Can a lien be placed on a foreign-flagged vessel in Türkiye?

In maritime trade, ships, being "high-value and mobile" assets, are central to credit and financing relationships. Therefore, it is natural for a creditor to want to establish a lien/mortgage on the ship to secure their claim. However, the question of "liens" on ships cannot be easily answered with the logic of classic movable property liens; because even though ships are legally movable property, they are often registered and open to international circulation. In Turkish law, this area is considered both in conjunction with the ship mortgage regime of the Turkish Commercial Code (TTK) and the conflict of laws rules of the Law on Private International Law and Procedural Law (MÖHUK) .

The problem addressed in this study is: Can a lien be established in Turkey, "under Turkish law," on a foreign-flagged (registered in a foreign registry) vessel? If so, how? If not, what security and enforcement strategies can protect the creditor in Turkey? The answer to this question can be clarified by distinguishing between "establishment (registration) law" and "enforcement/sale law in Turkey."

I. Conceptual Framework: What is meant by "ship mortgage"?

In Turkish law, the core of contractual security for registered vessels is the ship mortgage. According to the Turkish Commercial Code, a mortgage can be established on a ship to secure a debt; a ship mortgage authorizes the creditor to collect their debt from the value of the ship, and contractual pledging of registered vessels can only be achieved through a ship mortgage.  Therefore, the question of "establishing a pledge in Turkey" in practice often transforms into the question of "establishing a ship mortgage in Turkey".

The establishment of a ship mortgage is subject to two conditions: the owner and the creditor must agree on the establishment of the mortgage, and the mortgage be registered in the ship registry . Therefore, a ship mortgage is a type of pledge "dependent on registration"; if there is no registration, no real right arises.

II. Applicable Law to Foreign-Flaged Vessels (Turkish Private International Law Act, Article 22)

The fundamental question regarding foreign-flagged vessels is which country's law applies to the real right (lien/mortgage) on the vessel . The Turkish Private International Law Act introduces a specific connecting rule for real rights on means of transport: Real rights on air, sea, and rail transport vehicles are subject to the law of the country of origin. The country of origin is defined as the place of registration where real rights on sea transport vehicles are registered ; if there is no such registration, it is the port of origin .

III. When Will "Holding Someone Hostage in Türkiye" Become Possible?

At this point, two separate scenarios must be distinguished:

1) If the ship is registered in the Turkish registry (MGS/TUGS etc.): Ship mortgage is possible in Türkiye

If a foreign-flagged vessel is registered in the Turkish ship registry and acquires the right to fly the Turkish flag under the conditions permitted by legislation , then a ship mortgage can be established in Turkey under the regime of Articles 1014-1015 of the Turkish Commercial Code. This is because the requirement of "registration in the ship registry" for the establishment of a mortgage can only be meaningfully fulfilled when the vessel is entered into the Turkish registry system.

In practice, this mostly happens through "reflagging" (changing flags) or transferring to specific registries; however, the registration of every foreign ship in the Turkish registry depends on the ship's ownership and flag/registration conditions (this part will be evaluated separately according to the specific case).

2) If the ship is registered in a foreign registry: A mortgage cannot be established in Türkiye (in the Turkish registry); the pledge must be established according to the foreign registry law

If the vessel remains under a foreign flag and registered in a foreign registry, the correct way to establish real security mortgage/pledge registration in that foreign registry(law of the country of origin). According to the connecting rule in Article 22 of the Turkish Private International Law Act, the transaction creating a real right on the vessel is completed not by "registration in the Turkish registry," but by the form and registration conditions required by the registry of origin .

In this context, the approach of "we made a contract at a notary in Turkey, the ship was anchored in Turkey, therefore a Turkish ship mortgage was created" does not, as a rule, create a real right; at most, it can create a personal debt relationship/guarantee commitment between the parties.

Note: In practice, exceptional regulations stating that "a mortgage annotation on the flag certificate is considered a registration" primarily Turkish vessels acquired abroad but not yet registered in the Turkish registry ; they should not be interpreted as an automatic "mortgage annotation in Turkey" regime for foreign-flagged vessels. (Whether the vessel is considered a "Turkish vessel" in the specific case is a separate matter for investigation.)

