Injunctive Relief under Turkish Law
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1 113 Injunctive Relief under Turkish Law by RFAN URAZ CANBOLAT & YEfi M KUMOVA* ABSTRACT The Turkish Courts are empowered to order injunctive relief, provisional attachments and the recording of evidence as interim legal protection measures for the protection of different rights of the applicant party. Furthermore, the Turkish Courts also use the payment prohibition under the Turkish Commercial Code as a provisional measure against fraud in the annulment of negotiable papers. These measures are essential in the securing of certain rights during the long judicial process in Turkey. This article will first address the general approach of the Turkish Courts on provisional measures. Then, the different types of provisional legal protection regulated in the TCC methods such as injunctive relief, provisional attachment, recording of evidence and the payment prohibition will be reviewed in turn. I. PROVISIONAL LEGAL PROTECTION METHODS Securing justice is one of the essential duties of a state. In this regard, according to Articles 36 and 40 of the Turkish Constitution, 1 everyone is entitled to claim a right before competent authorities without any delay. 2 While claiming a right before competent authorities, one of the challenges is to protect the claimed right until the end of the relevant proceedings. Since reviewing the files and giving a ruling require detailed research and time, the claimed right may be at risk until the finalization of the proceedings. The Turkish Courts use various methods to prevent the potential loss of the claimed right before or during the proceedings. In general, these are called provisional or interim measures. Their common feature is that they are all decided by judicial authorities and they are temporary but binding. In this article, we focus mainly on the interim measures ordered by the Turkish civil courts. In the Turkish legal doctrine, provisional legal protection is defined as the legal * rfan Uraz Canbolat is a Partner in the Litigation Department of Cerraho lu Law Firm, and has been working at the firm since 2005, where he is mainly focused on litigation and domestic arbitration involving various types of commercial disputes. He speaks Turkish and English and has a law degree, as well as an LL.M. degree in Private Law from Istanbul University. Yeflim Kumova is an Associate in the Litigation Department of Cerraho lu Law Firm, and has been working at the firm since September 2014, where she is mainly focused on corporate and commercial law. She speaks English, French and Turkish and has a law degree from Koç University and pending LL.M. degree in Business Law from Galatasaray University. 1 Article 36 of the Turkish Constitution dated 1982 states: Everyone has the right of litigation either as plaintiff or defendant and the right to a fair trial before the courts through lawful means and procedures. Article 40 of the Turkish Constitution states: Everyone whose constitutional rights and freedoms have been violated has the right to request prompt application to the competent authorities. 2 N.D. Yıldırım, Haksız Rekabet Hukuku ile Fikri ve Sınai Mülkiyet Hukuku nda İhtiyati Tedbirler, (Istanbul, 2002), TURKISH COMMERCIAL LAW REVIEW, Vol. 1, No. 2, June 2015
2 114 The Turkish Commercial Law Review Volume 1 Issue 2 June 2015 protection decided by the courts or arbitrators before or during the proceedings in order to protect the plaintiff or the defendant and/or the subject matter of the dispute against willful misconduct until closing of the proceedings with final judgment. 3 Regarding the claims raised before civil courts, provisional legal protection methods are mainly regulated under the Turkish Civil Procedural Law (TCPL). 4 However there are also special provisions in other laws such as the Bankruptcy and Enforcement Law (BEL) and the Turkish Commercial Code (TCC) that are relevant for present purposes. Provisional legal protection methods that are used by civil courts are mainly divided into three groups: injunctive relief, provisional attachments and the recording of evidence. Another example is the payment prohibition regulated in the TCC as a special method of provisional legal protection used especially in cases where there may have been an element of fraud. II. INJUNCTIVE RELIEF Injunctive relief is a key interim measure ordered by the Turkish civil courts, mainly used to preserve the status quo ante. For example, the Court may decide that movable goods that are the subject matter of the dispute should be delivered to a trustee in order to prevent the transfer of those goods by one party during the proceedings without the permission of the other party. Since the trustee cannot give the movable goods to any of the parties without the decision of the Court, none of the parties can dispose of those goods or transfer them to third parties. Injunctive relief is temporary and provides extensive or limited legal protection against probable damage to the plaintiff or the defendant. Such relief may be requested prior to or during the proceedings 5. In some respects, injunctive relief complements elements of the main proceedings because it enables the requesting party to obtain a legal benefit at the end of proceedings and prevents irreparable damage that may occur during the proceedings. As a rule, the Court may decide to grant injunctive relief in most sets of proceeding. However, there are cases where the Courts are restricted from doing so by law. Article 40/1 of the Mining Law 6 and Article 20/1 of the Expropriation Law 7 are examples of this. a) Conditions for the Grant of Injunctive Relief According to Article 390 of the TCPL, injunctive relief may be requested in writing 3 H. Pekcanıtez, Milletlerarası Tahkimde Geçici Hukuki Koruma Önlemler, (Ankara, 2003), Between Articles 389 and 406 of the Turkish Civil Procedural Law numbered 6100 and published in the Official Gazette dated 4 February 2011 and numbered Serhat Kırtıloglu, Prof. Dr. Fırat Öztan a Armağan: İhtiyati Tedbirde Görevli ve Yetkili Mahkeme (Ankara, 2010), Article 10(1): Wells, pits, adits, machines, buildings, any kinds of transportation vehicles that are used beneath or above the ground, tools that are used to increase the value of the ore (including the tools used to extract and clean the ore) and working material that is needed for 1 year cannot be attached and subject to injunctive relief. 7 Article 20(1): The administration, for which expropriation has been made as per this Law and as a result of this, registration of the immovable property was made, asks the execution officer to evict the immovable property. The execution officer notifies the user of the immovable property to evict the property within 15 days. If users fail to evict the property, execution office evicts them. Objection and complaint does not suspend eviction and courts cannot rule for injunctive relief on this.
