There is no centralised system in Turkey which is publicly accessible where the assets of an individual or a legal entity are recorded, so it is necessary to resort to publicly available information/data when attempting to build an understanding of the assets owned by a debtor.

The initial publicly available information that proves to be useful where the debtor is a legal entity is the trade registry records kept by the Chambers of Commerce. These records will reveal whether there are registered encumbrances over a company, a company’s registered capital and whether or not a legal entity has entered into liquidation proceedings, and may include board decisions on the purchase of shares/assets.

The second source of publicly available information is the land registry records. Immovable assets owned by legal or real persons are registered to the land registries of districts where such immovable assets are located. There is unfortunately no publicly accessible nationwide system for land registry records, and an investigation should be conducted at each particular land registry where the debtor’s immovable property is likely to be located. Common practice is to conduct investigations at land registries where a debtor’s headquarters/place of residence or branch offices are located, and at other locations where a debtor’s commercial activity is concentrated.

An alternative pre-trial remedy for the identification of assets would be to apply to the court for a precautionary attachment order requesting the attachment of the debtor’s assets. Precautionary attachment is a type of interim relief to which a creditor can resort to obtain security for a monetary claim that is due and is not secured by a lien. If the order is granted, the applicant will be asked to deposit counter-security with the court. The quantum of the counter-security would be determined by the court, but in practice it usually ranges between 10% and 40% of the claim. A precautionary attachment order allows the applicant to apply to the Bailiff’s Office and identify assets owned by the debtor. Assets that can immediately be identified are immovable assets and motor vehicles. The Bailiff can also investigate and freeze a debtor’s funds in Turkish bank accounts and any sums due and payable to the debtor from third parties. Substantive proceedings in relation to the claim must be commenced at a certain period of time following the enforcement of the precautionary attachment order, failing which the order will lapse.

Turkish judgments can generally be classified under two categories: interim judgments and final judgments. Interim judgments consist of the following:

• precautionary attachment orders over debtors’ assets as security for liquid debts; or
• interim injunctions issued in most cases to prevent the opposing party from exercising rights of disposal over assets.

A final judgment, on the other hand, can be rendered as a result of the following:

• actions for compensation/specific performance;
• positive/negative declaratory actions;
• actions for unquantifiable claims; and
• constitutive lawsuits for the abolition or establishment of a legal status (eg, paternity actions, actions for divorce, the annulment of inheritance contracts/testamentary dispositions, etc).

Domestic judgments are enforced by way of initiating execution proceedings through Bailiff’s Offices. Judgments rendered by first-instance courts in civil actions are immediately enforceable, save for certain exceptions. In other words, in most cases, an appeal does not stay the enforcement of a judgment, and the debtor will be required to deposit sufficient security to cover the full amount awarded in the judgment in order to have enforcement of the judgment stayed until the end of the appeal process.

Upon receiving the claimant’s application, the Bailiff’s Office will issue a payment order and serve it on the debtor. The debtor will be given seven days to pay the judgment sum, failing which the creditor can attach the debtor’s assets via the Bailiff. If the assets are attached, the assets will then be subject to a judicial sale and the creditor will seek recovery from the proceeds of the sale. In order to find assets for attachment, the Bailiff’s first step is usually to conduct an investigation – upon the application of the creditor – through an online database available to Bailiffs to ascertain whether the debtor possesses any immovable assets or motor vehicles. The customary procedure is then to investigate funds held in the debtor’s bank accounts. The Bailiff will serve writs on banks operating in Turkey to enquire whether they hold accounts in the name of the debtor. The creditor will also be entitled to demand the attachment of the debtor’s earnings, receivables and wages by service of writs on the debtor’s employer and third parties who may owe debts to the debtor. If the debt has not been satisfied after all of these options have been followed, the usual practice is then to attend with the Bailiff the location(s) where the debtor’s commercial activity is centralised, as well as its headquarters/place of residence, for the purpose of attaching any assets held/kept at such locations.

Alternatively, a creditor may request the declaration of the debtor’s bankruptcy when filing execution proceedings instead of the attachment of its assets. In this case, the debtor will once again be served with a payment order granting seven days for payment and notifying them that they will be declared bankrupt if they fail to make the payment. If the debtor fails to make the payment, the liquidation phase of the company will begin and an administration desk will be formed for the liquidation of the company’s assets and the dissolution of the company. Payment will be made to the creditor from proceeds obtained through the judicial sale of the debtor’s assets, and the debtor’s record will thereafter be deleted from the company register. The potential disadvantage of this alternative route is that third-party creditors of the debtor will be notified of the bankruptcy and liquidation, and will be given an opportunity to register claims with the administration desk, which might lead to higher-ranking claims taking priority over the original creditor’s claim.

