Turkey is one of the increasingly important destinations for commerce, travel as well as investment with significant opportunities. Since Turkey is an important commercial hub as such, the possibility of disputes over which Turkish courts are competent to resolve are quite high under the conflicts of law rules. The main code that regulates lawsuits involving foreigners and foreign elements in Turkey is the International Private and Civil Procedure Law.  In addition, depending on the individual case, other legislation can also be applied to the underlying dispute.  This article looks into the procedural rules of litigation in Turkey within the framework of Turkish Private Law. 

How to file a lawsuit in Turkey?

First Step:  Analysis of the Dispute and Drafting the Petition

Before filing a lawsuit before Turkish courts, the correct analysis of the concrete dispute between the parties is one of the most important issues to consider. According to Turkish Law, courts can hear a case only if it is authorized by law. Basically, the Turkish judiciary has three branches: criminal, civil, and administrative. If a criminal act is at issue, the victim can sue before the criminal courts. 

An administrative lawsuit can be filed before administrative courts against an unlawful act or transaction of the administration to revoke such measure as well as claim damages.

As an example, in the area of public procurement, administrative courts adjudicate cases regarding public tender procedures, as well as disputes arising from administrative acts such as prohibition from participating in public tenders. It should however be stated that, under the relevant law, once an administrative authority and a real or legal person enter into a public procurement contract following the completion of the tender procedure, the administrative court is no longer competent. This is because contracts executed subject to the Public Procurement Contracts Law are legally deemed as private contracts between two parties, and in case of disputes, civil courts have jurisdiction over them. 

Civil courts have jurisdiction to resolve cases involving private law issues, which are the most common cases between trading foreign and local parties. For instance, a foreign party that is unable to collect its receivables from a local party should file a lawsuit before the civil courts. 

The civil courts hear the cases based on their area of specialization, as regulated under Turkish Law. Accordingly, in the Turkish legal system, civil courts are divided as follows:

1. Courts of General Jurisdiction,

2. Courts of Peace,

3. Commercial Courts

4. Labor Courts

5.  Family Courts

6. Enforcement and Execution Courts

7. Consumer Courts

8. Cadastral Courts

9. Civil Courts for Intellectual and Industrial Property Rights 

The Civil Courts of General Jurisdiction are the courts that have the widest jurisdiction over civil law disputes, and therefore,  there is at least one civil court of general jurisdiction in any jurisdictional area; whereas the specialized courts are mainly found in larger jurisdictional areas in Turkey. Thus, in the event that there is no specialized court at the place where the lawsuit must be filed according to the rules of jurisdiction, the courts of general jurisdiction are competent to hear the case in the capacity of that specialized court.

In addition to the above, the civil court of general jurisdiction is the competent court for the recognition and enforcement (“tanıma ve tenfiz”) of foreign judgments and arbitral awards. The same way in almost all jurisdictions worldwide, foreign court decisions and international arbitral awards need to obtain a recognition and enforcement decision by Turkish Courts to become enforceable in Turkey. Consequently, those who wish to have their foreign judgments enforced in Turkey must first file a lawsuit for their recognition or enforcement, and then apply to the execution offices with the enforcement decision. 

Civil commercial courts handle commercial disputes and those that arise between merchants.  When real or legal person merchants doing business in Turkey have a legal dispute with their Turkish counterparts, such as breach or unlawful termination of the contract,  then the commercial courts are competent to resolve the conflict.

Apart from the correct determination of the competent court for the underlying dispute, case analysis is also crucial for deciding on the claims to be submitted to the court. It is very important that the claims are determined in a precise and clear manner. This is because, in Turkish law, claims and defenses cannot be expanded beyond the first petition subject to few exceptions.

Second  Step: Submission of the Petition to the Court and Payment of Court Fees

A lawsuit is filed when the petition is submitted to the competent court, and the legal fees and expenses are deposited with the court’s offices. Under  Turkish Law, there is a dual juridical fee structure, consisting of proportional fees or fixed fees. The fees and expenses are determined based on the title of the parties (consumer, merchant etc.), the subject of the case, and the amount of dispute. 

