The ship register is the single address for the questions of which State’s flag a ship flies, who holds rights over her and within what limits those rights may be exercised. The register confers a legal identity on the vessel; a ship that remains outside the register can neither carry on regular navigation in international waters nor take her place within a commercial organisation. The bond of nationality established by the entry, the protection of third parties who transact in reliance on the entry and the fact that the data in the register are treated as correct make this institution indispensable for maritime trade.
Ship registers are public in character. Anyone contemplating a commercial relationship with a vessel, or merely curious about the entry, may examine the owner of the ship, whether a ship mortgage exists over her and the changes that have been registered. The most critical of the data shown in the register is ownership, for it is the owner who holds the power of disposition over the ship.
In this briefing note we examine the ways in which ownership of a ship is acquired, how that acquisition is reflected in the register and the cases in which ownership comes to an end. Although the register regimes of States with a coastline resemble one another, the conditions of registration vary from country to country, and the assessment is therefore conducted on the basis of the Turkish register organisation.
The Legal Nature of Ship Ownership
Ships are regarded as movable property, both physically and legally, even where they have been entered in the register; their size does not alter that characterisation. Art. 936 of the Turkish Commercial Code No. 6102 has brought to the matter a clarity that leaves no room for doubt:
Turkish Commercial Code No. 6102, Art. 936
"All ships, irrespective of whether or not they are entered in the register, are movable property for the purposes of the application of this Code and of the other statutes."
Within the scheme of the Civil Code, ownership of a ship falls within the category of an absolute right; that is to say, it may be asserted against everyone. The owner may deal with his ship as he wishes, provided that he does not act contrary to law. Protective possibilities have been added alongside that power: where the vessel is unlawfully seized, an action for the recovery of the property may be brought, and the prevention of any interference directed at ownership may equally be sought.
A person who holds a thing under his actual control is termed the possessor. The provisions of the Civil Code on possession apply to all ships, whether or not they are registered. TTK Art. 996, by contrast, provides that, unless otherwise stipulated, the statutory provisions governing the legal nature of ships are to be valid only in respect of ships entered in the register. Since the Code does not point to a single register here, the provision is not confined to the National Ship Register; vessels entered in the Turkish International Ship Register and in the register peculiar to ships under construction also fall within its scope.
The definition of the register, its types and the procedure of registration are addressed in detail in Independent Legal’s separate briefing note entitled "The Ship Register and Registration".
The National Ship Register and TUGS Entries in Turkish Law
The State in whose register a ship is to be entered is determined according to the law of the country to which the owner, the shipowner, the ship operator or the person taking the vessel over by another legal transaction is subject. As far as Türkiye is concerned, the framework is drawn by the Turkish Commercial Code No. 6102, and ships are entered in the Turkish National Ship Register. The vessels capable of being entered in that register fall into two groups according to whether the entry is compulsory: ships whose registration is made compulsory by statute, and ships whose registration is left to the will of the owner, that is to say optional.
Turkish Commercial Code No. 6102, Art. 957
"The owner of every merchant ship of eighteen gross tons or more is obliged to request registration."
The provision has turned registration into an obligation for merchant ships exceeding the threshold of 18 gross tons. The converse meaning that follows from the wording of the Code is clear: for vessels remaining below that threshold, whether or not to have an entry made lies within the owner’s initiative.
Certain ships, on the other hand, are not legally permitted to be entered in the National Ship Register. Under TTK Art. 958, the following vessels may not be registered in the National Ship Register:
- craft that do not have the character of a Turkish ship,
- Turkish ships entered in the register of a State outside Türkiye,
- warships forming part of the war fleet,
- auxiliary ships supporting that fleet,
- ships belonging to the State, to a special provincial administration, to a municipality or to a village legal entity, or dedicated to another public service.
The Turkish International Ship Register (TUGS), for its part, was born of a different need: that of preventing Turkish ships from migrating to the registers of the coastal countries referred to in the literature as "flag of convenience States". Turkish ships, and foreign ships where certain conditions are met, may be entered in the National Ship Register and may equally, where they satisfy the requirements sought, be entered in the Turkish International Ship Register.
Which vessels are regarded as Turkish ships, and the criteria on which the right to fly the Turkish flag depends, form the subject of a separate study entitled "Turkish Ships and the Right to Fly the Turkish Flag".
Acquisition of Ownership by Legal Transaction in Ships Entered in the Register
Vessels entered in the ship register are referred to in practice as registered ships. Under the repealed Commercial Code, the acquisition of the ownership of a registered ship from the owner by legal transaction did not require the new owner to be entered in the register; nor was it necessary for possession of the vessel to have been transferred. Under the former scheme, therefore, the register played no part in the passing of ownership, and the ownership of ships changed hands outside the register.
