Maritime Lawyer

Ship Mortgage Under Turkish Maritime Law

Ship Mortgage Under Turkish Maritime Law

Maritime Law  ATTORNEY BARIS ERKAN CELEBI

I. INTRODUCTION Maritime Law

 

The commercial value of ships and the fact that they are the main subject of maritime law have made them an important element of economic life. On the other hand, due to the high economic value of the ship, it is almost impossible to acquire a ship without credit. Today, almost all ship purchases and constructions are realized through the establishment of credit. Just as credit is an indispensable element of business life, mortgage is the main element in the establishment of credit. In terms of this loan transaction, the most valuable collateral that the creditor can apply for this loan is the ship. For this reason, it is a common practice to pledge the ship as collateral against the receivable. martime law

In our law, ship mortgage is envisaged as a security that can be registered on the ship registered in the registry in order to constitute the guarantee of the receivable. As a matter of fact, Article 1014, paragraph 1 of the Turkish Commercial Code numbered 6102 stipulates that “A mortgage may be established on a ship in order to secure a receivable“. In this sense, a ship mortgage can be defined as a real right that is established on a ship or a share of a ship registered in the registry and authorizes the creditor to receive its receivables first by converting the ship or share into money. Therefore, a ship mortgage authorizes the creditor to receive its receivables from the price of the ship.

If the debtor fails to pay its debt, the mortgaged ship is sold and the creditor’s receivable is paid from the sale price. Under the TCC, the rights of the creditor are regulated separately before and after the due date of the receivable. Within this framework, the mortgaged creditor may collect its receivables from the ship and the values covered by the mortgage, if the receivable becomes due and payable and is not paid. Undoubtedly, the creditor’s method of collecting the receivable is to obtain the receivable through enforcement proceedings, i.e. through foreclosure of the mortgage.

In this study, the subject and scope of ship mortgages and the foreclosure of mortgaged ships through enforcement of the mortgage are discussed. 

 

II. DEFINITION AND ESTABLISHMENT OF SHIP MORTGAGE IN GENERAL

A ship is defined in the law as a floating and not very small vehicle that is allocated for a purpose that requires it to move in water, even if it does not have the ability to move by itself.

A ship mortgage, on the other hand, can be defined as a real right established on a ship or a share of a ship registered in the registry, which authorizes the creditor to receive its receivable first by converting the ship or share into money[1] . In this sense, a mortgage gives the creditor the right to receive its receivables from the mortgaged ship first. A ship mortgage is a real right in rem that is subordinate (fer’î) to the receivable it secures[2] . In the event that the receivable is extinguished due to reasons such as settlement, release, renewal, etc., the mortgage right shall also be extinguished (Art. 1044 TCC)[3] .

For ships registered in the registry, contractual ship pledge can only be established through ship mortgage (Art. 1015 TCC)[4] . Registration is considered to be an obligation for the establishment of a mortgage. However, before the registration of the mortgage, an agreement (mortgage agreement) must be concluded between the parties. The agreement in question is in the nature of an obligatory transaction. With this agreement, the mortgage debtor undertakes to establish a mortgage on the ship in question against the creditor in whose favor the mortgage will be established; in return, the creditor obtains a relative right to establish the mortgage against the debtor owner based on this commitment. The conditions for the validity of this mortgage agreement establishing a relative right are that the agreement must be in writing and the signatures of the parties must be notarized, or instead of notarization, the agreement must be made directly at the ship registry office (Art. 1015/2 TCC).

The establishment of a mortgage is realized through the registration of the mortgage agreement in the registry. In this sense, registration is constitutive[5] . At the same time, a ship mortgage may also be established on a ship acquired in a foreign country and not registered in Turkey by annotating a flag certificate to be obtained from the local Turkish consulate. This annotation shall be deemed as registration.

On the other hand, Article 1015/6 of the TCC stipulates that the owner’s declaration to the registry office and registration in the registry is sufficient for the establishment of a ship mortgage in order to secure the receivables attached to a bearer bond. 

