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When is bond requirement necessitated? How does it work?

Foreign plaintiffs (individuals and legal entities) are required to deposit security upon initiation of a court action. In case the court rejects the claim, the security is used to compensate for court and enforcement fees and their adversary's damages. The court determines the amount of the security. Generally, the security is between 15-100% of the amount in dispute and it can be deposited in the form of cash, securities, real property (mortgage) or bank letters of guarantee (bond).

A plaintiff is exempt from the security obligation if there is a bilateral or multilateral treaty between Turkey and the plaintiff's country of citizenship in this regard.

In addition to the foregoing, a plaintiff must deposit security with the court in the following cases regardless of the nationality:

A private plaintiff in a criminal action is required to deposit security for court fees and for charges that may be imposed upon the defendant on trial, if such plaintiff does not reside in Turkey.

  • In an action to discharge/ nullify a debt pursuant to the Enforcement and Bankruptcy Code the debtor/ plaintiff is required to deposit a security equal to at least fifteen but not more than one hundred percent of the debt in question.
  • In an action for reinstatement (yargilamanin iadesi) the plaintiff is required to deposit security in an amount to be determined by the court.
  • In a shareholder's action for damages filed against the directors of a corporation, the shareholder is required to deposit his/ her shares in the corporation as security with a bank until the finalization of the legal proceedings, in order to provide for adequate security for the corporation's possible damages.
  • In an action to annul a general assembly (shareholders') resolution of a stock corporation, the plaintiffs can be asked to deposit security to compensate for the corporation's possible damages arising from a wrongful action.
  • The party that seeks interim injunctive relief is required to come up with security that is sufficient to compensate for the other party's damages if the injunction is finally decided to be unwarranted. On the same token, a party against whom an order for interim injunction relief has been entered can have the interim order lifted if it deposits adequate security.
  • The general rule under Turkish law is that a stay order is not enforceable on an appeal under the enforcement of the lower court's judgement. Where enforcement of a particular judgement is sought before the appeal proceedings are concluded, the party against whom the judgement was rendered can stay enforcement until the outcome of the appeal by depositing with the court adequate security to protect the other party from any possible damages. The request for a stay is filed with and decided by the Court of Appeals (Yargýtay). The amount of such security is generally equal to the amount of the judgement, plus a reasonable margin for interest.

The recognition and the enforcement of foreign court judgements are an exception to the general rule of “no-stay”. A court order to recognize and to enforce a foreign judgement cannot be submitted for enforcement unless and until it has become final; i.e. unless and until the relevant appeal proceedings have been concluded or unless and until the time period to file an appeal has expired.

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Can foreign Civil and Commercial Judgments and Arbitration awards be enforced in Turkey?

Final foreign civil and commercial judgements and arbitration awards can be enforced in Turkey in accordance with the terms of multilateral or bilateral treaties; or in the absence thereof, pursuant to the Rules for International Private Law and Civil Procedure (“ MÖHUK ”).

(a) Turkey is a party to:

  • a number of bilateral treaties regarding international arbitration and the enforcement and the recognition of foreign arbitration awards;
  • the New York Treaty regarding the Recognition and Enforcement of Foreign Arbitration Awards, dated June 10, 1958 (= Yabanci Hakem Kararlarinin Taninmasi ve Icrasi Hakkinda 10 Haziran 1958 tarihli New York Sözlesmesi );
  • the European Treaty for International commercial Arbitration, made in Geneva on April 12, 1961 (= Milletlerarasi Ticari Hakemlik Konusundaki 21 Nisan 1991 Tarihindeki Cenevre'de Yapilan Avrupa Sözlesmesi);
  • a number of multilateral treaties that provide for the recognition and the enforcement of certain family-law related foreign judgements.

(b) MÖHUK requires an order of enforcement by a Turkish court to enforce foreign judgements and awards:

  • “The enforcement of judgements in civil matters rendered by foreign courts, which judgements have become final in accordance with the law of that country is contingent upon the entering of an order for enforcement of the said judgements by the Turkish court of proper jurisdiction.”
  • “Foreign arbitration awards that are final and enforceable can also be enforced [in Turkey].”
  • “Panel judgments by foreign courts in regard to personal rights can also be enforced.”

