Usufruct Rights in Maritime Law

Maritime trade involves a highly complex legal framework regarding ship ownership and usage rights. It is possible to obtain certain benefits without possessing full ownership rights over a ship. One of the most important of these rights is usufruct. Regulated in the Turkish Civil Code and the Turkish Commercial Code, usufruct grants the right to use and benefit from a valuable asset such as a ship, but does not transfer ownership rights.

What is Usufruct Right?

A usufruct right is a limited real right established over a property with the owner's consent or by law, granting the holder the full right to use and benefit from that property. Unlike ownership rights, a usufruct right only grants the holder to use (usus) and benefit from its income (fructus) ; however, the usufructuary cannot sell or dispose of the property.

In maritime trade, usufruct rights are a common practice, particularly on high-cost commercial vessels, as they offer the possibility of independent use from ownership.

What is the legal basis for usufruct rights in maritime law?

Articles 940 and subsequent articles of the Turkish Commercial Code (TTK)contain specific regulations regarding ship ownership and limited real rights (mortgage, usufruct, etc.). The TTK states that usufruct rights must be registered in the ship registry. Registration enables the assertion of usufruct rights against third parties.

the Turkish Civil Code (TMK) also regulate the general principles of usufruct rights. In terms of maritime trade, these provisions are applied together with the Turkish Commercial Code (TTK).

Establishment of Usufruct Rights on a Ship

A usufruct right on a ship can be established in various ways:

By Contract: This is established through a formal contract between the ship owner and the person claiming the usufruct right.
Will or Legal Arrangement: A usufruct right may arise through the will of the testator or through a legal provision.
Court Decision: In certain circumstances, a usufruct right can be established by a court decision.

A usufruct right becomes legally valid and enforceable against third parties upon registration in the ship registry

Rights and Obligations of the Usufructuary

a. Rights

The holder of the ship's usufruct rights may use the ship for their own commercial activities.
They can benefit from the freight revenues generated from the ship.
They have the right to operate and manage the ship; however, this right does not include ownership rights.

b. Obligations

Taking good care of the ship, performing its maintenance and repairs.
To ensure the seaworthiness of the vessel and maintain its safe operation.
Not to make any legal transactions on the ship without the permission of the ship owner.

The Difference Between Usufruct Right and Charter (Lease)

While there are some similarities between usufruct rights and ship chartering, there are significant legal differences

usufruct is a real right , chartering a ship is purely a personal debt relationship.
The usufructuary has the right to operate and use the vessel as if they were the owner.
In a ship charter, the charterer has the right to use the vessel only for the duration of the charter period and does not have any ownership rights.

Termination of Usufruct Right

The usufruct right on the ship terminates in the following situations:

Expiration of the term (in the case of fixed-term usufruct rights),
Agreement of the parties,
If the ship owner and the usufructuary are the same person (the right is forfeited),
Deletion from the ship registry,
The total loss of the ship (sinking or severe damage).

The Importance of Usufruct Rights in Practice

Usufruct rights are advantageous in maritime trade, especially for businesses with insufficient capital. Instead of purchasing a ship, it is possible to benefit from the ship for a long period through usufruct rights. This right can also serve as a guarantee for banks and financial institutions.

Conclusion

In maritime law usufructis a powerful legal mechanism that allows for the use and income generation of a vessel without transferring ownership. It offers significant advantages in terms of providing commercial flexibility, creating capital savings, and clarifying legal relationships between the parties. However, registration of the usufruct right is vital for securing the rights of the parties and preventing potential disputes.

The proper application of usufruct rights in the maritime sector provides long-term commercial benefits for both shipowners and operators.

#SupremeCourtDecisions, maritime trade law, ship usufruct right, ship charter relationship, ship charter agreement, ship registry, limited real rights, Turkish Commercial Code

Single Blog Title

Usufruct Rights in Maritime Law