ACQUISITION OF SHIP’S PROPERTY

In its basic sense, property gives the rightful owner rights, such as preservation, claim and ownership on the property they own. In the case of ships’ property, the integral parts and accessories of the ship are evaluated within the scope of ownership. It is important to also and clearly identify issues that are not included in the property.

In accordance with the Turkish Commercial Code articles 996 and 997 in line with the International Private Law in terms of the applicable law regarding ships; The Turkish Commercial Code will be applied to the vessels registered in the Turkish ship registry, and the provisions regarding movables will be applied in terms of ownership and limited real rights for the vessels not registered in the ship registry. As for ships that do not have a place of registration; real rights will be subject to the law of the place where they are located. In this article, the topics of acquisition of ship’ s property will be included.

Key words: original acquisition of ship’ s property, acquisition of ship’ s property by transfer of title, acquisition by statute of limitations, transfer of ship, registration cases and actions for nullity.

  1. Original Acquisition of Property
  • Acquisition of property by appropriation

The right to original acquisition of property belongs only to the state, and in the event that the ship is derelict or abandoned, the state acquires property of the ship by original acquisition with registering this ship in the ship register.

Commercial Code Article 998 – (1) The right to own a derelict ship belongs only to the State. A derelict ship is a ship whose ownership cannot be understood from the registry records or whose ownership has been duly abandoned.

(2) The state acquires property of the ship by registering itself as an owner in the ship registry.

  • Acquisition of property by statute of limitations 

If a registered ship is recorded with the owner of the ship, even though she is not the shipowner, and if she holds as a possessor for five years without a lawsuit and uninterruptedly over this record, she acquires the ownership of the ship. The beginning of the period starts from the date of registration of the ship. There may be issues such as suspension and toll of the statute of limitations within the specified period. In this case, it is necessary to file a lawsuit due to the termination of the statute of limitations with the determination of situations such as changing or re-acquiring the subject of possession. 

A person who has been in possession of a ship for 10 years as a reversioner, although it had to be registered in the registry, without a lawsuit and uninterruptedly, has the right to request the registration of the ship in his own name.  Registration is only possible by filing a case. In the circumstances, a counteraction under the name of registration case must be filed against the registry office where the ship is registered or must be registered. The court calls interested parties to report their objections by setting a maximum period of three months with an announcement to be made in a newspaper with a circulation of more than fifty thousand and distributed at the domestic level. If it is not challenged or the appeal is rejected, registration is decided. Before the registration decision is made, if a third person is registered as the owner or if an objection is given to the registry that the ship registry is not correct due to the ownership of the third party, the registration decision would not be valid for the third party. With the registration decision issued by the court, the reversioner acquires ownership of the ship as soon as he registers himself in the register. 

In the registration case filed due to extraordinary statute of limitations, if the court accepts, the new owner registration is made in place of the former owner of the ship.   In this case, since the ship will be derelict between the old owner and the new owner, an annotation should be requested to be added to the ship registry to prevent loss of rights. 

  1. Acquisition of Ownership by Transfer of Title

What is meant by the transfer of ownership is, the agreement of the parties on the terms of the transfer and the completion of the necessary legal procedures for the transfer. In this context, they must enter into a written agreement for the transfer of a ship registered in the ship registry, and the signatures must be notarized. Turkish Commercial Code article 1001, while specifying the form of the transfer does not include the requirement that the transfer should be notarized, but there is a requirement that the signatures be notarized. Accordingly, the parties can also make their written agreements at the ship registry office. In the justification of the law, it was stated that the intended issue should be done in writing since the possession has passed into and the movable has a great economic value.

There is an opinion that the actual delivery of the ship will be possible with the start of duty of the ship’s crew of the real or legal person who took over the ownership.

Purchase, sale, barter (variation agreement), shipbuilding agreement can be counted as agreements that arises the obligation of passage of title. A separate explanation is required for the transfer of ownership for the ships registered and not registered in the ship registry. Unless otherwise agreed by the parties, the scope of the transfer is the ownership of the existing additions at the time of transfer becomes the subject of transfer, along with the ownership of the ship. 

  • Ships not registered in the ship registry: Since the provisions of the Turkish Civil Code will apply for Turkish ships without registration, the transfer of possession will be required for the transfer of the whole or share of the ship. According to article 763 of the Civil Code; “A person who acquires possession of a movable in good faith and as the owner, becomes the owner of that thing, in cases where the acquisition is protected according to the provisions of possession even if the transferror does not have the authority to transfer the property.”  Accordingly, a person who inherits the ownership of a ship that is not registered in the register, to become the owner in good faith, shall retain the ownership acquired by that person in accordance with the provisions of the ownership, even if the transferror does not have the right to transfer the ownership.

According to the decision of the 19. Civil Chamber of the Court of Cassation (Merits No: 2018/2044, Decision No: 2019/4497); There is no dispute between the parties that the subject boat is not registered in the ship registry and that it originally belonged to the defendant … . Since the subject boat is not registered in the ship registry, it has the effect of securities and its sale is subject to the provisions of securities.