The conditions for enforcement of a foreign judgment are as follows:

  • there must exist an agreement between Turkey and the State where the judgment was rendered that provides for reciprocal enforcement of judgments by the courts of one another; or
  • there must be codified law or case law in the State where the judgment was rendered that allows a Turkish courts judgment to be enforced in that jurisdiction; and
  • the judgment should be one that is not within the exclusive jurisdiction of Turkish courts; and
  • the judgment may not violate Turkish public policy; and
  • the person against whom enforcement is sought shall not have objected before a Turkish court alleging that such person was not properly invited to participate in the foreign court proceedings (a claim for lack of due process); that she/he was not properly represented before the said foreign court; or that a default judgment was rendered in violation of applicable law; and
  • if the judgement for which enforcement is sought involves the personal status ( ahkam-i sahsiye ) of a Turkish citizen, the defendant can prevent such enforcement by alleging before the Turkish court that the foreign court failed to apply the law of proper jurisdiction pursuant to Turkish conflict of laws rules.

The conditions for the enforcement of a foreign arbitration awards are as follows:

  • there must exist a separate arbitration agreement or the main contract must include a dispute resolution clause that provides for arbitration; and
  • the arbitration agreement or dispute resolution clause must be valid and enforceable under the law of the contract or, in the absence of a designation by the parties of the law of the contract, under the law of the place where the arbitration award has been rendered; and
  • the arbitration award shall not violate [Turkish] public policy or moral values [that prevail in Turkey]; and
  • the subject matter of the arbitration award must be one that can be resolved by arbitration under Turkish law; and
  • the person against whom enforcement is sought shall not have objected before a Turkish court alleging that such person was not properly invited to participate in the foreign arbitration proceedings (a claim for lack of due process); that he/she was not properly represented before the arbitration tribunal ; and
  • the selection and appointment of the arbitrators shall not violate the parties' agreement or, in the absence of an agreement between the parties regarding such selection and appointment, shall not violate the law of the place where the arbitration award was rendered; and
  • the award shall not cover matters that exceed the scope of the arbitration agreement or the dispute resolution clause; and
  • the award shall be final, enforceable and valid and in force under the laws of the jurisdiction where it was rendered.

Note that due process is a matter of public policy and will affect the enforceability of a foreign award or judgement in Turkey. In order to avoid frustration during enforcement attempts, it is crucial for the plaintiff to take all measures to avoid allegations that the defendant did not have adequate opportunity to defend himself/ herself. All procedural aspects of service of process must have been complied with.

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How is one served in Turkey in connection with a foreign legal action?

A defendant in Turkey can be served in connection with a foreign action in accordance with the procedure set forth in the Hague Convention dated November 15, 1965 regarding the Service Abroad of Judicial and Extrajudicial Documents in Civil or commercial Matters, or the Hague Convention dated March 1, 1954 regarding Rules of Civil Procedure . If the conventions are not applicable, service can also be made in accordance with bilateral treaties or consular agreements that cover service of process, if any.

The most common method of service is the 1965 Convention method, which applies in case both Turkey and the State where the foreign proceedings are to be initiated are parties to the Convention.

1. The Hague Convention methods of service are exclusive among the member States

Article 1 of the Hague Convention makes it clear that it establishes exclusive procedure for service of process in international litigation upon persons in contracting States, whose addresses are known. It states in part “the present [Hague] Convention shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad”.

2. Service must be submitted through designated central authorities

Under Article 2 Paragraph 1 of the Hague convention, each contracting State designates a Central Authority that shall receive service of process requests emanating from other contracting States. The Central Authority is then to effect service in accordance with the procedures set forth in the Hague Convention.

Under Article 3 of the Hague Convention, a plaintiff may effect service upon the defendant, by filing with the Central Authority in his/her own State a request in the format prescribed by the Convention. The Hague Convention thus makes it clear under Article 3 that it is the authority of the judicial officer in the plaintiff's country that must address a request for service to the Central Authority of the Defendant's country.

Turkey has designated the “General Directorate of Civil Affairs of the Ministry of Justice” in Ankara, Turkey ( Adalet Bakanlýðý Hukuk Isleri Genel Mudurlugu ) as its Central Authority (hereafter, the ”Turkish Central Authority”). Declaration of the Government of the Republic of Turkey in acceding to the Hague Convention, delivered by Turkey on February 28, 1972.

3. The Turkish Central Authority forwards the documents through the local judicial authorities

The Turkish Code on Service (Law No. 7201, dated 1959) (the “Turkish Code”) and the regulations thereunder exclusively govern service of process in Turkey under Turkish domestic law. Specifically, Article 44 of the Regulation for Service, enacted under the Turkish Code (hereafter, the “Regulation”) sets forth how documents received from foreign authorities can be served upon Turkish and foreign nationals within Turkey's territory. Under the Article 44 of the Regulation, service of process with respect to documents received from a foreign authority must be performed exclusively by the Turkish Court having jurisdiction over the defendant. Under the Turkish Law, there is no authority for any form of service other than those mandated by the Turkish Code and the regulations thereunder.