 

III. SUBJECT OF SHIP MORTGAGE

In terms of our law, ship mortgage is subject to the ship registered in the registry, the ship under construction registered in the registry or the shares in such ships6 . Therefore, it is not possible for the usufruct right on the ship’s share, for example, to be subject to ship mortgage. 

Article 931 of TCC No. 6102 defines a ship as a floating and not very small vessel, which is allocated for a purpose that requires it to move in water, even if it does not have the ability to move by itself. Before the TCC No. 6102, the issue of whether a ship is a movable property was controversial in the doctrine[6] . However, with the provision of Article 936 of the TCC No. 6102 stating that “All ships, regardless of whether they are registered in the registry or not, are movable goods in the application of this Law and other laws.”, the hesitations experienced during the old law period in terms of the legal nature of ships have been eliminated. In this sense, the ship is considered as movable property in terms of its legal nature. 

As the ship is a movable property, it should have been subject to the provisions regarding the pledge of movables in terms of being the subject of pledge. However, if the ship is pledged like movables, two important drawbacks arise. The first of these is that the fact that the pledge of the pledged ship is subject to delivery constitutes an obstacle to the use of the ship in maritime trade. Indeed, if the pledged ship is delivered to the creditor, the debtor shipowner will not be able to operate the ship and use it in maritime trade without the ship in his possession. Secondly, if the ship is delivered to the creditor, the creditor will have to bear many expenses and burdens in order to preserve the ship[7] . In order to prevent such inconveniences, our law allows the establishment of a mortgage on the ship without the obligation of delivery in respect of the ships registered in the registry.

A ship mortgage may be established on a completed ship, as well as on a ship under construction. Article 1054 of the TCC provides a special provision on this issue, and within the framework of the aforementioned provision, it is possible to register a mortgage on a ship under construction. However, the legislator has regulated that it is not possible to register a mortgage for the ships that will be below 18 grostons when the construction is completed (TCC Art. 1054/3).

In addition to establishing a mortgage right on the ship, it is also possible to register a mortgage on the ship’s share. As a matter of fact, Art. 1014/3 of the TCC allows the establishment of a mortgage right on the share with the following provision: “The share of a ship can only be limited by a ship mortgage provided that it consists of the share of one of the shareholders who own the ship according to the principles of shared ownership.”[8] .

 

VI. SCOPE OF SHIP MORTGAGE

Articles 862 and 863 of the Turkish Civil Code shall apply to the scope of the mortgage (Art. 1020/1 TCC). Accordingly, the provisions of the Turkish Civil Code regarding mortgages will also be determinative for the determination of the scope of the ship mortgage.

In this context, the mortgage covers the ship[9] , its integral parts and attachments11 . In order to establish a mortgage on a ship, the ship to be mortgaged must be clearly identified in the registry and must be individualized; it is not possible to establish a mortgage to cover the existing ships of a fleet or the ships to be acquired later12

If the appurtenances on which the mortgage is to be established are removed from the ship as a requirement of normal operation or are transferred and removed from the ship before the seizure in favor of the creditor, the mortgage no longer covers them (TCC Art. 1020/2).

The scope of the mortgage includes the ship, its integral parts and appurtenances, as well as the rents related to the ship (Art. 863 of the TCC by reference to Art. 1020/1 of the TCC). According to this provision, in cases where the ship is left to the use of the lessee under a lease agreement, the rents arising from this agreement are included within the scope of the ship mortgage13 . However, it should be noted that the right of the mortgage creditor in terms of ship rent is in question for the rents due during the period from the date of the commencement of the proceedings for the foreclosure of the pledge or the date of the debtor’s bankruptcy until the foreclosure of the ship.

Due to the magnitude of the danger at sea, it is of great importance that the ship mortgage covers the insurance compensation in order to make the ship mortgage a reliable credit instrument14 . For this reason, it is regulated that if the interest of the owner is insured by the owner or someone else in favor of the owner in relation to the matters covered by the ship mortgage, the mortgage shall also cover the insurance compensation (Art. 1022/1 TCC). In order for the mortgage to cover the insurance indemnity, the mortgage must exist at the time of the occurrence of the risk. Therefore, mortgages established after the occurrence of the risk are not taken into consideration. On the other hand, whether the insurance contract was concluded before or after the mortgage is not important in determining the scope of the mortgage.