  • Ships registered in the ship registry: Ships registered in the registry can do so with a written contract, notarized signature, and transfer of possession within the scope of TCC art. 1001, as explained above. It is possible to carry out this transfer at the ship registry office. 
  • Share of ship and interest share registered in the register: While registration is required for the transfer of the interest share, Registration is not obligatory for ships registered in the registry that are not operated in the form of association of shipowners. In other words, the transfer of the interest shares on the ship registered in the register must be recorded in the ship register. In the association of shipowners, each of the affreighter shareholder can transfer their interest shares without the consent and approval of the other shareholders. However, if the ship’s right to raise the Turkish flag will be lost after this transfer, then the approval of other shareholders is required for the transfer. If it is decided to pay the debt or repair the ship after sailing, shareholder who does not agree with the decision may leave her share instead of paying this debt. In that case, she does not have to make the necessary payment. A shareholder who wishes to exercise such a right must notify the owners, of its decision through a notary public or to the registry office.

For ship’s property to continue to have an effect on lease and freight contracts, these contracts must be annotated in the ship registry. In this way, commentary may be effective and bear consequences on subsequent owners.

Some decisions on registration to the register are as follows:

According to the decision of T.R 15. Civil Chambers of the Court of Cassations(Court Merits No. 2019/1378, Decision No. 2020/2233); The action is about the request to transfer the claim subject to enforcement proceedings of the plaintiff filed against the landowners and the contractor based on the authorization certificate, obtained from the enforcement office according to the article 94/II of the Bankruptcy and Enforcement Law, and to the limited work fee to the execution follow-up file made with the collection from the land owners.

According to the article 94/II of the Bankruptcy and Enforcement Law, it has been provided that the property or other real rights that the debtor has not rejected due to inheritance or any other reason and has not yet registered in the land registry and ship registry can be claimed by the creditor on behalf of the debtor, upon request, the enforcement office will notify the land registry or ship registry office and, if necessary, the court on that the creditor may follow this transaction; and according to the article 94/II of the Bankruptcy and Enforcement Law, only the registration of property and real rights in the name of the debtor can be requested based on the authorization certificate to be obtained from the enforcement office…

In the decision of court of Cassation’s Assembly of Civil Chambers (Court Merits No. 2019/11-658, Decision No. 2020/101);

Decision of the Court of First Instance: It is decided that the yacht in question is registered in the Turkish ship registry, and the sales contract of the registered ships should be made officially, for this reason, that the contract between the parties is not a valid contract, and the plaintiff declares his will to withdraw from the contract by taking back the ship delivered to the defendant, that the defendant also did not fulfill the action he had undertaken according to the agreement between them, and everyone should return what he bought because the contract between the parties was not valid, … moreover, to the acceptance of the original case on the grounds that the partnership cannot be considered as a true partnership as explained above and cancellation of the defendant’s share in the company; with the acceptance of the counter action and the collection of 107.100,00 Euro from the counter party company; to rejection of the merged case.

During negotiations at the Assembly of Civil Chambers; the shares of the original case should be opened by the transferror …, also, the decision made in the original case was not capable of execution, for this reason, it cannot be said that the decision is final since it will not produce results, and that the main case can be reversed by making an appeal examination ex officio, therefore, although it was claimed that the decision to resist should be reversed for this different reason, this opinion was not adopted by the majority of the Board for the reasons explained above.

  1. Loss of Ownership 

In cases such as wreck of a ship, becoming a carcass, sinking, destruction, and the loss of the ship, the ownership of the ship registered in the register ceases. However, the liability of the shipowner for damage to the environment, resulting from the removal of the ship’s wreckage, continues.  In addition, it is possible to lose ownership by abandoning the ship.

According to the T.R 11. Civil Chamber of the Court of Cassation (Court Merits No. 2018/3111, Decision No. 2019/4887); According to the court, the remitter and the scope of the whole file, it was decided that the ship Düden lost its right to raise the Turkish flag as a result of the valid confiscation process by the Brazilian State Authorities, as the property was originally acquired by confiscation, all mortgage and pledge rights on the ship were also terminated, since the plaintiff purchased the ship in the tender opened by the Brazilian State, free from all rights in rem, the mortgage right previously placed on the ship by the defendant Emlak Bankası has also ended, since it is possible for a ship that has lost the right to raise the Turkish flag, its registration can be deleted acceptance of the case on the grounds that the request for the deletion of the Düden vessel’s registration in the Turkish ship registry was in accordance with the aforementioned law…to the abandonment of the ship from the Turkish National Ship Registry, to the determination of the ownership of the ship in question belongs to plaintiff shipowner Lyra Navagation Maritime Ltd Company, and with the rejection of all appeals of the defendants’ representatives, it was decided to approve the judgment found in accordance with the procedure and the law.

CONCLUSION: The acquisition of ownership of ships may be based on reasons arising from public and private law. The state has the right to register on behalf of the public on a derelict ship. In terms of written contracts between the parties, the transfer of the ship is possible, and a separate registration requirement has been imposed for the association of shipowners as an exception. Registration cases and actions of nullity are often encountered in practice due to erroneous registration, failure of the parties to fulfill their obligations after the contract, or disputes arising from portion of the inheritance. 

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