As we noted above, however, the register is a powerful instrument of protection both for those asserting rights over a ship and for persons about to enter into legal or commercial relations with the vessel. Under Art. 1001 of the Turkish Commercial Code No. 6102 now in force, where a transfer of ownership is intended, the transfer agreement must be made in writing and the signatures of the parties must be certified by a notary. Once the agreement has been concluded, the acquisition of ownership by the buyer further depends on possession of the ship also being passed to him. Registration, by contrast, is not a constitutive element for the coming into existence of ownership. By this arrangement the transfer of the ownership of ships has been brought into line with the transfer of the ownership of movables, and the presumption of ownership has been attached to possession.
As in every transfer resting on a contract, the conveyance of the ownership of a ship proceeds in two stages: first the undertaking, then the act of disposition. Its counterpart in practice is as follows: the parties first conclude the contract of sale, and ownership passes to the other party by the act of disposition which constitutes the performance of that contract.
Sale is not the only option. Contracts of exchange, gifts, partnership agreements and shipbuilding contracts are likewise counted among the transactions capable of giving rise to an obligation to transfer the ownership of a ship.
Acquisition of Ship Shares and Participation Shares by Legal Transaction
Where a ship entered in the register is held in co-ownership by shares, the agreement between the owner of the share and the person who is to acquire the right of ownership is sufficient for the share to pass to the transferee. The Code nonetheless requires that agreement to be made in writing and the signatures to be certified by a notary. TTK Art. 1007(1) has further provided that the agreement in question may also be concluded at the ship registry offices.
In ships that are operated in the form of a shipping partnership and are entered in the register, a change in the holder of a participation share takes place by way of the transfer of the ship share and the registration of that transfer in the register.
Turkish Commercial Code No. 6102, Art. 1007
"(1) The ownership of a ship share entered in the register passes to the transferee by the agreement of the owner and the acquirer to that effect. The agreement must be made in writing and the signatures must be certified by a notary. This agreement may also be made at the ship registry office.
(2) In a shipping partnership, each of the co-owning shipowners may at any time transfer his participation share, wholly or in part, to another without the consent of the other co-owners. The transfer of a participation share in a ship entered in the register takes place by the transfer of the ship share and its registration in the register.
(3) Where, as a result of the transfer of a ship share or of a participation share, the ship is to lose the right to fly the Turkish flag, the transfer is valid only with the consent of all the co-owners or of all the co-owning shipowners.
(4) Where a ship share is transferred while the ship is on a voyage, the scope of the transfer is determined in accordance with the third paragraph of Article 1002."
Acquisition of Ship Ownership by Appropriation
The establishment of control, with the intention of becoming its owner, over a thing which has no owner and has been abandoned is termed appropriation. Where a ship that has no entry in the register is abandoned by the renunciation of its owner, it comes to occupy the position of an ownerless ship and, from that moment, becomes capable of being acquired by anyone by way of appropriation. Art. 767 of the Turkish Civil Code No. 4721 arrives at the same result: a person who takes an ownerless ship into his possession with the intention of becoming its owner may, under that provision, become the owner of the ship.
The picture is different for ships entered in the register. Where the owner notifies the registry office that he renounces his right of ownership and that declaration is entered in the ship register, ownership is deemed to have been abandoned; the vessel does not, however, fall into the same legal position as a ship that has no entry. Under TTK Art. 998(2), the power to acquire an abandoned registered ship by appropriation is conferred exclusively on the State. The State acquires ownership of the ownerless ship by having itself registered as owner in the ship register.
A detailed assessment of the legal nature of abandoned ownerless ships appears in the study entitled "The Ownerless Vessel".
Acquisition of Ship Ownership by Acquisitive Prescription
Acquisition by Ordinary Prescription
A person who has been entered in the ship register as owner although he is not in fact the owner acquires ownership of the vessel where two conditions are satisfied together:
- that the entry has continued without interruption for at least 5 years,
- that throughout the same period the ship has been held as principal possessor, undisputed and without interruption.
The period begins to run on the date on which the purported owner is registered as owner in the ship register. The point at which this mode of acquisition departs from ordinary prescription in immovables is the criterion of good faith: whereas TMK Art. 712 requires, for the ownership of immovables, that "possession be continued in good faith", TTK Art. 999, which governs the matter, has laid down no such condition.
Acquisition by Extraordinary Prescription
In the acquisition of the ownership of a ship by extraordinary prescription, a regime applies which differs as between ships entered in the register and ships which have not been registered notwithstanding that their entry is compulsory.
A person who holds, for at least 10 years, as principal possessor, undisputed and without interruption, a vessel which ought to have been entered in the register but has not been, may request that the ship be registered in his own name. The details of this mode of acquisition are governed by TTK Art. 1000:
Turkish Commercial Code No. 6102, Art. 1000
"(1) A person who holds, for at least ten years, as principal possessor, undisputed and without interruption, a ship which ought to have been entered in the register but has not been registered, may request that the ship be entered in the register as his own property.