IV. How Can a Creditor on a Foreign-Flaged Vessel Be Protected in Türkiye?

A ship mortgage established in a foreign registry does not become "inactive" when the ship arrives in Türkiye. On the contrary, special provisions in Turkish enforcement law regarding the liquidation of ships establish a system that also covers foreign-flagged vessels.

1) In Türkiye, the compulsory sale regime also covers registered vessels flying foreign flags (Turkish Commercial Code, Article 1383)

According to the Turkish Commercial Code Turkish and foreign-flagged vessels registered in a registryof the Enforcement and Bankruptcy Law regarding the sale of immovable properties . This is the primary avenue for forced sales of foreign-flagged vessels in Turkey.

2) Article 153/a of the Turkish Enforcement and Bankruptcy Law and conceptual transformation: “immovable property = a ship registered in Türkiye or abroad”

The provisions in the Turkish Commercial Code specific to ships clearly state that the term "immovable property" refers to ships registered in Turkey or abroad , and that the term "land registry" refers to the ship registry . This approach facilitates the handling of a mortgage registered in a foreign registry as a "legal technique" in the enforcement/sale process in Turkey.

3) Practical rule regarding the competent enforcement office

The competent enforcement office for the foreclosure of a ship mortgage is the enforcement office of the place where the ship was provisionally seized or where the ship is registered . Since the foreign registration place is outside Turkey, in practice, jurisdiction is established through the enforcement office of the port/place where the provisional seizure was applied in most cases .

V. “Collection Strategy in Türkiye” instead of “Hostage Management in Türkiye”: Implementation Recommendations

On a foreign-flagged vessel, the creditor's objective is often two-pronged:

1. Establishing the security in kind according to the law of the country of origin (registration in a foreign register),

2. To ensure swift protection and collection when the vessel arrives in Türkiye, we will implement an effective enforcement/finalization strategy in Türkiye.

For this purpose, the following are examples of collateral packages that are considered strong in practice:

• Foreign ship mortgage: registration in the registry of origin. (The backbone of the real security.)

• Assignment of insurance claims/coverage: creditor registration in policies, loss payee arrangement, premium tracking.

• Assignment of freight/charter revenues as security: Since a ship mortgage will not automatically cover every revenue stream, the revenue stream is further secured through an assignment of receivables.

• Account pledge, guarantee, surety: Highly enforceable ancillary collateral in Turkey.

• In Turkey, the precautionary attachment and preservation reflex: due to the ship's mobility, "actual control" is often a prerequisite for collection.

An important academic point to emphasize is this: while establishing a "new real lien" in Turkey on a foreign-registered vessel is often not possible/effective, the creditor can bring their real security, which originated in the country of origin, to a "collection conclusion" through a precautionary attachment + foreclosure mechanism in Turkey

The question, "Can a lien be placed on a foreign-flagged ship in Türkiye?", should be answered not with a single sentence, but with two layers of explanation:

1. Regarding the establishment (creation of real rights): Real rights on a ship flying a foreign flag and registered in a foreign registry to the law of the country of origin, of the Turkish Private International Law Act. Therefore, as long as the ship remains registered in a foreign registry, it is generally not possible to establish a "ship mortgage in the sense of Turkish law" in Turkey through registration in the Turkish ship registry; the real security is established according to the registration and formal requirements stipulated by the registry of origin.

2. In Turkey, regarding enforcement and collection: When a ship arrives in Turkey, Turkish law does not exclude foreign-flagged registered vessels from the compulsory sale system. Article 1383 of the Turkish Commercial Code stipulates that registered Turkish and foreign-flagged vessels shall be liquidated according to the provisions for the sale of immovable property. Article 153/a of the Enforcement and Bankruptcy Law also conceptually defines "immovable property" as a ship registered in Turkey or abroad, thus establishing a basis for its application.