In addition to that, due to Turkish Law, the party who relies on a certain evidence must pay the expenses relating to the evidence.  For instance, if a party would like to rely on an expert report, she/he must pay for such expert’s expenses. 

Apart from the above, foreign parties involved in a Turkish lawsuit are also subject to a security fee requirement. Security fee can be defined as a sum of money to be paid to the court’s offices, usually in the amount of 10-20% of the disputed amount, to be able to file a lawsuit by foreign real or legal persons. That being the case, if there is an agreement between Turkey and the state of residence of the foreign plaintiff, or if, in practice,  the reciprocity principle applies, the foreigner may be exempted from payment of the security fee.

Third Step: Petition of Reply, Expert Report, Witnesses

The respondent has to submit its reply within two weeks following the service of the petition according to Turkish Law. After the petition of reply, if deemed necessary, the court forwards the case file to the expert/panel of experts,  hears the witnesses, examines the new submissions. The parties can object to the expert report and statements of witnesses etc. During this phase, the parties attend hearings and expert examinations in certain specific situations.

Fourth Step: Decision

When the court completes its examination, it renders a judgment.  Every court judgment  must include the reasoning of the judges and indicate the time period and procedure of appeal. The party against whom the court decides can appeal the decision within the prescribed time-limit, whereas the other party declared rightful by the court can proceed with enforcement and execution. In Turkish Law, in principle, appealing a court decision does not suspend the execution, subject to limited exceptions. However,the appealing party may request suspension of the execution to the Appeal Court by depositing a security fee to the execution offices, in which case execution is suspended until the appellate court renders its decision. 

Litigation in Turkey, briefly summarized above, is governed by a complex set of procedural rules that are subject to changes from time to time. This makes it necessary to carefully assess the relevant cases and determine the correct legal strategy to achieve timely and favourable results in litigation which can be a lengthy process. Therefore it is recommended to always obtain competent legal assistance before filing a lawsuit in Turkey to avoid any loss of rights.   

Introduction

Turkey is one of the increasingly important countries in a globalized world thanks to its unique location and growing economy, attracting investors or tourists from all over the world. As a consequence, legal disputes involving Turkey or Turkish parties sometimes become inevitable, leading to lawsuits that may have to be filed with Turkish courts.

Basically, there are no significant differences in litigation for Turkish citizens and foreigners, with the exception of certain specific regulations for the latter. This article seeks to explain the general issues concerning litigation in Turkey and outlines the special regulations set out for foreign parties.

Territorial Jurisdiction 

The competent court in Turkey for disputes involving a foreign element is determined according to the Turkish International Private Law and Procedural Law (IPLPL) numbered 5718 and  the Turkish Code of Civil Procedure (CCP) numbered 6100. Since the IPLPL Law No. 5718 is the main code containing the specific regulations for the conflict of laws, its application takes priority over the CCP. Thus, the general provisions of territorial jurisdiction of the CCP apply, unless there is  a specific provision regarding the competent court in the IPLPL. 

Pursuant to Article 40 of the IPLPL, “The international jurisdiction of the Turkish courts shall be determined by the domestic jurisdiction rules.” The following articles of said Law determine the competent court based on the type of the dispute. For example, pursuant to Article 42, lawsuits related to the personal status of foreigners such as guardianship, tutelage, declaration of death shall be heard at the court of the place where the person is resident in Turkey, and if the person is not resident in Turkey, the lawsuit shall be heard at the place where his/her assets are located.  

As another example, Article 43 sets out the competent court in inheritance cases. In accordance with this article, lawsuits related to inheritance must be heard at the court of the last domicile of the deceased in Turkey. If the deceased’s last domicile is elsewhere, then the lawsuit must be filed at the place where the heritage is located. 

IPLPL also specifies special territorial jurisdiction rules for disputes arising from consumer, employment and insurance contracts. For the types of disputes other than those listed in IPLPL, Law No. 6100 (CCP) applies. For example, according to the Article 10 of Law No.6100, in cases arising from contracts, unless specified in the contract, the competent court can also be the court where the contract will be performed. Said article is applicable to lawsuits arising from most contracts, except for employment, consumer and insurance contracts, as listed in IPLPL No 5718.  

