for navigating the complexities of ship mortgages in Turkey. A Turkish maritime lawyer can provide invaluable guidance, from mortgage registration to foreclosure and enforcement. Turkish maritime lawyer Baris Erkan Celebi and his Turkish maritime law firm offer legal services in various areas of maritime law including ship mortgage, ship-building contracts, ship purchases and yacht registrations.
Conclusion
Ship mortgages in Turkish law represent a critical mechanism for financing ship acquisitions and constructions in Turkey. With detailed legal frameworks governing these processes, understanding your rights and obligations as either a creditor or debtor is paramount. Seeking advice from a seasoned Turkish maritime lawyer can ensure compliance and protect your interests in maritime transactions.
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