Creditors are required to deposit a fixed fee with the Bailiff’s Office when enforcing a first-instance court’s judgment. The fixed fee is a nominal amount that depends on various factors such as the number of defendants, the manner of service of notifications, etc. Furthermore, the costs to be incurred by the Bailiff’s Offices (eg, costs of foreclosure/attachment) will be collected from the creditor at the initial stage, but the creditor is entitled to recover such costs from the debtor when payment or judicial sale takes place if there are sufficient funds to cover the claim, fees and costs.

An application to commence execution proceedings can be drafted and proceedings can accordingly be filed quickly – in a couple of hours – by attending the courthouse in person or through the online national judiciary system. However, it is not possible to estimate the time it may take to finalise the enforcement proceedings as this will depend entirely on the reaction and asset position of the debtor and the stage at which the debt is collected. If payment is made by the debtor in full upon receipt of the payment order, proceedings would end in success in less than a month. Conversely, if the debtor refuses to co-operate, it would then be necessary to proceed with attachment of the debtor’s assets. Identifying the debtor’s assets is not always an easy task, especially when the debtor is evasive, which may lead to delay and may even cause the duration of enforcement to exceed a year. In the bankruptcy option described under 2.2 Enforcement of Domestic Judgments, proceedings may take several years depending on various factors, such as the number of creditors taking part in the liquidation and complications that may arise in the judicial sale of assets and the distribution of the proceeds of sale.

Execution proceedings to be initiated for enforcement of a domestic judgment reveal the assets owned by the debtor since access would be gained to the online national motor vehicle registry database as well as the land registry databases, which would make it possible to identify immovable property and motor vehicles owned by the debtor. Additionally, writs can be served on banks by the Bailiff’s Office upon a request by the creditor, for the purpose of identifying accounts the debtor may hold with the banks in Turkey. Writs can also be served on any other registries/institutions (eg, trade registry, employer) by the Bailiff’s Office to investigate any other assets the debtor may have (eg, company shares, wages, receivables). The creditor would also be entitled to request the Bailiff to attend the debtor’s headquarters or any other location where a movable asset is physically located and to attach the debtor’s asset(s) at that location.

Unfortunately, there is no system available that would reveal the assets owned by a debtor to a creditor whose claim has been attested by a Turkish court judgment bypassing the need to bring execution proceedings.

The enforcement of domestic judgments can be challenged before the Execution Courts if the sum adjudged thereunder has been paid (partial payment would lead to a partial challenge) or time barred. Such a challenge would not automatically stay the proceedings, but if the Enforcement Court sees merit in the challenging party’s grounds, an order for the stay of the proceedings may be granted.

Further challenges can be brought if the payment order is not duly issued and served by the Bailiff’s Office. This situation can occur, for instance, if a claim that has not been admitted is being claimed from the debtor as if it was admitted, if a mistake has been made in the calculation of the interest, or if a declaratory judgment is attempted to be enforced. In addition, the payment order should be duly served on the debtor so that the execution proceedings can continue. Errors in the service process might cause delay in the conclusion of the proceedings if the debtor’s challenge in relation to the service of the payment order succeeds, in which case a fresh service would need to be made.

Declaratory judgments that serve the function of merely detecting the existence or non-existence of a legal issue (eg, the existence of a debt, loss of an asset, breach of a contractual relationship) would not be enforceable against the opposing party. Similarly, constitutive judgments explained above would also be unenforceable, because negative constitutive judgments would be construed as being declaratory in nature and a positive constitutive judgment would establish a legal relationship by itself without the need to be enforced.

Another issue that can hinder enforceability is the lapse of the ten-year time bar applicable to the enforcement of domestic judgments. However, this ground is not taken into account by Bailiff’s Offices and Enforcement Courts on an ex officio basis, and would need to be pled by the debtor.

There is no central register in Turkey of all judgments; all Turkish courts and Bailiff’s Offices keep their own files and store them once judgments are finalised. Therefore, one would need to conduct an investigation before the specific court or Bailiff’s Office that rendered the judgment or handled the proceedings in order to locate and access a particular court file or a judgment contained therein.

There is no procedure that allows the automatic enforcement and execution of a foreign judgment in Turkey. In order to enforce foreign judgments in Turkey, the party seeking the enforcement must commence legal proceedings before the competent Turkish court. These enforcement proceedings are merely procedural in nature. In other words, Turkish courts, in principle, do not delve into the substance of the underlying legal relationship or the judgment.

