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Turkish Law of Transportation Series – III: Liability of Logistics Companies for the Loss, Damage or Delay in Delivery

Liability of Logistics Companies for the Loss, Damage or Delay in Delivery

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The main obligation of the transport and logistics companies, i.e., carrier in contracts of carriage is to take the commodity from one place to another and deliver it to the consignee. The carrier is obliged to deliver the commodity in the form and condition in which it was received. Therefore, the carrier also undertakes the obligation to preserve the commodity under its control while performing the contract of carriage.

The liability of the carrier for the damage that occur in the commodity due to the failure of the carrier to fulfill its obligation to preserve is regulated in the Turkish Commercial Code No. 6102 [‘TCC’’]. Accordingly, the carrier will be liable for the loss, damage or delay in the delivery of the commodity during the period between the receipt of the commodity for carriage and its delivery.

Liability for Loss or Damage

Loss may occur in the form of a quantitative decrease or complete disappearance of the commodity. Loss may arise from actual situations or legal restrictions. The important point here is that non-delivery to the consignee should be permanent; the temporary non-delivery of the commodity is not considered as loss. Burning, stealing or seizing the commodity by the competent authorities are some examples of loss.

Damage, on the other hand, is defined by the Court of Cassation as “any kind of material deterioration that occurs in the transported commodity and causes the value of the commodity to decrease”. In case of loss, all or a part of the commodity become undeliverable to the consignee and the commodity loses its economic value entirely. In case of damage, there is a decrease in the economic value of the commodity. Breaking, rusting, freezing, getting wet of goods are several examples of damage.

The carrier's liability for loss, damage or late delivery of the commodity commences when they receive the commodity and ends when they deliver the commodity. However, if the event that caused the loss or damage occurred during transportation, and if the loss or damage arises after delivery, the carrier will also be liable for such loss or damage.

The carrier's liability for loss or damage to commodity is a strict liability. In order for the carrier to be liable for loss or damage, it is sufficient that there is a causal link between the act that breaches the obligation to preserve and the harm. That being said, the carrier may be released from liability on the grounds set out in the TCC or by proving that they have taken the greatest care.

Liability for Late Delivery

The carrier will also be liable for the damages arising from the late delivery of the goods. A distinction should be made here as to whether the delivery date is stipulated in the contract or not. If the parties have agreed on the delivery date in the contract, the delivery not made on such date will be considered as late delivery. If the delivery date is not agreed in the contract, first the delivery date will have to be determined. The TCC sets out that in cases where the delivery date is not agreed, the carrier is liable for delivering the goods within a reasonable time. Here, the reasonable time will be determined according to the specifics of each concrete case.

In order for the carrier to be liable for late delivery, a harm must have occurred due to late delivery and such harm must be proven. Unlike the cases of loss and damage, the harm due to late delivery does not occur on the commodity itself, but on the value ​​of the assets other than the commodity being transported. Failure of the consignor to fulfill their commitments due to late delivery, payment of extra storage fee, the passing of the time of sale of the commodity are some examples of harm caused by late delivery.

In case of late delivery, if no harm has occurred, no compensation obligation will arise. Yet, the transportation fee can be reduced in proportion to the delay time. The responsibility of the carrier is strict liability in case of late delivery similar to the case of damage and loss. In order for the carrier to be liable for compensation, it is sufficient that the harm has occurred and that there is a causal link between the harm and the late delivery. Having said that, as also noted above, such liability is not absolute, and the carrier may be released from liability in specific cases stipulated in the TCC.

Conclusion

Under Turkish law, the logistics and transport companies, i.e., the carrier will be liable for the harm that occur due to loss or damage during the transport of the commodity, or as a result of the late delivery of the commodity. This is mainly because the carrier has breached the obligation to preserve the commodity during the transportation. The legal nature of such liability of the carrier is strict liability. This means that even if the carrier has no fault in incurrence of harm, they should still be liable. However, this liability is not absolute, and the carrier can be released from liability on the grounds set out in the TCC or by proving that they have taken the greatest care.

By Nihat Ozbek, Partner, and Baris Ulker, Senior Associate, Guleryuz & Partners

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