4. Alternative methods of service are precluded

Although, Art. 10 of the Hague Convention acknowledges other means of effectuating service (i.e. “party-to-party service”, “court-to-court service”, and “interested person-to-judicial officers, officials or other interested persons” service), these are allowed only if the defendant's State does not object to such method of service. Paragraph 5 of Turkey's Declaration of Accession to the Hague Convention declares that it is opposed to the use of the methods of serving judicial documents listed in Article 10 of the Hague Convention.

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Note that due process is a matter of public policy and will affect the enforceability of a foreign award or judgement in Turkey. In order to avoid frustration during enforcement attempts, it is crucial for the plaintiff to take all measures to avoid allegations that the defendant did not have adequate opportunity to defend himself/ herself. All procedural aspects of service of process must have been complied with.



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What are the Litigation costs?

Litigation costs comprise monies charged by the court for handling the case. These principally include the following:

  • Filing fee: The fee can be (1) a flat rate that is set by statute (in cases where the value of the claim cannot be reasonably determined in terms of money) or (2) a variable rate equal to 0.054 of the amount claimed or of the value of the dispute that is measurable in terms of money. One fourth of this amount is payable by the plaintiff upon initiation of the case, i.e. when the complaint is filed. The remainder is payable within two months from the date of the judgement.
  • Fees for notices sent through the clerk of the court; attachment fees; travel and other costs incurred by the court and its staff for discovery proceedings; fees to enforce interim injunctive relief, if any.
  • Travel and accommodation costs for witnesses.
  • Fees paid to court-appointed expert witnesses; costs incurred by the experts for the preparation of the expert report commissioned by the court.

Certification fees and related costs to obtain copies of the documents from the files of the administrative agencies.

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How are the Turkish Courts categorized? How do they work?

The court system is divided into three main categories: administrative courts, criminal courts and civil courts. Each one of these has a range of courts, from courts of first instance to the respective Court of Appeals, also known as the Supreme Court.

1. Civil Courts

(a) Courts of First Instance Civil courts of first instance are divided into two: (i) courts of general jurisdiction and (ii) specialty courts.

Courts of general jurisdiction are divided into two subgroups: (i) sulh hukuk courts and (ii) asliye courts. At least one sulh hukuk court is established in each municipal jurisdiction. Sulh hukuk courts handle matters that are identified by statute with limitation. All other matters fall within the jurisdiction of asliye courts.

At least one asliye hukuk court is established in each municipal jurisdiction. There is one presiding judge in each such court. In major cities and municipalities, asliye courts are also designated as commercial courts (= asliye ticaret courts). These have jurisdiction specifically over commercial matters. Asliye ticaret courts have a panel of three judges.

Specialty courts are established for a specific purpose, as they provide expertise in particular matters: labor courts ( iþ mahkemeleri ) have exclusive jurisdiction over disputes between an employer and its employees arising from an employer and its employees arising from an employment relationship; over claims that are raised pursuant to the Labor Code, the Union Code, the Collective Bargaining Code, and the Social Security Code. The Enforcement Review Authority (“ERA”) known as the Icra Tetkik Mercii handles cases in connection with enforcement proceedings which are a kind of summary proceedings. In provinces where an icra tetkik mercii is not present, the local asliye hukuk court assumes the role. Consumer courts have been established since 2000 to handle product liability claims and all other disputes between a consumer and a provider of a service or product.

(b) High Courts The Court of Appeals ( Yargitay ) is the court of appeals in both civil and criminal matters. The civil matters section of the Court of Appeals comprises of twenty one Civil Chambers, each of which has a panel of five judges one of which is appointed as the chairman. Additionally, each chamber has a number of-so-called “investigating judges” (= tetkik hakimi ) whose duties include the reviewing of all matters pending and of all evidence presented with a view to prepare for the panel a report and an advisory opinion.

Members of all the twenty one Civil Chambers form the General Assembly for Civil Matters (= Hukuk Genel Kurulu or “HGK”). HGK decisions are reported as case law.

2. Criminal Courts

Criminal courts comprise of (i) courts of general authority and (ii) specialty courts. Courts of general authority include the justice of the peace courts (= sulh ceza courts); criminal courts of first instance (= asliye ceza courts) and high criminal courts (= aðýr ceza courts). The first two are single judge courts. A three judge panel presides over the third one.