 

V. MONETIZATION OF SHIP MORTGAGE THROUGH ENFORCEMENT

A. In General

The mortgaged creditor has the right to have the ship, together with the other elements included in the scope of the mortgage, sold by forced execution and to collect its receivable from the sale price, if the receivable becomes due and unpaid (Art. 1014/1 TCC)[10] . In this sense, after the receivable becomes due and payable, the ship mortgage gives the mortgaged creditor the right to demand the foreclosure of the mortgage. The shipowner and third parties who are exposed to the danger of losing their rights or possession of the ship or the things covered by the ship mortgage as a result of forced execution may release the ship from the mortgage by making a payment to the creditor[11] . The creditor may obtain its claim on the elements covered by the ship mortgage only if these elements are sold by way of foreclosure. Maritime Law

The procedure for the foreclosure of mortgage receivables is specifically regulated in the Eighth Chapter of the Fifth Book of the Turkish Commercial Code titled “Special Provisions on Foreclosure”. Therefore, the procedure for monetization of the pledge will be determined within the framework of these provisions[12] .

 

B. Applicable Law and International Jurisdiction in the Monetization of Mortgages

In accordance with the principle of freedom of contract, the applicable law for disputes involving a foreign element may be determined within the scope of the contract between the parties. However, the choice of law regarding the ship mortgage shall be valid for the case before the court or arbitral tribunal where the merits of the claim related to the ship mortgage are heard. Apart from this, Turkish law shall be applied for enforcement proceedings initiated in Turkey in terms of the enforcement procedure for the foreclosure of the mortgage. This is because the enforcement law is a result of the sovereign rights of the state and is a part of the order to seek rights in an expeditious manner[13] . Therefore, it is not possible to apply any other law other than Turkish law in terms of the enforcement procedure. Within this framework, in the event that the judgment obtained from a foreign court on the merits of the mortgage receivable is enforced in Turkey, the provisions regarding enforcement under the TCC and the EBL will be applicable[14] .Maritime Law

In disputes with foreign elements where the parties do not choose the law in the judicial process regarding the merits of the mortgage claim, the applicable law will be determined by the court to which the judicial process is applied according to the lex fori principle. In this context, in cases filed in Turkey, the law of the country of origin will be applied for ship mortgages within the scope of Art. 22 of the Law of Civil Procedure entitled “means of transportation”. In this case, in terms of the merits of the claim, the applicable law for registered ships[15] in terms of ship mortgage is the law of the place of registration where the ship is registered within the framework of Article 22/2[16] .Maritime Law

In line with the principle of freedom of contract for disputes involving a foreign element, the parties may also agree on the competent court within the framework of Article 47 of the Law on Civil Procedure[17] . This jurisdiction agreement will be related to the jurisdiction of the court or arbitral tribunal where the merits of the ship mortgage claim are heard. However, for ships registered in the Turkish registry, it is not possible for the parties to submit to the jurisdiction of a foreign court regarding the foreclosure of the ship mortgage in Turkey. This is because it is not possible to eliminate the jurisdiction of Turkish courts by concluding a jurisdiction agreement in favor of a foreign court in matters falling within the scope of enforcement law[18] .

 

In cases where such a choice is not made, in the application to the Turkish Courts, the court will first determine its jurisdiction in accordance with the jurisdictional rules of domestic law within the framework of the provisions of Article 40 et seq. of the Law on Civil Procedure, since there is no special regulation in the Law on Civil Procedure in terms of ship mortgages.

1. Proceedings by way of Foreclosure of Mortgage

In order for the mortgage creditor to redeem the mortgage right on the ship, it is required to pursue the foreclosure of the mortgage in accordance with Article 1381 of the TCC[19][20] .  