Finally, tort cases can be given as another example. Pursuant to Article 16 of Law No.6100 “For actions arising from tort, the court in the jurisdiction in which the tortious act was committed or where the act occurred or will likely occur its effect or the court at the domicile of the aggrieved person shall have jurisdiction.” 

As a result, while determining the competent court in terms of territorial jurisdiction, the provisions of the law numbered 5718 must be primarily taken into account, and, if there is no provision in this Law, the provisions of the Law numbered 6100 must be applied.

Applicable Law

The main norm in Turkish law is that the parties freely choose the law to be applied to their dispute. This issue is stated in paragraph 4 of Article 2 of IPLPL as “In cases where there is a possibility of choosing the applicable law, unless otherwise designated by the parties, the substantive provisions of the chosen law shall be applied. “ .

Although the parties are free to choose the law to be applied to the contract, if such choice has not been made by the parties, the determination of the applicable law to the dispute will be made according to the IPLPL. Pursuant to Article 2 of said Law, “the judge shall apply the rules of the Turkish conflict of laws and the governing foreign law which is applicable in accordance with the said rules ex officio. The judge may seek assistance of the parties for the determination of the content of the governing foreign law. If the applicable foreign law provisions cannot be ascertained despite all efforts, Turkish law shall be applied.” 

As is clear from the provision above, the judge will determine the law to be applied according to the rules of conflict of laws. Article 14 of the IPLPL entitled “Divorce and Separation” can be given as an example to the Turkish conflict of laws rules. According to this article “The grounds and provisions for divorce and separation shall be governed by the common national law of the spouses. If the spouses have different nationalities, the law of the place of their common habitual residence, in case of absence of such residence, Turkish law shall govern.”

Notwithstanding the reference to the rules of conflict of laws to determine the applicable law to a dispute, Turkish law has to be applied in the event that (i) the foreign law is contrary to the Turkish public order, (ii) there are provisions of mandatory application in the particular dispute, (iii) the applicable foreign law provisions cannot be ascertained despite all efforts.

Appeal Process

Turkish law has a 3-tier judicial system: First Instance Court, Regional Court of Appeal and Court of Cassation. 

After the court of first instance has decided about the case, the party who is not satisfied with the court decision can appeal the judgment. According to article 341 of the Turkish Code of Civil Procedure, to be able to file for an appeal,  the value of the dispute should be at least TRY 5.390,00. The appellant must apply to the first instance court which has ruled on the case within two weeks from the date of service of the decision to the appellant, with a request of appeal specifying the grounds of appeal.

Following the acceptance of the appeal application, the other party may also file its objections with the appeal court within due time. The Regional Court of Appeal evaluates the application in terms of procedure and merits. After the parties have been heard, the evidence has been examined, the Regional Court of Appeal may decide in line with the decision of the First Instance Court and reject the appeal, or decide against the First Instance Court decision. 

 The regional court of appeal’s decisions with a value above the specified thresholds are subject to the review of the Court of Cassation within two weeks from the date of service of the final decision. Accordingly, the disputed amount must be at least TRY 72,070,00. The Court of Cassation’s review is limited to the legal determinations. The decision by the Court of Cassation is final and binding, therefore the parties cannot apply to any other appeal process and the decision shall become enforceable.

In addition, it should be stated that appellate review does not suspend the enforcement. In order to apply to legal remedies, fees and expenses must be paid separately from those paid in the first instance proceedings. Additionally, the trial process in the second and third-tier courts may take longer due to the workload.

Jurisdiction Process 

In Turkish law, a two-round petition system is applied, except for cases where simple (expedited) procedure is applied. The plaintiff files a lawsuit with a lawsuit petition and respondent usually responds with a pleading within two weeks following the date of notification of the lawsuit petition. Afterwards, the plaintiff presents the rejoinder petition within two weeks and the respondent presents the second pleading within two weeks.

In cases where simple procedure is applied, the parties of the case submit only one round of petitions to the court. However, it is possible for the parties to present more than one petition for their submissions in addition to these petitions.

