This was an appeal from the judgment of the Commercial Court (5 November 2015, 2014/1264-2015/430).

The plaintiff insurer paid TRY 3,943.33 to its insured under a cargo policy. The plaintiff then sought to recover this amount plus interest from the defendant pursuant to art 1472 of the Turkish Commercial Code (TCC) and art 1178 of the TCC [which is based on art 3.2 of the Hague Rules, art 3.2 of the Hague-Visby Rules, and art 4.2 of the Hamburg Rules - although Türkiye is only a State Party to the Hague Rules, the TCC incorporates a set of rules which purport to adopt elements of the Hague-Visby Rules and the Hamburg Rules], arguing that the defendant carrier was liable for cargo damage. In particular, the plaintiff argued that the cargo was delivered to the carrier in whole and undamaged condition; however, it was determined and recorded during the delivery of the goods to the consignee that they were in a wet and damaged condition.

The defendant claimed that a notice of damage was not provided under art 1185 of the TCC [which is based on art 3.6 of the Hague-Visby Rules and art 19 of Hamburg Rules - although Türkiye is only a State Party to the Hague Rules, the TCC incorporates provisions that purport to adopt elements of the Hague-Visby and the Hamburg Rules]. The defendant further argued that the shipper should be held responsible if the damage occurred during the packaging and stowing operation.

The Court of first instance observed that the carrier is under an obligation to supply a cargoworthy container. Where this obligation is violated, the carrier is liable for the damage and loss arising from the uncargoworthiness of the container. The Court determined that the insured goods - faucet parts and bathroom accessories - which were soaked, as a result of which they were damaged and rusted in places, were no longer fit for purpose and could not be traded commercially. The container floor was also unsuitable, as stated in the expert report. The Court further found that the cargo damage, including the salvage charges, amounted to USD 2,197.80. The Court of first instance referred to art 1239.2 of the TCC [which is based on art 16.2 of the Hamburg Rules - although Türkiye is only a State Party to the Hague Rules, the TCC incorporates a set of rules which purport to adopt elements of the Hamburg Rules], which provides that:

If the carrier or other person issuing the bill of lading on his behalf fails to note the apparent condition of the goods, he is deemed to have noted on the bill of lading that the goods were in apparent good condition.

Concerning the article above, the Court observed that since the bill of lading did not include any note regarding the apparent condition of the goods, it should be deemed that the goods and container were loaded on the board of the ship in apparently good condition.

The Court of first instance found that the invoice value of the damaged goods was USD 2,585.64, the salvage charges were USD 387,84, and the loss amount was USD 2,197.80, as per the expert report. The Court referred to art 1186 of the TCC [which is based on 4.5.a of the Hague-Visby Rules - although Türkiye is only a State Party to the Hague Rules, the TCC incorporates a set of rules which purport to adopt elements of the Hague-Visby Rules], which provides that the carrier shall not be liable for any loss or damage to goods exceeding the equivalent of 666.67 Special Drawing Rights (SDRs) per package or unit, or 2 SDRs per kilo of the gross weight of the goods unless the nature and value of the goods are declared by the shipper before shipment and inserted into the bills of lading. Accordingly, the Court observed that the plaintiff stated that the gross weight of the goods was 305 kg, the SDR was TRY 3.98 at the time of judgment, and the maximum limit was TRY 4,866.33, which was higher than the damage amount. Consequently, the Court held that the plaintiff insurer was entitled to take a recourse action after settling it with the insured under art 1472 of the TCC.

The defendant appealed to the Supreme Court of Appeal.

Held: Appeal dismissed. The judgment of the Court of first instance is upheld in favour of the plaintiff.