The enforcement proceedings through foreclosure of the mortgage are divided into two as enforcement proceedings with judgment (Art. 149-149a, 150h of the EBL) and enforcement proceedings without judgment (Art. 149b-150a). Pursuant to Article 149 of the BEC, “If the enforcement officer understands that the submitted contract table contains an unconditional acknowledgment of a money debt and that the receivable is due“, the enforcement officer may send an execution order to the debtor and demand payment of the receivable within 30 days[21] . As stated in the second paragraph of the article, the objection does not stop the proceedings. In order for the enforcement proceedings to be suspended, the debtor must submit a court order from the enforcement court for the suspension of execution or pay the debt within 30 days; otherwise, the enforcement proceedings become final and the creditor may request the sale of the vessel. Therefore, the enforcement order mentioned in the relevant articles corresponds to the enforcement of the receivable by judgment enforcement and the payment order corresponds to the enforcement of the receivable by execution without judgment. In the request for suspension of execution, the provisions of Article 33 of the EBL shall apply. However, pursuant to Article 864 of the Civil Code, the debtor cannot object to the statute of limitations, since the receivables subject to the proceedings secured by the pledge of immovable property are not time-barred[22] .Maritime Law

As it is understood from the article, a court judgment is not a requirement for judicial proceedings by way of foreclosure of the mortgage; it is sufficient for the creditor to submit a “contract table” and for the mortgage agreement in this contract table to contain an unconditional debt assertion[23] . Moreover, pursuant to Article 150/ı of the EBL, in the case of mortgaged receivables of credit institutions, it is stated that in the event that certain conditions are met, an enforcement order may be sent to the debtor based on documents that do not contain an unconditional unconditional assertion of money debt[24] . The definition of the contract table is defined in Article 148 as “an official copy of the contract table of the mortgage document issued by the land registry office”; therefore, it will also be issued by the ship registry for ship mortgages. “Mortgage contract table” is an official deed issued pursuant to Article 26 of the Land Registry Law and contains the mortgage agreement[25] .

Finally, in order to initiate the proceedings, the receivable must be due and this must be understood from the text of the mortgage agreement (or the judgment referring to the mortgage agreement)[26]

2. Non-judicial Proceedings Through Monetization of Mortgage

Article 149/b of the EBL stipulates that a payment order shall be sent to the debtor “for the receivables due other than those stipulated in Article 149” and that the provisions of Article 60 et seq. of the EBL shall be applied by analogy in this payment order. However, the payment period given to the debtor in the proceeding without judgment through foreclosure of the mortgage is not 7 days, but 30 days. Article 149, except for the cases written in Article 149, refers to the cases where there is no unconditional acknowledgment of debt. 

Therefore, if the receivable subject to a mortgage agreement that does not contain an unconditional acknowledgment of debt is due, the enforcement director may send a payment order to the debtor and give a deadline to pay the debt within 30 days. If the debtor does not object to the payment order within 7 days, the debtor is obliged to pay the debt within 30 days. If the debtor does not object to the payment order within 7 days, the proceeding becomes final (Article 150 of the EBL). However, the objection is related to the debt and the pledge right cannot be subject to objection (Article 150 of the EBL).

The lawsuit to be filed against the objection to the payment order is possible through the annulment of objection lawsuit to be filed in the general courts pursuant to Article 67 of the

EBL, or the removal of objection lawsuit to be filed in the execution court pursuant to Articles 68-71 of the EBL, with the reference of Article 150/a of the EBL.

3. The Concept of Unconditional Debt Assumption

The concept of “unconditional assertion of debt” and the due date of the receivable will be determined according to the meaning of the mortgage agreement ex officio examination of the execution manager[27] . The main distinctive difference between proceedings with judgment and proceedings without judgment is whether the mortgage agreement contains an “unconditional assertion of debt” or not. If the execution manager determines that the mortgage agreement does not contain an “unconditional repudiation of debt”, he may only send a payment order to the debtor, not an execution order33 .