Specialty courts include the constitutional court (only when it acts in the capacity of a criminal court with the authority to try high ranking statesmen such as the president, or the ministers), state security courts, traffic courts and juvenile courts. Special courts handle matters that are specifically provided for in the laws which served as the basis for the establishment of such courts. For example, traffic courts are established based on the Highway Traffic Act of 1983. Traffic violations and offences are defined in the said law and are within the jurisdiction of the traffic courts.

The Yargitay is the court of appeals in criminal matters. It comprises of eleven chambers. HGK's corresponding entity in criminal matters is the General Assembly for Criminal Matters (= Ceza Genel Kurulu , or “CGK”).

3. Administrative Courts

Administrative courts include (i) courts of first instance (= idare courts), (ii) regional administrative courts ( bölge idare courts) and (iii) the Council of State/ State Supreme Council ( Danistay ). Tax courts are deemed to be administrative courts of first instance.

Administrative courts have jurisdiction over disputes that involve an act of the administration. All acts of the administration are subject to judicial review.

4. Other Courts

The Constitutional Court (Anayasa Mahkemesi ) is the highest judicial authority in the Republic of Turkey whose principal duty is to ensure that the Legislation does not contradict the Constitution. If a law is claimed to violate the Constitution, it can be challenged before the Constitutional Court who would then render an opinion as to the question of constitutionality.

Another function of the Constitutional Court is to try members of the Executive branch; i.e. the President, the Prime Minister, Ministers, etc. Members of the Executive Branch enjoy immunity from trial for their alleged offences. They can only be tried by the Constitutional Court if the Parliament lifts such immunity.

There is a special criminal court system for military matters. The lower courts are referred to as the Military Courts (= askeri mahkemeler). The Military Court of Appeals is the Askeri Yargitay . Except for the similarity of the name, the military court of appeals has nothing to do with the civil or criminal court of appeals. It is an independent court whose jurisdiction is limited to offences committed by or against the military personnel.

The Court of Conflicts (= uyusmazlik mahkemesi ) resolves jurisdictional conflicts between the civil court system and the administrative court system. If there is a disagreement as to whether a particular matter should be brought before civil or administrative courts, the question of jurisdiction is decided upon by the Court of Conflicts.



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How did the Turkish legal system evolve?

The Republic of Turkey was established in 1923. In spite of her strong Ottoman heritage, Turkey's legal system is not based on the Islamic laws that prevailed during the Ottoman years. The Mecelle, which was a collection of the Islamic laws in force between 1876 and 1925 has been succeeded by a set of new laws based on the Roman law.

The founder of the Republic, Mustafa Kemal Atatürk, introduced a number of reforms to change Turkey from a nation dominated by a strong Ottoman and Islamic influence to a modern society with its distinctive place among other nations in the twentieth century. Perhaps the most important of the Atatürk reforms was in the field of law. Atatürk imposed radical changes in legislation by adopting the laws of the various European nations in the Turkish legal system.

In 1926, The Swiss Civil Code and the Swiss Code of Obligations were adopted with some minor alterations. The Turkish Civil Code and the Turkish Code of Obligations are based on the law of the Swiss Canton Neuchatel. They include the law of persons, family law, property law, contracts, torts, and unjust enrichment. Consequently, Switzerland had a great impact on the change of social life in Turkey and the Turkish society.

Similarly, the 1929 Turkish Code of Enforcement and Bankruptcy was based on the Swiss Federal Code of 1889. In 1965 the Code of Enforcement and Bankruptcy was replaced by a new law that was prepared specifically for Turkey; taking into account the characteristics and the requirements of local business, economy and commerce.

The 1926 Panel Code is based on the Italian Panel Code of 1889. It is still in force, although it has been amended several times to take into account local characteristics. In contrast, the Rules of Criminal Procedure are based on the corresponding German law.

Administrative law was influenced by the French administrative law. Its development commenced in 1839 and continued through the early years of the Turkish Republic. Unlike the Civil Code, the Code of Obligations and the Penal Code, the Turkish Administrative Code was not adopted from the laws of a particular country. It is a sui generis system that was influenced primarily by the French law.

A similar approach was taken in the preparation of the Commercial Code. This code was influenced in part by the 1897 German law. However, in spite of the similarities, it is unique and not an adaptation.

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The information provided on these pages are free of charge and only briefly cover the subject matters discussed therein. It is not presented, nor is it intended to be relied upon as legal advice without further consultation with a lawyer admitted to practice Turkish law. These pages include general discussions only; each case provides a unique set of fact that may result in the information stated herein not to address your particular needs. The contents of this site are updated from time to time on an irregular basis and may not contain the most up-to-date information. Please consult with a lawyer for current and for case-specific advice.