Before court judgments of a foreign country can be validly enforced in Turkey, one of the following conditions must be met:

• both countries must be party to a bilateral or multinational treaty providing for the reciprocal recognition and enforcement of judgments rendered in each other’s jurisdictions;
• there must be de facto reciprocity between the two countries with respect to the recognition of each other’s court judgments; or
• there must be a provision in the law of the country in which the judgment is rendered that allows the enforcement of judgments of the courts of Turkey.

Turkey is not a party to any multilateral international treaties or conventions on the enforcement of foreign judgments rendered in commercial disputes similar to the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, but the domestic legislation that regulates the enforcement of foreign judgments – namely, the Code of International Private and Procedural Law no. 5718 – is based on the relevant EU Regulations, even though Turkey is not a member of the EU. There are specialised international treaties to which Turkey is a party, such as the Convention on the Contract for the International Carriage of Goods by Road and the Convention concerning International Carriage by Rail, which also address the enforcement of foreign judgments, albeit limited to the scope of the said conventions.

Bilateral treaties have been executed between Turkey and several countries, including Austria, Bulgaria, Croatia, the People’s Republic of China (Hong Kong also benefits from the provisions of the relevant treaty), Italy, the Turkish Republic of Northern Cyprus and Ukraine, which provide for the reciprocal recognition and enforcement of each other’s court judgments.

There is no exhaustive list of countries that have mutual de facto reciprocity with Turkey. In the majority of cases, legal precedents are considered when deciding whether or not reciprocity exists.

Turkey is a party to the 1954 Hague Convention on Civil Procedure. Under Article 18 of the Convention, orders for costs and expenses of proceedings made in a contracting state against the plaintiff or party intervening that are exempted from the provision of security, deposit or payment under the first and second paragraphs of Article 17, or under the law of the state where the proceedings have been instituted, shall, upon a request made through diplomatic channels, be rendered enforceable without charge by the competent authority, in each of the other contracting states. The same rule applies to judicial decisions whereby the amount of the costs of the proceedings is subsequently fixed.

The order for costs and expenses shall be rendered enforceable without a hearing, but subject to subsequent appeal by the unsuccessful party in accordance with the law of the country where enforcement is sought. The authority that is competent to decide on the request for enforcement shall itself examine:

• whether the copy of the judgment fulfils the conditions required for its authenticity, under the law of the country where the judgment was rendered;
• whether, under the same law, the decision has the force of res judicata; and
• whether the part of the judgment that constitutes the decision is worded in the language of the authority addressed, or in the language agreed between the two states concerned, or whether it is accompanied by a translation into one of those languages that is, unless there is agreement to the contrary, certified as correct by a diplomatic officer or consular agent of the requesting state or by a sworn translator of the state addressed.

The enforcement of foreign judgments is subject to the conditions provided under Article 54 of the Code of International Private and Procedural Law no. 5718 (the “Code”). Article 54 stipulates that a foreign judgment may be enforced in Turkey as long as reciprocity exists with the country in which the judgment was rendered and the underlying dispute is not subject to the exclusive jurisdiction of Turkish courts. Accordingly, judgments including but not limited to temporary/interim orders and injunctions, judgments relating to the ownership and possession of immovable property, execution orders and bankruptcy judgments are not enforceable in Turkey.

The Code also stipulates that foreign judgments that are evidently in breach of the Turkish public order cannot be enforced, although there is no clear scope of “Turkish public order” contained in the law or precedents. Examples of matters which Turkish courts have deemed to be against the Turkish public order include breaches of the European Convention on Human Rights (in particular, Article 6: the right to a fair trial) and judgments that are against common decency or morality. The mere incompatibility of the procedural rules applied in the proceedings with Turkish procedural rules does not render the judgment unenforceable. For example, Turkish rules of procedure require all judgments to set out a reasoning for accepting or dismissing an action, but a foreign judgment will not be denied enforcement solely for lacking reasoning.

A foreign judgment rendered by a court that does not have any real relation or link to the subject matter of the case or the parties, even though the court itself may have deemed itself competent, will not be enforced in Turkey. However, Turkish courts will consider this only upon an objection being raised by the party against whom enforcement is sought. This does not mean that the jurisdiction of the court that has rendered the judgment will be reviewed by the Turkish court but that enforcement would be denied if there is a complete lack of connection between the dispute and the court.