What should be understood from the concept of “unconditional assertion of debt” is whether the mortgage expresses a definite and due receivable. In practice, mortgages expressing a definite receivable are generally defined in Article 851 of the Civil Code, which states that an immovable pledge (principal mortgage or fixed mortgage) may be established for the receivable whose amount is shown in Turkish Liras; however, if the amount of the receivable is not certain, it is stated that the parties may determine the upper limit to be secured by the immovable to meet all the claims of the creditor (upper limit mortgage). In this case, the upper limit secured by the immovable shown in the upper limit mortgage includes the compulsory expenses, follow-up expenses and interests listed in Articles 875 and 876 of the TMK in addition to the main receivable; however, since these ancillary receivables are receivables that cannot be determined with certainty at the date of the mortgage agreement

 

and are likely to arise, as a rule, the upper limit mortgage does not unconditionally imply a debt[28] .

In the case of a principal mortgage, since the amount of the mortgage is established to secure a certain principal receivable and does not cover possible ancillary receivables, as a rule, the principal mortgage contains an unconditional assertion of debt[29] . However, since a principal mortgage may also be established for a receivable whose amount is certain but which may arise, such as a contingent receivable, in such cases, the principal mortgage does not contain an unconditional debt. Likewise, there is no obstacle to the establishment of an upper limit mortgage for a certain amount of principal receivable, and in such cases, the upper limit mortgage may express an unconditional debt[30] .

Therefore, the executive director, regardless of the type of mortgage, will examine the mortgage agreement and other documents submitted ex officio, and if he/she determines that the mortgage agreement expresses an unconditional acknowledgment of debt, he/she will send an execution order to the debtor, otherwise he/she will send a payment order to the debtor.

4. Request for Sale and Monetization Procedure

Pursuant to the reference to Article 153/a, f.3 of the EBL, the process after the finalization of the proceedings in the proceedings with and without judgment through foreclosure of the mortgage is subject to the joint provisions regulated between Articles 150/e-153/a of the EBL. The sale for the foreclosure of the mortgage may be requested within 1 year after the expiry of the 30-day payment period given to the debtor, following the notification of the enforcement order or payment order; otherwise, the enforcement proceeding shall be dismissed (Art. 150/e of the EBL). However, pursuant to Article 153/a, f.3 of the EBL, this period is applied as 3 months for ships. Subsequently, the ship is appraised and the provisions of Article 92 et seq. of the EBL regarding the sale of immovable property are applied by analogy[31] (EBL Article 150/f-g).

Article 1384 of the TCC stipulates that the sale of ships registered in a foreign registry shall be notified to the consulate of the country of registration[32] . Furthermore, Article 1386 of the TCC allows for the sale to be requested prematurely, before the receivable becomes due, in cases where the value of the ship rapidly decreases or poses a danger to environmental safety[33] . In this case, Article 1387, by departing from the provisions on the sale of immovable property, also allows for the sale of the ship by negotiated sale40 .

 

VI. CONCLUSION

In terms of the ship that constitutes the subject matter of the mortgage right, a ship mortgage is a real right that is established on a ship or a share of a ship registered in the ship mortgage registry and authorizes the creditor to receive its receivable primarily by converting the ship or share into money. This right covers the ship, its integral parts, its appurtenances and, if any, the rents related to the ship. 

A ship mortgage is established by registering a written mortgage agreement between the parties in the ship registry. For foreign ships that are not registered in Turkey, a ship mortgage may also be established by annotating a flag certificate obtained from the local Turkish consulate.

Although ships are considered movable in the sense of property law due to their ability to move, the procedure for the foreclosure of mortgaged ships is subject to the provisions on the foreclosure of immovable property due to the economic value, commercial importance and difficulty of preservation of the ships. Again, due to their economic value, ships are one of the most important collaterals to be provided by the ship owner for the loan. For this reason, ship mortgages are common in practice, and the issue of foreclosure of ship mortgages is therefore important.