(2) A person who holds, on the conditions set out in the first paragraph, a ship registered in the name of a person who died or was declared missing at least ten years ago and in respect of which no matter subject to the owner’s consent has been recorded for ten years, may likewise request to be registered as the owner of that ship. The calculation, interruption and suspension of the period of possession are subject to the provisions of the Turkish Code of Obligations on the limitation of claims.
(3) Registration may be effected only by a court order. The action for registration is brought against the registry office in which the ship is registered or in which it ought to be registered. The court, fixing a period of not more than three months, summons the interested parties to notify their objections by an announcement to be published in a newspaper with a circulation of over fifty thousand which is distributed throughout the country. If no objection is made, or if the objection is rejected, registration is ordered.
(4) Where, before registration is ordered, a third person is registered as owner, or an objection has been annotated in the register, by reason of the ownership of a third person, to the effect that the ship register is not correct, the order of registration has no effect in respect of that third person.
(5) The principal possessor acquires the ownership of the ship at the moment when he has himself entered in the register on the strength of the order of registration given by the court."
For vessels whose entry in the register is not compulsory, Art. 777 of the Turkish Civil Code No. 4721 finds its field of application.
Extinction of Ship Ownership
Since there is more than one possibility capable of leading to the extinction of ownership, examining the subject under four separate headings makes the picture more intelligible.
Loss of the Ship
Where a vessel entered in the register sinks beyond any possibility of salvage, is damaged to such an extent that her repair becomes impossible, or is destroyed in such a way as to leave no wreck behind, the right of ownership over the ship comes to an end.
Abandonment
As we set out in detail above, where the owner of a registered ship declares that he renounces his right of ownership and has that declaration entered in the ship register, he abandons the ownership of the vessel. The rules on abandonment are laid down in TTK Art. 1004.
Acquisitive Prescription
In ordinary prescription, the principal possessor who satisfies the conditions acquires ownership, while the right of the former owner is extinguished at the same moment (TTK Art. 1051). In extraordinary prescription, by contrast, the result is produced by the order of the court; upon registration being ordered, the ownership of the former owner comes to an end, and the new owner acquires the right of ownership at the moment when he has himself entered in the ship register as owner.
Loss of Ownership over Ship Shares and Participation Shares Entered in the Register
In registered ships subject to the provisions on the loss of ownership contained in TTK Art. 1008, where a participation share is relinquished, the right of ownership over the share passes, upon the giving of the notice of relinquishment, to the other co-owning shipowners in proportion to their participation shares.
Turkish Commercial Code No. 6102, Art. 1008
"(1) In a shipping partnership, where it is resolved to undertake a new voyage, to have the ship repaired at the end of a voyage, or to pay a maritime claim for which the shipping partnership is liable, each of the co-owning shipowners who did not take part in the resolution may, by relinquishing his participation share without claiming any consideration, be released from making the payments required in order to give effect to the resolution.
(2) A co-owning shipowner wishing to exercise this right is obliged to give notice, through a notary, to the co-owning shipowners or to the ship’s manager within three days from the date on which the resolution was adopted or, if he or his representative was not present when the resolution was adopted, from the date on which the resolution was notified to him.
(3) The right of ownership over the relinquished participation share passes, by a notice of relinquishment to be given in accordance with the second paragraph, to the other co-owning shipowners in proportion to their participation shares."
Relevant Legislation
The Independent Legal Assessment
A large proportion of disputes concerning the ownership of ships arise from leaving unanswered the question of when ownership passed. Since registration is not a constitutive element under the arrangement in force, the fact that the parties have signed a notarised transfer agreement is not regarded as sufficient on its own; a failure to document the actual transfer of possession gives rise to a serious problem of proof in actions for the recovery of property and for debt brought subsequently. Conversely, a failure to update the register entry may also produce consequences such as the acquisition of the ship by third parties in good faith, or the attachment of the vessel in enforcement proceedings conducted against the former owner.
Transfers of participation shares and transactions affecting the right to the flag call for particular attention. Where a change in the holder of a share is to bring the ship’s right to fly the Turkish flag to an end, the transaction depends on the consent of all the co-owning shipowners; transfers made without obtaining that consent give rise to a question of validity. When a road map is being drawn up in a particular file, the following heads should be brought to the fore:
- Verifying whether the transfer agreement satisfies the conditions of written form and notarial certification
- Bringing into the file the handover minutes, protocols and navigation records relating to the transfer of possession
- Keeping the register entry up to date by conducting applications for registration, deletion and annotation simultaneously with the transfer transaction
- Obtaining in advance the consents of the co-owning shipowners in transfers of shares affecting the right to the flag
- Basing on documentary evidence the moment at which the five-year and ten-year periods begin to run in claims of acquisition by prescription
- Making the notifications within the statutory periods in cases of abandonment, loss of the ship or withdrawal from a shipping partnership
Independent Legal provides advisory services and conducts litigation in this field of maritime commercial law, from the purchase and sale of ships to registry procedures, and from ownership disputes to relations within a shipping partnership.