Provided that the party against whom enforcement is sought raises an objection, the Turkish court will also examine whether the said party was duly notified or represented before the foreign court under the laws of the country in which the judgment was rendered. In case of a default judgment, the Turkish court will also examine whether the foreign judgment was rendered in the absence of the party in breach of the domestic laws of the foreign country.

An enforcement action should be commenced before the competent Turkish court after the foreign judgment is handed down, served on the parties and finalised in the sense that it is no longer open to appeal. As per the Code, the minimum documents that are required to be submitted to the court are the original of the foreign judgment or a certified copy, and written confirmation that the judgment is final.

The first-instance court’s decision, whether for or against the enforcement of the foreign judgment, will be open to appeal by the parties. Under Turkish law, there is a two-tier appeal system where decisions of first-instance courts can be appealed before the Regional Courts of Appeal and a further appeal can be made to the Court of Cassation. Unlike most other judgments, if appealed by the defendant, a decision for the enforcement of a foreign judgment would be stayed without any requirement for security.

If enforcement is granted and finalised (after all appeals), then the enforcing party must apply to the relevant Bailiff’s Office to request the execution of the enforced judgment.

Enforcement proceedings are subject to a fast-track procedure which is aimed at concluding the proceedings in an efficient and swift manner. Having said this, there are ways that a defendant can delay enforcement, prolonging the conclusion of the first-instance proceedings from six months to more than a year. Each tier of the two tiers of appeals would add at least one year to the time required for the finalisation of the enforcement proceedings.

When filing the enforcement action, the applicant is required to deposit court fees. The court that will hear the case will be assigned at random and will determine the amount of fees to be required on either a fixed basis or a pro-rata basis, depending on the type of the action. However, as there is a division of opinion between the courts as to the type of fees that should be collected in enforcement actions, it is possible that either type of fees may be demanded by the assigned court. The fixed fee is a minimal amount not higher than EUR200, whereas the pro-rata fee is calculated at 6.831% (subject to annual review) of the claim amount. A quarter of the pro-rata fee is payable when filing the action and, if the court rules in favour of the applicant (ie, enforces the judgment), the remaining three-quarters will become payable by the defendant and the applicant will become entitled to recover the first quarter from the defendant.

Please also note that the rules of Turkish civil procedure require foreign applicants to deposit security for costs (cautio judicatum solvi), unless there is a bilateral treaty, a multinational convention, a statutory provision or de facto reciprocity waiving such security requirement.

The enforcement of a foreign judgment can be challenged by the respondent on the following grounds:

• if reciprocity does not exist between Turkey and the country in which the judgment is issued;
• if the dispute falls under the exclusive jurisdiction of the Turkish courts;
• if the foreign court does not have any real relation or link to the subject matter of the judgment or with the parties;
• if the foreign judgment is manifestly against the Turkish public order;
• if the respondent was not duly served or given the opportunity to be represented before the court under the laws of the country in which the judgment was rendered; or
• if the foreign judgment was rendered in the absence of the respondent in violation of the domestic laws of the foreign country.

More information is provided regarding the above grounds in 3.3 Categories of Foreign Judgments Not Enforced.

There is no procedure that allows the automatic enforcement and execution of a foreign arbitral award in Turkey. The party seeking the enforcement must commence an enforcement action before the competent Turkish court. Enforcement proceedings are merely procedural in nature, in the sense that the Turkish court will not delve into the merits of the underlying dispute or the award, save for certain exceptions.

Turkey is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “NY Convention”), and awards falling within the scope of application of the NY Convention will be enforced as per the NY Convention.

Turkey has declared in accordance with Article I(3) of the NY Convention that “it will apply the Convention on the basis of reciprocity, to the recognition and enforcement of awards made only in the territory of another contracting State.” Accordingly, if the jurisdiction in which the foreign arbitral award was rendered is not a party to the NY Convention, the domestic legislation applicable to the enforcement of foreign arbitral awards, namely, the Code of International Private and Procedural Law no. 5718, which for the most part is in line with the NY Convention, will be applied by the Turkish court.

Turkish courts will only enforce final arbitral awards and not interim orders granted by an arbitrator or a tribunal. If a valid arbitration agreement exists between the parties and the dispute is arbitrable, Turkish courts enforce arbitral awards in the manner and following the criteria set out in the NY Convention, or the Code in cases where the NY Convention is not applicable.

When acceding to the NY Convention, Turkey has declared, in addition to the reciprocity requirement mentioned above, that the NY Convention will only be applied in the enforcement of awards that are considered commercial under Turkish law.