In disputes involving a foreign element in terms of ship mortgages, the parties may make a choice of law and jurisdiction agreement regarding the law applicable to the merits of the claim and the competent court. However, since the issue of enforcement is a consequence of the sovereign rights of the state and is a part of the order to seek rights in an expeditious manner, it is not possible to make such an agreement in terms of the process of foreclosure of the mortgage.

Under Turkish law, the foreclosure of a ship mortgage is possible through enforcement with and without judgment. For the enforcement proceedings by way of foreclosure of the mortgage, a copy of the mortgage agreement on the ship in question approved by the ship registry office is required. In addition, an unconditional acknowledgment of debt and the fact that the debt is due must be understood from this mortgage agreement. If these conditions are met, the enforcement director sends an enforcement order to the debtor and requests payment of the receivable within 30 days. If the debtor does not submit a court decision on the suspension of execution from the enforcement court and does not pay the debt within 30 days, the creditor may request the sale of the ship.

If the mortgage agreement does not unconditionally imply an unconditional acknowledgment of debt, then the way the creditor can apply is the execution proceeding without judgment through the foreclosure of the mortgage. In this case, the enforcement director sends a payment order to the debtor and demands payment of the receivable within 30 days. If the debtor does not object to the payment order within 7 days, he/she is obliged to pay the debt within 30 days. Otherwise, the proceeding becomes final and the creditor may request the sale of the ship.

The sale for the foreclosure of the mortgage may be requested within 1 year after the expiry of the 30-day payment period given to the debtor, following the notification of the enforcement order or payment order; otherwise, the proceedings shall be dismissed. However, pursuant to Article 153/a, f.3 of the EBL, this period is applied as 3 months for ships. After the sale is requested, the ship shall be appraised and the provisions of Article 92 et seq. of the EBL regarding the sale of immovable property shall be applied by analogy.

SOURCE

AKÇURA KARAMAN, Tuba, Ship and Aircraft Mortgage and Motor Vehicle Pledge,

Istanbul 2015.

ATAMER, Kerim, The Legal Basis of Ship and Aircraft Mortgages, Istanbul 2012

ATAMER, Kerim, Enforcement in Maritime Law According to the Draft Turkish Commercial Code, Istanbul 2006

BUDAK, Ali Cem, Follow-up through Monetization of Mortgage, Istanbul 2009

ÇELİKEL, Aysel / ERDEM, Bahadır, Private International Law, Istanbul 2016

FRANKO, Adil / İZVEREN, Nisim / ÇALIK, Ahmet, Maritime Trade Law, Ankara,

Batider, 1994

HELVACI, İlhan, According to the Turkish Civil Code, the Prohibition of Lex Commissoria (Appropriation by the Executor), Istanbul 1997

KALPSÜZ, Turgut, Ship Pledge, Ankara 2004

KANER, İnci Deniz,  Maritime Trade Law, Istanbul 2013

KENDER, Rayegan/ÇETİNGİL, Ergon /YAZICIOĞLU, Emine, Maritime Commercial

Law, C.I, Istanbul, 2014

KURU, Baki  Execution and Bankruptcy Law Handbook, Ankara 2013

OKAY, Sami,  Maritime Trade Law I, Istanbul, Istanbul University Faculty of Law Yay. No. 335, 1970

ÖNDER, Salih, Gemi Kira Sözleşmesi, Unpublished PhD Thesis, Ankara 2016

SÖZER, Bülent, Maritime Trade Law I, Istanbul 2014

ŞANLI, Cemal, Private International Law, Istanbul 2014 TEKİL, Fahiman, Law of the Sea, Istanbul 1998

 

[1] KALPSÜZ, Turgut, Ship Pledge, Ankara 2004, pp. 61, 63; ÇAĞA, Tahir /KENDER,Rageyan, Maritime Trade Law I, Istanbul 2005, p. 113; OKAY, Sami, Maritime Trade Law I, Istanbul, Istanbul University Faculty of Law Yay. No. 335, 1970, p. 192.

