TÜRKIYE Law and Practice Contributed by: Türker Yıldırım, Semih Sander, Gülistan Baltacı Hatay and Selçuk Sencer Esenyel, Esenyel|Partners Lawyers & Consultants
that such amount remains below the arrested ves - sel’s value. The security can be deposited in cash or provided by means of an unconditional bank letter of guarantee issued by a Turkish bank for an unlimited period of time. Release upon provision of a P&I letter of undertaking or a foreign bank guarantee is possible if the arresting and arrested party agree. 5.10 Procedure for the Judicial Sale of Arrested Ships Under Turkish law, the judicial sale of a vessel is car - ried out by the competent bailiff’s office. A judicial sale would require a finalised claim. While the auction process is the same for Turkish and foreign-flagged vessels generally, there is a difference in that the auc - tion of a foreign vessel would require a notification to the general consulate of the vessel’s flag state as well as notifications to the relevant ship registry and announcement in the relevant country. The vessel’s maintenance is attended by trustees appointed by the relevant bailiff; however, the claim - ant seeking the auction is, in practice, expected to pay the fees and expenses. The auction shall be public and can be entered by any individual or legal entity. There will be a reserved price of 50% of the appraised value of the vessel. A private sale is possible, albeit by way of a process involving the bailiffs and courts and a minimum of 90% of the appraised value of the vessel. Under Articles 1390 to 1397 of the TCC, the ranking of claims from the proceeds of a vessel’s auction is as follows: • expenses related to the forced sale, custody and maintenance of the vessel, and the wages and other receivables of crew for the period from the vessel’s arrest until their discharge; • costs for the removal or salvage of a wrecked, stranded or sunken vessel by public authorities, either to ensure safe navigation or to protect the environment; • claims secured by maritime liens;
• ship-yard’s privileged claims, if the vessel was in the ship-yard’s possession at the time of the auc - tion; • customs duties, taxes and other levies imposed on the vessel; • ship mortgages or other statutory liens; • maritime claims that do not take priority over the above; and • all other claims against the owners. 5.11 Insolvency Laws Applied by Maritime Courts Insolvency proceedings in Türkiye are mainly gov - erned by the EBL. The EBL stipulates the “concor - dato” scheme, which is similar to Chapter 11 of the US Bankruptcy Code and the Scheme of Arrangement in the UK. Vessels owned by ship-owners under court protec - tion by way of the “concordato” scheme cannot be arrested. 5.12 Damages in the Event of Wrongful Arrest of a Vessel The arrested party can seek damages on the ground of a wrongful arrest if the arrest order is lifted upon the arresting party’s failure to issue substantive proceed - ings within one month, or the lifting of the arrest order as per objections or the failure of the arresting party in the substantive proceedings. In any case, the claimed damages must be substantiated. 6. Passenger Claims 6.1 Laws and Conventions Applicable to the Resolution of Passenger Claims Applicable Regulations for Maritime Passenger Claims The Athens Convention 1974 and the 2002 Protocol have been in force in Türkiye since 1987 and 2014, respectively. The TCC, TCO and Turkish Consumer Protection Law are the main domestic laws applicable to the resolution of maritime passenger claims. Under the preamble of the TCC, it is explicitly stated by the legislature that the relevant articles are based on the 2002 Protocol.
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