Corporate and M&A

Author: Duygu Oner

 

 

Turkey ratified the Convention on the Contract for International Carriage of Goods by Road ("CMR") in accordance with Act No. 3939 dated 7 December 1993, and the CMR entered into force in Turkey on 31 October 1995.  In accordance with Article 1 / 1 of the CMR, the carriage of goods by road shall be subject to the CMR in cases when the place of taking over of the goods and the place designated for delivery, as specified in the contract, are situated in two different countries, of which at least one is a contracting country, irrespective of the places of residence and the nationalities of the parties. The CMR is practically applicable to every carriage that begins or ends in or passes through Turkey. 

 

Domestic carriages are governed by and are subject to the provisions of the Turkish Commercial Code1 ("TCC"). On the other hand, the parties may specifically and contractually agree on the CMR's terms for domestic carriages. This Newsletter examines the domestic carriage of goods by road under the TCC, comparing the relevant provisions with the CMR's terms.  

 

 

The liability of the carrier is regulated in the TCC with an approach similar to that of the CMR, where the carrier is liable for all damage caused by loss of or damage to the goods that occurred within the time period between the receipt of the goods and their delivery, and also for damages caused by delay in delivery. As for loading and unloading operations, the TCC stipulates that unless it is specifically agreed to otherwise, or in circumstances or when common usage indicates otherwise, the loading, handling, stowage and unloading of the goods shall be performed by the sender or person acting on behalf of the sender.  

 

 

With regard to exclusion of liability, the TCC has adopted the same principles stipulated in the CMR. The carrier is relieved from liability insofar as the loss, damage, or delay in delivery was caused by circumstances which the carrier could not have been avoided, even by exercising the utmost diligence. In addition, both the TCC and CMR set forth a catalogue of particular grounds that relieve the carrier from liability. As per the relevant provisions, the carrier shall be exempted from liability if the loss, damage, or delay occurs due to use of an open vehicle or loading on the deck, if such carriage had been agreed upon, or was customary given the circumstances, due to the sender's or consignee's handling, loading or unloading of the goods, the sender's inadequate packaging, due to the natural condition of the goods, due to the natural condition of the goods exposing them to damage, particularly by breakage, rust, decay, desiccation, leakage or normal wastage, due to the goods' insufficient labeling by the sender, and due to carriage of livestock.  

 

 

In parallel to the provisions of the CMR, the TCC stipulates that when a carrier is liable to pay compensation for a total or partial loss of the goods, such compensation is to be calculated by reference to the value of the goods at the place and time in which they were accepted for carriage. The TCC also provides that in such a case, the carrier shall refund the freight and cover the public levies and other charges caused by the carriage of the goods. The carrier shall not be liable for any further damage, such as consequential loss.  

 

The maximum amount of compensation payable for loss or damage to the consignment is limited to SDR (Special Drawing Rights) 8.33 per kilogram of gross weight of the consignment.

 

As for other damages, if the carrier is liable for the breach of a contractual obligation connected with performance of the carriage of the goods, its liability for that damage that has not resulted from loss or damage to the goods, or from non-compliance with the delivery period, and which is not damage to the goods or persons, and is limited to three times the amount payable in the event of loss of the good. 

 

 

The carrier is liable for the acts and omissions of its agents and servants and other persons whose services it uses for the carriage of the goods, when such agents, servants or other persons are acting within the scope of their employment, to the same extent as for its own acts and omissions. 

Willful Misconduct 

 

Being a new concept introduced to Turkish law with the enactment of the TCC in 2012, willful misconduct has been regulated in the road transport law section of the TCC, which corresponds to Article 29 of the CMR. In this respect, it is stipulated that the exemptions from, and limitations to, the liability do not apply if the damage resulted from an act or omission of the carrier or its agents and servants, or the damage is done with the intent to cause such damage, or recklessly, and with knowledge that damage will most likely occur.

 

 

The limitation period has been stipulated in the TCC in accordance with the principles of the CMR. The period of limitation for an action arising out of carriage is one year, and in cases of intent and willful misconduct, it is extended to three years. The limitation period runs from the day upon which the goods were delivered and in case of total loss, the period runs from the day upon which the goods ought to have been delivered. 

 

 

The sender or the consignee must notify the carrier of any damage to or loss of the goods, at the latest, at the time of delivery, in case such damage or loss is apparent. The mature and extent of the damage must be expressly stated in notifications. If the sender or the consignee fails to notify the carrier, it shall be deemed that the goods are delivered duly in accordance with the contract of carriage. The same principle has been adopted for the damages or losses that are not apparent. In the event that any damage or loss cannot be determined at first sight, and is not notified to the carrier within seven days from the date of delivery, it shall be deemed as the goods are duly delivered.  

 

In case of late delivery, the consignee must notify the carrier within 21 days as of the date of delivery that the delivery period is exceeded. In the failure of such notification within the above-mentioned period, the claims arising from the delay cease to exist. 

 

 

If the sender does not complete loading within the loading time, or if it does not make the goods ready to load for the carrier within that time period, the carrier is further entitled to set an appropriate deadline for the sender to load the goods or make them available. If those obligations are not fulfilled by the sender by the deadline, the carrier shall have the right to terminate the contract. 

 

As the freight becomes payable only upon delivery of the goods, the TCC has provided a retention right to the carrier for claims founded on the contract of the carriage. As per Article 891 of the TCC, the carrier is entitled to right of retention of the goods for all claims arising out of the contract.  Such a right has not been granted to the carrier under the CMR. 

 

 

Adopting the system of the CMR, the TCC has changed the old liability regime in terms of carriage of the goods by road. In this respect, many of the provisions stipulated in the TCC with regard to rights and liabilities of the carrier, as well as the sender, have been regulated based on the principles of the CMR. Nevertheless, this should not be interpreted that the provisions of the CMR would be applicable to domestic carriage. Domestic carriage is subject to and governed by the TCC, unless the parties have specifically and contractually agreed upon the CMR terms for the carriage.