In this bulletin, we will examine the Constitutional Court decision dated 08 June 2021 published in the Official Gazette dated 07 September 2021. The aforementioned decision gives an idea about the bindingness of the jurisdiction clauses both in charter-parties and in bills of lading for the burden parties, and the necessity of application to foreign courts separately in order to cut the statute of limitations in cases where there is hesitation in terms of jurisdiction.
In the present case that is the subject of the decision; M. Sigorta A.Ş. filed an application with the Constitutional Court on February 22, 2018, alleging that the right of property was violated. In summary, in the case subject to the application;
- The iron cargo was transported from Turkey to England by sea, and it was claimed that the cargo was damaged during transportation, in line with this claim, the loss of the insured regarding the cargo has been compensated by M. Sigorta A.Ş.
- M. Sigorta A.Ş. has filed a recourse lawsuit against the owner due to the amount he has paid.
- In the action for the annulment of the objection heard in the first instance court the case was decided to be accepted and objections regarding the jurisdiction and arbitration made by the Owner defendant were rejected on the grounds that the reference to the charter-party on the bill of lading is only for the freight charge, the relationship between the owner and the insurer who had paid the insurance to the consignee should be determined according to the bill of lading, not the charter party, and since the charter-party or fixture recap conditions will be valid between the undertaker of charter and the charterer, the arbitration clause is valid between the undertaker and the charterer.
- The Owner defendant filed an appeal and then the 11th Civil Chamber of the Supreme Court of Appeals, which examined the appeal, decided to overturn the decision on 12 July 2017 emphasizing that pursuant to Article 1110 of the abolished Law No. 6762 the provisions of the bill of lading are binding in the legal relationship between the carrier and the consignee, and the provisions of the freight contract are binding in the legal relationship between the carrier and the shipper, in addition, the arbitration clause was valid because the arbitration clause was decided in Article 42 of the carriage contract. In the reasoning of the decision, the 11th Civil Chamber of the Supreme Court of Appeals has stated that in Article 1 of the carriage conditions, which are on the back of the bill of lading that has "to be used together with the charter-party" and “Freight will be paid under the charter agreement dated 25/10/2010” clauses, states that "All the terms and conditions, rights and exceptions of the charter-party with the date specified on the obverse, including the applicable law and arbitration clause, are thus validated", and for these reasons, it was pointed out that the decision of nonjurisdiction should be rendered due to the arbitration clause.
- Following the decision* of the 11th Civil Chamber of the Supreme Court of Appeals, the court of first instance complied with the decision to overturn.
- M. Sigorta A.Ş. filed an application with the Constitutional Court, claiming that the final decision regarding the above-mentioned case was rendered 7 years after the damage occurred, causing the claim to be time-barred in accordance with English law and this abolished the possibility of collection of the claim.
The Constitutional Court drew attention to the issues stated by the 11th Chamber in its reasoning and concluded that the conclusion reached by the courts was not clearly arbitrary and did not contain an obvious discretion error. In addition, it was stated that the decision of non-jurisdiction after a long period of time could not be considered as a violation of the right of property, and since the applicant (M. Sigorta A.Ş.) did not apply to foreign arbitration in order to cut the statute of limitations after the decision of non-jurisdiction, the Constitutional Court did not accept his application before the Constitutional Court on the grounds that it was manifestly ill-founded.
As we all know, trials in local courts can take a long time. Therefore, in case of hesitations regarding jurisdiction, especially during the preparation phase of the case and during the trial, at least considering opening a separate lawsuit in foreign courts in order to cut the statute of limitations will prevent loss of rights in terms of statute of limitations.
In the light of our explanations above, if you have a question, request or need more information, we, as the "Esenyel & Partners" team, will be happy to assist you.
* Decision of 11th Civil Chamber of the Supreme Court of Appeals dated 12.01.2017 on the case number 2015/12971 - 2017/240
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