[2] KALPSÜZ, p. 60 et seq.; AKÇURA KARAMAN, Tuba, Ship and Aircraft Mortgage and Motor Vehicle

Pledge, Istanbul 2015, p. 49 et seq.

[3] The exceptions to this rule are Art. 1038/6, 1043, 1044/3, 1046 et seq. of the TCC. See also SÖZER, Bülent, Maritime Trade Law I, Istanbul 2014, p. 119.

[4] KENDER,Rayegan /ÇETİNGİL,Ergon/YAZICIOĞLU,Emine, Maritime Commercial Law, C.I, Istanbul 2014, p. 79; SÖZER, p. 120.

[5] ÇAĞA/KENDER,, p. 114; KALPSÜZ, p. 70; KENDER/ÇETİNGİL/ YAZICIOĞLU, p. 80; AKÇURA KARAMAN,, p. 156; ATAMER, Kerim, Hukuksal Temelleri Vessel ve Uçak İpotesinin Hukuksal Temelleri (shortly “Mortgage”), İstanbul 2012, p. 232; SÖZER, p. 124. 6 AKÇURA KARAMAN, p.237 – 238.

[6] The source of this debate was the provision of Article 23/4,c.1 of the EBL, which makes ships subject to the provisions on the enforcement of foreclosed immovables. The relevant provision is taken from Article 54 of the Swiss Federal Law on Ship Registry. However, the reason for such a provision in Swiss Law is that it is not possible for maritime vessels to reach Switzerland, which is a land country. Therefore, it is not possible to actually seize these vessels within the enforcement procedure in Switzerland. However, considering that Turkey is surrounded by seas on three sides, there is no need to include such a coercive provision in Turkish law. For detailed information on this issue, see ATAMER, Kerim, Enforced Execution in Maritime Law According to the Draft Turkish Commercial Code (shortly “Enforced Execution”), Istanbul 2006, p. 25 et seq.

[7] For detailed information on this subject, see KALPSÜZ, p. 40; ÇAĞA/KENDER, p. 112; KENDER, /ÇETİNGİL, /YAZICIOĞLU, p78 – 79; SÖZER, p. 119 – 120.

[8] For detailed information on the pledge right to be established on shares, see AKÇURA KARAMAN, p. 246 et seq.

[9] As stated above, it is possible to establish mortgages on ship shares and ships under construction. However, it is not possible to establish a ship mortgage on an object that does not qualify as a ship within the meaning of Art. 931 TCC. 

[10] It should be noted that agreements that give the mortgaged creditor the right to obtain the ownership of the ship or to put it up for sale by any means other than forced execution before the debt becomes due are invalid within the framework of the “Lex Commissoria Prohibition”. For detailed information on the “Lex Commissoria Prohibition”, see HELVACI, İlhan, Lex Commissoria Prohibition According to the Turkish Civil Code, Istanbul 1997. See also KALPSÜZ, p. 144; AKÇURA KARAMAN, p. 393 et seq.

[11] KALPSÜZ, p. 143; ÇAĞA/KENDER, p. 120; AKÇURA KARAMAN, p. 382; SÖZER, p. 149; ATAMER,

Mortgage, p. 449.

[12] ATAMER, Forced Execution, p. 335.

[13] ŞANLI, Cemal, Private International Law, Istanbul 2014, p. 402.

[14] However, there is no obstacle to the sale of a ship registered in the Turkish registry abroad by way of enforcement. In this case, the enforcement procedure to be applied will naturally be subject to the law of the country where the sale is made. As a matter of fact, Article 1350 of the TCC stipulates that “The seizure of a ship by injunction or execution, its sale by way of enforcement, the consequences of such sale, including the transfer of ownership, and all other transactions and dispositions relating to enforcement shall be governed by the law of the country where the ship is located at the time of such transactions and dispositions.”  Maritime Law

 

[15] If the ship is not registered, the law of the place where the port of mooring is located shall apply.

