Superyacht Arrest & Refit Disputes in Turkey: A Legal Guide for UK Owners

Turkey has become one of the world's leading destinations for superyacht construction and winter refit projects, with world-class shipyards clustered around Tuzla, Antalya, Bodrum, and Marmaris. British owners, yacht management companies, and offshore flag registries regularly send vessels to these yards for high-quality, cost-effective work. But when a relationship breaks down — over delayed delivery, inflated invoices, or unauthorized works — Turkish shipyards frequently resort to maritime liens and vessel arrest to pressure owners into paying disputed sums, trapping multi-million-pound assets in Turkish waters at the worst possible moment of the charter season.

In This Legal Guide:

• Turkey's Superyacht Refit Industry & Why Disputes Arise
• The Trap: Inflated Invoices & Unauthorized Refit Works
• The Shipyard's "Right of Retention" (Hapis Hakkı) — and Its Limits
• Vessel Arrest Under Turkish Law & the 1999 Arrest Convention
• Step-by-Step: How to Lift a Yacht Arrest in Turkey
• Unpaid Crew Claims & Maritime Liens
• Jurisdiction Clauses: Does LMAA/London Arbitration Protect You?
• P&I Club LOUs vs. Turkish Bank Guarantees
• Counter-Claims: Recovering Charter Season Losses
• Prevention: Structuring Refit Contracts to Avoid Disputes
• Frequently Asked Questions

Turkey's Superyacht Refit Industry & Why Disputes Arise

Over the past two decades, Turkey has grown from a niche builder into a genuine competitor to Italy, the Netherlands, and Spain in both new-build and refit markets. Tuzla, on Istanbul's Anatolian shore, hosts one of the densest clusters of steel and aluminium shipyards in the Mediterranean, while Antalya, Bodrum, and Marmaris serve as major winter lay-up and refit hubs for the charter fleet.

The commercial appeal is obvious: skilled labor, competitive pricing, and shipyards capable of handling everything from teak deck replacement to full superstructure conversions. The legal risk is less obvious to foreign owners until it materializes. Turkish shipyard contracts are frequently drafted loosely, verbal approvals for "extra works" are common on the yard floor, and the legal mechanisms available to a shipyard to secure payment — retention of the vessel and court-ordered arrest — are considerably more aggressive than what a UK or Mediterranean-based owner might expect.

The Trap: Inflated Invoices & Unauthorized Refit Works

A recurring pattern involves a UK owner entering into a refit contract — often based on MYBA-style terms or a bespoke Turkish local agreement — with a shipyard in Tuzla or one of the southern marinas. As the agreed launch date approaches, the shipyard issues a final invoice containing substantial cost overruns for "additional works" that were never formally approved in writing by the owner's representative, project manager, or the yacht's captain.

If the owner disputes the additional charges, the shipyard's leverage is immediate: it simply does not launch the vessel, and it withholds the customs and port clearance documentation the owner needs to move the yacht out of Turkish waters. What began as a commercial disagreement over an invoice quickly becomes a jurisdictional standoff, with the vessel effectively held hostage in the yard.

The Shipyard's "Right of Retention" (Hapis Hakkı) — and Its Limits

Turkish law grants contractors, including shipyards, a statutory Right of Retention (Hapis Hakkı) over goods in their possession to secure payment for materials and labor supplied. In principle, this is a legitimate security mechanism found in most legal systems. In practice, some Turkish shipyards use it disproportionately — holding an entire multi-million-pound vessel over an invoice that represents a small fraction of the yacht's value, and that is itself heavily disputed.

When Retention Becomes Abusive

Turkish courts recognize the general civil law principle that the exercise of a right must not amount to an abuse of that right (hakkın kötüye kullanılması). Where the value of the retained asset is grossly disproportionate to the disputed debt, or where the shipyard is using retention purely as commercial leverage rather than genuine security, it becomes possible to challenge the retention before the Commercial Courts and seek release of the vessel pending resolution of the payment dispute.

Vessel Arrest Under Turkish Law & the 1999 Arrest Convention

Turkey is a contracting party to the 1999 International Convention on Arrest of Ships, which sets out a closed list of "maritime claims" for which a vessel may be arrested — including claims for construction, repair, or equipment of a ship. Once a Turkish court grants an arrest order (İhtiyati Haciz), the vessel is physically prevented from leaving port; the Harbour Master and Coast Guard are instructed accordingly.

Grounds for Arrest Must Be Genuine

Not every payment dispute qualifies as a maritime claim under the Convention, and Turkish courts must be satisfied that the underlying claim is credible before granting an arrest. This creates a real opportunity for owners: if the shipyard's claim is inflated, unsubstantiated, or based on work that was never authorized, the arrest order itself can be challenged as improperly granted.

Step-by-Step: How to Lift a Yacht Arrest in Turkey

Once a vessel has been arrested, owners generally have two parallel routes available, and pursuing both simultaneously often produces the fastest result:

Unpaid Crew Claims & Maritime Liens

Owners and management companies should treat crew wage disputes with the same urgency as shipyard disputes. Prompt legal review of the underlying employment records — contracts, payslips, sign-off dates — is usually sufficient to strike down exaggerated claims before they escalate into a vessel arrest.

Jurisdiction Clauses: Does LMAA/London Arbitration Protect You?

Many refit and management contracts include an LMAA or other London arbitration clause, on the assumption this keeps disputes out of Turkish courts entirely. In practice, this protects the merits of the dispute — but not the vessel's physical location.

Even where a valid foreign arbitration clause exists, Turkish courts retain jurisdiction to order a provisional arrest of a vessel physically present in Turkish territorial waters, as an interim protective measure pending the outcome of arbitration abroad. The arbitration clause is a powerful tool for resolving who ultimately owes what — but it does not, by itself, prevent the yacht from being arrested locally in the first instance.

P&I Club LOUs vs. Turkish Bank Guarantees

Unlike courts in the UK, Malta, or the Netherlands, Turkish judges are generally reluctant to accept a foreign P&I Club Letter of Undertaking directly as court security. This surprises many owners who assume their P&I cover will resolve the situation immediately.

The practical workaround is to "front" the P&I Club's undertaking through a correspondent Turkish bank, which then issues a domestic bank guarantee that Turkish courts recognize and accept. Arranging this in advance — before a dispute arises — can shave days off the release process when time is critical.

Counter-Claims: Recovering Charter Season Losses

An unlawful or excessive arrest is not without consequence for the shipyard. Where an owner can demonstrate that a wrongful retention or arrest caused the vessel to miss confirmed charter bookings, Turkish law allows counter-claims against the shipyard for consequential losses — including lost charter income and any contractual penalties owed to charterers as a result of the delay.

Building this claim requires early evidence gathering: confirmed charter contracts, brokerage correspondence, and a clear timeline showing the shipyard's delay directly caused the missed bookings. This evidence is far easier to compile at the time of the dispute than months later.

Prevention: Structuring Refit Contracts to Avoid Disputes

Most disputes of this kind are preventable at the contract stage. Before committing a vessel to a Turkish shipyard for the season, owners and management companies are well advised to have the refit contract reviewed under Turkish law specifically — not only under English or MYBA-style terms — with particular attention to:

• Clear, written change-order procedures for any works beyond the original scope
• A defined dispute resolution and arbitration clause, drafted so it is enforceable against a Turkish party
• Milestone-based payment structures tied to independently verified progress
• Pre-approved lists of authorized signatories for on-site instructions

Frequently Asked Questions