After the petitions phase is completed, the adjudication process continues with the preliminary examination phase, the investigation phase, the oral judgment phase and  the court decision phase. In addition to these phases, in cases where technical information is required, the judge may decide that the file will be examined by an expert or a panel of experts, and the parties can file their objections against the expert report. 

Documents submitted to the court by the parties must be certified, apostilled and translated into Turkish. If the documents do not have these qualifications, they will either not be considered by the court or the parties are granted a time limit to fulfil these requirements.

As a rule, the judge is bound by the claims of the parties, which means that he/she cannot decide beyond or other than the claims of the parties in Turkish Law. Therefore, the parties should clearly present their claims in their petitions to the court. However, it is worth noting that, during the process, parties may once decrease or increase their claims by way of submitting a petition amending their pleading.

Security, Fees and Expenses

Under Turkish Law, the plaintiff must pay the court fees and possible expenses to file a lawsuit. The fees and expenses depend on the title of the parties, the type of case, the amount of dispute, etc. The Turkish Code of Civil Procedure regulates a dual juridical taxation system, which has proportional fees or fixed fees. For instance, when a customer files a lawsuit for determination of defective goods or services, he/she must pay a fixed fee. However, if the same customer would like to be compensated for damages, he/she must pay a proportional fee.

According to the Turkish Code of Civil Procedure,  the party who relies on a certain evidence must pay the expenses relating to the evidence. Evidence expenses refer to the amount that the parties must pay within the definite period determined by the court to cover the expenses of obtaining the evidence on which they rely. If the parties together rely on the same evidence, they must pay half of the required expenses each. 

At the end of the case, all these costs are recovered by the party who was found to be unjustified by the court. In other words, the losing party must pay all the fees and expenses which have been paid during the litigation to the winning party.

In addition to aforementioned expenses, one has to take into account other litigation expenses, such as the counter counsel’s fee, regulated under article 323 of the Turkish Code of Civil Procedure. This is the payment to be made directly to the winning party’s attorney(s) by the losing party, and can be determined as proportional to the value of the dispute, or fixed, based on the title of the parties, the type of case, the amount in dispute, etc in accordance with minimum attorneyship fee tariff which is published annually.

The last issue concerning foreign persons with respect to litigation in Turkey is the security fee. Article 84 of Turkish Code of Civil Procedure stipulates that “security in an adequate amount should be provided to prevent any possible loss on the defendant’s behalf, in cases which mainly include (i) a citizen of Turkey not residing in Turkey initiating a lawsuit, and (ii) the plaintiff having gone bankrupt before.”

Additionally, as per Article 48 of the IPLPL, “foreign individuals or legal persons who file a lawsuit in Turkey, intervene in a lawsuit before Turkish Courts, or initiate execution proceedings before a Turkish court shall be required to provide security whose amount shall be determined by the court to cover the expenses of the legal procedures and proceedings as well as losses or damages of the other party”. 

In light of the regulations above, the foreign individuals or legal persons must pay a security fee to the court, to file a lawsuit. However, as an exception, in case there is a mutual assistance agreement with respect to judicial relations between the foreigner’s country of residence and Turkey, or if the bilateral relations between the foreigner’s country of residence and Turkey allow this based on reciprocity, the security fee may not be required. The amount of the security fee is decided by the court according to the amount of the dispute.

Enforcement

A separate enforcement procedure is required for the execution of the court decision if the other party fails to voluntarily perform the judgment regarding the granting of something or the paying of a certain amount after it is rendered. In this case, the winning party must initiate enforcement proceedings with the court decision in order to execute the decision. With this procedure, a payment order shall be sent to the other party to comply with the judgment, and if the collection cannot be obtained despite this payment order, attachment procedures will be initiated.

Conclusion 

As can be seen, although the Turkish judicial system does not contain big differences for foreigners compared to Turkish citizens, there are still some specific provisions that apply to foreigners only. In addition the application of conflict of laws principles to the cross-border elements in a dispute may render the litigation process more complex. Therefore, when filing a lawsuit in Turkey, it is extremely important to get competent legal advice from an experienced law office. Ongur&Partners Law Firm, with significant experience and expertise in litigation in Turkey stands ready to provide you with the required legal assistance.