[16] ATAMER, Mortgage, p. 118; ÇELİKEL/ ERDEM, p. 326; This issue is seen as an exception to the “lex rei sitae” rule. ŞANLI, p. 229; ÇELİKEL, Aysel / ERDEM, Bahadır, Private International Law, Istanbul 2016, p. 326.

[17] ÇELİKEL/ ERDEM, p. 584; ŞANLI, p. 381.

[18] ŞANLI, p. 402; Judge H.G.K., 6.5.1998, E. 1998/12-287, K. 1998/325, (www.kazanci.comaccessed on 04.01.2018).

[19] On the other hand, an exception has been made to the general rule in the foreclosure of ship mortgages, and Article 1378 of the TCC stipulatesthat “Even if there is a contractual or legal pledge right on the ship, the creditor may proceed through bankruptcy.” Pursuant to this provision, the creditor may resort to bankruptcy proceedings instead of proceedings through foreclosure of the pledge.

[20] Article 153/a, f.2 of the Enforcement and Bankruptcy Law No. 200425 states that “The provisions regarding the foreclosure of mortgages shall also apply to the foreclosure of ship mortgages. In these provisions, the term “immovable” refers to ships registered in Turkey or abroad; the term “land registry” refers to the ship registry and the term “mortgage” refers to ship mortgages. In the foreclosure of ship mortgages, the execution office where the ship is sequestrated or where the ship is registered in the registry is authorized.” This provision prevents the application of the provisions regarding the foreclosure of pledges on movables in ship mortgages regarding foreign ships under the Law No. 6762. In addition, Article 153/a, f.3 of the EBL states that the foreclosure of ship mortgages is subject to the joint provisions regarding the foreclosure of movable pledges and mortgages, with the provision “The joint provisions regarding the foreclosure of movable pledges and mortgages shall also apply to the foreclosure of pledge rights on ships.

[21] , Baki, Handbook of Enforcement and Bankruptcy Law, Ankara 2013, pp.1008-1009

[22] KURU, p.1011; BUDAK, p.155

[23] KURU, p.1009-1010; AKÇURA KARAMAN, p. 479-480; BUDAK, Ali Cem, Follow-up through

Monetization of Mortgage, Istanbul 2009, p.149

[24] For details, see KURU, p. 1013; AKÇURA KARAMAN, p. 481; BUDAK, p. 159-177

[25] KURU, p.995; BUDAK, p.142

[26] , p.1009-1010; BUDAK, p.153

[27] KURU, p. 1011; BUDAK, pp. 91, 152-153. 33      , p. 1001; BUDAK, pp. 91-92.

[28] BUDAK, pp.91-92; see also KURU, p.996.

[29] BUDAK, pp.91-93; see also KURU, p.996.

[30] BUDAK, p.92-93

[31] On the sale of immovable property, see KURU, p.642 et seq.

[32] ATAMER, Enforcement, p. 388; AKÇURA KARAMAN, p. 481.

[33] ATAMER, Enforcement, p. 379 et seq.; AKÇURA KARAMAN, p. 482. 40 ATAMER, Enforcement, p. 392; AKÇURA KARAMAN, p. 482.

 

ÇAĞA/KENDER, p. 115; KALPSÜZ, p. 87; OKAY, p. 200; KENDER/ÇETİNGİL/ YAZICIOĞLU,

81; FRANKO,Adil/İZVEREN,Nisim/ÇALIK,Ahmet, Maritime Trade Law, Ankara, BATİDER, 1994, p. 80; TEKİL,Fahiman, Maritime Law, Istanbul 1998, p. 122; KANER,İnci Deniz, Maritime Trade Law, Istanbul 2013, p. 56 – 57; AKÇURA KARAMAN, p. 237; ATAMER, Mortgage, p. 313; SÖZER, p. 128.

KALPSÜZ, p. 87; SÖZER, p. 128.

For detailed information on what should be understood from ship lease agreements, see ÖNDER, Salih, Gemi Kira Sözleşmesi, Unpublished PhD Thesis, Ankara 2016, p. 3 et seq. 14 KENDER/ÇETİNGİL/ YAZICIOĞLU,82.

Maritime La