Furthermore, the Code requires that the subject matter of the award is recognised as being arbitrable in Turkish law. The scope of arbitrability is not clear but can generally be identified as covering those disputes which the parties are free to refer to arbitration. Examples of non-arbitrability can arise with respect to disputes concerning in rem rights over immovable property, the eviction of tenants, family law matters such as divorce and paternity, bankruptcy and foreclosure. Disputes that are not considered civil, such as criminal or administrative matters, are also not considered arbitrable under Turkish law, and it follows that an award issued in such proceedings will not be enforced by Turkish courts.

An arbitral award that is binding on the parties, has not been set aside or suspended and has thus become finalised can be enforced by way of commencing an enforcement action before the competent Turkish court. The required documents are more or less the same as those required under the NY Convention and the Code: the original or a certified copy of the arbitration agreement and the original or a certified copy of the award. It may also be useful to submit to the Turkish court confirmation in writing issued by the arbitrator/tribunal that the award has become finalised and that it is enforceable and binding on the parties.

The first-instance court’s decision, whether for or against the enforcement of the foreign award, will be open to appeal by the parties. Under Turkish law, there is a two-tier appeal system where decisions of first-instance courts can be appealed before the Regional Courts of Appeal and a further appeal can be made to the Court of Cassation. Unlike most other judgments, if appealed by the defendant, a decision for the enforcement of a foreign award would be stayed without any requirement of security.

If enforcement is granted and finalised (after all appeals), then the enforcing party must apply to the relevant Bailiff’s Office to request the execution of the enforced award.

Enforcement proceedings are subject to a fast-track procedure, which is aimed at concluding the proceedings in an efficient and swift manner. Having said this, there are ways that a defendant can delay enforcement, prolonging the conclusion of the first-instance proceedings from six months to more than a year. Each tier of the two tiers of appeals would add at least one year to the time required for the finalisation of the enforcement proceedings.

When filing the enforcement action, the applicant is required to deposit court fees. The court that will hear the case will be assigned at random and will determine the amount of fees to be required on either a fixed basis or a pro-rata basis, depending on the type of the action. However, as there is a division of opinion between the courts as to the type of fees that should be collected in enforcement actions, it is possible that either type of fees may be demanded by the assigned court. A 2016 amendment of the Code of Fees has clarified the position with respect to the enforcement of arbitral awards, stipulating that pro-rata court fees shall not be applicable in the enforcement of domestic and foreign arbitral awards.

Please also note that the rules of Turkish civil procedure require foreign applicants to deposit security for costs (cautio judicatum solvi), unless there is a bilateral treaty, a multinational convention, a statutory provision or de facto reciprocity waiving such security requirement.

There are specific procedural grounds on which an enforcement action may be dismissed by the Turkish courts. If the party seeking enforcement in Turkey is also a party to the NY Convention, then the exhaustive list under Article V sets out the grounds available to challenge the enforcement of a foreign arbitral award, which are as follows:

• the parties to the arbitration agreement, under the law applicable to them, were under some incapacity, or said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made;
• the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or the arbitration proceedings, or was otherwise unable to present their case;
• the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, the part of the award that contains decisions on matters submitted to arbitration may be recognised and enforced;
• the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place;
• the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made;
• the subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
• the recognition or enforcement of the award would be contrary to the public policy of that country.

If the party seeking enforcement is not a party to the NY Convention, then the Code will apply, which governs the enforcement of foreign arbitral awards. The grounds available under the Code are also exhaustive, as follows:

• there is no valid arbitration agreement;
• the award is in violation of common morality or the public order;
• the dispute is non-arbitrable and/or is under the exclusive jurisdiction of Turkish courts;
• the parties have not been duly represented before the tribunal and have not retrospectively submitted to the arbitral proceedings;

• the party against whom the award is being enforced was not duly served with the notices of the tribunal’s appointment or was deprived of the opportunity to issue claims or counterclaims in violation of their right to a fair trial;
• the arbitration agreement or clause is null and void under the law which the parties have agreed to apply to the arbitration agreement, or under the law of the country where the award has been rendered in case the parties have not agreed on the law applicable to the arbitration agreement;
• the appointment of the tribunal or the tribunal’s application of the procedure is in violation of the agreement between the parties, or the laws of the country in which the award was rendered if no procedure has been agreed between the parties;
• the award does not relate to the matters included in the arbitration agreement or exceeds the limits of the agreement;
• the award is not finalised under the laws of the country in which the award was rendered or the substantive law that governs the dispute; or
• the award is not enforceable or is not binding or has been annulled by the relevant authority.