This was an appeal against the Commercial Court of First Instance’s response to the Supreme Court of Appeal’s reversal decision (19 December 2013, E:2011/411, K:2013/331; 27 March 2015, E:2014/7243, K:2015/4347).

The case concerned a claim for compensation for losses incurred due to the fire aboard the defendant’s ro-ro vessel, UND Adriyatik, which led to the total loss of the plaintiff's loaded trailers and tractors during a voyage from Pendik/Istanbul Port, Türkiye, to Trieste, Italy.

The plaintiff claimed that on 6 February 2008, a fire broke out on the UND Adriyatik off the coast of Croatia. The fire resulted in the total loss of 11 trailers and tractors loaded on the vessel. According to a report by the Venice Port Authority’s Coast Guard Unit, despite all valves being opened, the fire suppression system failed. Additionally, the water pumps necessary to draw seawater did not function, preventing the fire suppression system from activating. The plaintiff argued that the vessel was unsuitable for carrying the cargo, navigating, and withstanding ordinary sea perils, which demonstrated its unseaworthiness. Under the Turkish Commercial Code (TCC No 6762), if the damage from a fire is due to the initial unseaworthiness of the vessel, the carrier is clearly at fault and liable. The plaintiff sought compensation totalling EUR 220,000 for the destroyed vehicles, the freight charge of EUR 25,557, and a profit loss of EUR 82,500 calculated from the date of the incident to the date of the claim, totalling approximately TRY 641,351,435 with interest while reserving the right to claim any additional damages.

The defendant argued that under art 1062/2 of the TCC [which is based on Article 4.2.b of the Hague Rules], the carrier is not absolutely liable for damages resulting from a fire that does not stem from the carrier's personal fault. The only case in which the carrier could be held liable for fire-related damages is if the fire was caused by initial unseaworthiness, and it is the responsibility of the claimant to prove a causal link between the initial unseaworthiness and the damage. The defendant claimed that it was clear the fire did not result from any initial unseaworthiness of the vessel, asserting that the vessel was suitable for the voyage at the start of the journey, as evidenced by the seaworthiness certificate issued by the Tuzla Port Authority on 3 February 2008. Despite allegations from the plaintiff that the vessel's fire system failed to operate, records and inspection reports submitted to the Court demonstrated that the vessel was equipped with a fire safety system compliant with fire construction and safety regulations. If held liable, the defendant asserted that the limitation of liability provisions under the LLMC 1976 should apply, noting that under art 11 of the Convention, the defendant has the right to establish a limitation fund. The defendant requested dismissal of the lawsuit, and if this argument was not accepted, that a limitation fund be established in accordance with the LLMC 1976 to address any claims, or alternatively, that liability be limited to the vessel and freight under art 948 of the TCC if the provisions of the LLMC 1976 were not applied.

The Court of first instance held that the cause of the fire aboard the UND Adriyatik could not be pinpointed. Although the ship’s technical components and firefighting gear were deemed compliant, the Court emphasised that proving seaworthiness involves more than presenting documents at the start of the journey. Given the cargo was fuel-loaded vehicles, a higher standard of safety precautions was necessary. The judgment highlighted failures in crew preparedness and procedural inadequacies during the emergency, noted by the absence of logs and evident panic among the crew, which contributed significantly to the management failure of the fire. The court stated the carrier was responsible for proving the adequacy of precautions and crew competence as per arts 1019/2 and 1062/2 of the TCC based on Articles 4.1 and 4.2.b of the Hague Rules]. Despite the carrier presenting international competency certificates and other related documents, these were considered inadequate to negate the presumption of initial unseaworthiness. While acknowledging that the carrier’s liability might be limited under the LLMC 1976, the Court noted that this case did not allow for the establishment of a limitation fund. Consequently, the Court partially upheld the claims, ordering the carrier to pay TRY 430,144.00 with interest. However, it rejected claims related to freight charges and lost profits due to insufficient evidence.

The decision was appealed by the plaintiff.

The Supreme Court of Appeal examined the differing expert opinions from various reports, noting that despite the ship's compliance with international and national safety norms, the crew's ability to handle emergencies was deemed insufficient. The Court emphasised the importance of arts 1061 and 1062 of the TCC [based on arts 3.2 and 4.2 of the Hague Rules], which outline the carrier’s obligations and potential exemptions from liability. Despite the technical and administrative documentation presented by the defendant to prove the ship’s suitability for the voyage, the reports indicated that the crew’s actual response to the fire was inadequate, rendering the ship unseaworthy at the voyage’s onset.

Additionally, the Supreme Court of Appeal addressed the issue of freight charges, where the plaintiff argued for a refund of EUR 25,557 in freight payments for the destroyed vehicles, citing that despite payment, the cargo was lost and services were unfulfilled. The defendant contested this, leading the court to cite art 1072 of the TCC, which states that freight does not need to be paid for cargo lost due to accidents unless stipulated otherwise by the contract.

The Court concluded that the Court of first instance's reliance solely on legislative texts to dismiss the freight charge claim without sufficient reasoned analysis was incorrect. It ruled that the appeal on this ground was valid, necessitating a reversal and further consideration of all aspects presented, especially concerning the ship’s seaworthiness and the handling of the freight charges.

The Court of first instance resisted the Supreme Court of Appeal’s decision to overturn its initial ruling. In its resistance, the Court referred to the International Safety Management (ISM) Code, the Hamburg Rules, the Hague and Hague-Visby Rules, and detailed observations of the crew’s failure to adequately handle the fire aboard the vessel. Additionally, the Court cited the UK High Court case Eurasian Dream to support its stance that freight charges should not be refunded if the cargo is lost as per the bill of lading. The Court of first instance held that the plaintiff’s claim for the refund of freight charges was unfounded based on these international standards and detailed assessments despite the cargo’s total loss during the incident.

The parties appealed again, which escalated the case to the Supreme Court’s General Assembly of Law (the General Assembly) for further review and final judgment.

Held: Appeal accepted. The decision of the Court of first instance to resist was overturned.

The General Assembly examined multiple expert reports, noting contradictions about the ship’s seaworthiness at the start of the journey. While initial reports confirmed the ship’s compliance with international standards and the crew's preparedness for a fire, subsequent reports questioned these findings, pointing to deficiencies in the crew’s emergency response and technical preparations, which were deemed insufficient to demonstrate readiness for a fire emergency as required by the SOLAS Convention.