3 Injunctive Relief under Turkish Law 115 before or during the main lawsuit. The conditions of injunctive relief are regulated under Article 389/1 of the TCPL. According to the same, if there is concern that to use the right would be seriously difficult or even impossible as a result of a change in the existing situation or that the delay in using the right would cause serious damages, then the Court may rule for injunctive relief for the subject matter of the dispute. As can be seen, according to law, the injunctive relief decision should be given in relation to the subject matter of the dispute. However, in one of its recent decisions, the 6 th Chamber of the Court of Appeals did not take these criteria into consideration and decided that vehicles and immovable properties of the defendant can be subject to injunctive relief even if they are not the subject matter of the dispute. 8 In order to order injunctive relief, realization of the risk or damage is not a requirement. Injunctive relief may also be granted in order to prevent probable risk or damage which may occur later. The requesting party has to indicate explicitly the reason for the request for injunctive relief, as well as the type of injunctive relief requested. In addition to that, the requesting party should prove (not definitely but as close to definitely as possible) its rightfulness regarding the merits of the dispute. In other words, the Court should be persuaded that there is a claim and the possibility that the claim is unjustified is slight. This is why injunctive relief decisions are temporary. Injunctive relief is a matter of the Court s discretion. It should be noted that to receive injunctive relief decisions from Turkish Courts is not an easy task in practice. While rendering its decision for injunctive relief, the Court has to indicate the reasons for its decision. The elements which have to be written in the Court s injunctive relief decisions are set out under paragraph 2 of Article 391/2 of the TCPL. Also according to Article 141/3 of the Turkish Constitution, all decisions of the Turkish courts should be reasoned. There are instances of the Court of Appeals overruling injunctive relief decisions of lower courts on the grounds that the said decisions did not include sufficient reasoning or justification. 9 It should be noted that due to a binding decision of the Court of Appeals, injunctive relief decisions alone are not appealable; they can only be appealed together with the local court s decision on the merits of the dispute. 10 Therefore, parties do not have the chance to ask a higher court to review a local court s decision on injunctive relief requests until the local court gives a decision on the merits of the case. b) Providing Security As a condition to ordering injunctive relief, the Court decides to order security from the requesting party. This security is provided in order to cover the potential loss of the counterparty or of third parties that may occur because of an unjustified request for 8 Decision of the 6 th Civil Chamber of Court of Appeals dated 23 January 2013 and numbered 18775/ Decision of the 23 rd Civil Chamber of Court of Appeals dated 14 February 2013 and numbered 681/811. With the same explanation: decision of 15th Civil Chamber of Court of Appeals dated 2 April 2013 and numbered 1845/ Decision of the Civil General Assembly on the Unification of Judgments dated 21 February 2014 and numbered 1/1.
4 116 The Turkish Commercial Law Review Volume 1 Issue 2 June 2015 injunctive relief. If there is strong evidence showing that the requested injunctive relief is fair, the requesting party may be exempted from providing security. In other words, if the request is based on an official document (i.e. a court decision or documents prepared by the notary public) or other strong evidence of wrongdoing, the Court may exempt the requesting party from providing security. In one of its recent decisions, 11 the 21 st Chamber of the Court of Appeals overruled a lower court s decision to grant injunctive relief without security on the grounds that the lower court s decision did not include sufficient justification for rendering the injunctive relief without security. In the now repealed TCPL numbered 1086, 12 if the State applied for injunctive relief, it was not required to provide security. However, with the new TCPL, the State is no longer exempt from providing security. According to Article 392 of the TCPL, a person struggling with financial difficulties and having the right to benefit from judicial assistance does not have to provide security for receiving an injunctive relief decision. After a final substantive decision is rendered in the proceedings rejecting the claim, or after a decision of the Court discontinuing the injunctive relief, the Court retains the sums secured for a period of one month to see if the counterparty initiates a lawsuit against the requesting party for the indemnification of its damages incurred as a result of the injunctive relief decision. According to paragraph 2 of Article 392 of the TCPL, if the counterparty does not file such a claim within one month, the Court returns the security to the requesting party. c) Competent Court and the Procedure Injunctive relief can be requested in writing from the competent court before or after the filing of the substantive proceedings. According to Article 397 of the TCPL, if injunctive relief is applied for before proceedings are issued, the substantive proceedings need to be filed within two weeks following the decision on the injunctive relief. In principle, the Court could list the hearing of an application for injunctive relief for a hearing, attended by the applicant and the respondent. However, according to Article 390 of the TCPL, in urgent cases or cases where notice would prejudice the whole basis of the application, the Court may make a decision in the absence of the counterparty and without holding a hearing. In such circumstances, the respondent to the application or the without notice decision may object. However, the objection itself does not suspend the effect of the injunction itself: see Article 394 of the TCPL. The Court will consider the objection and may vary the terms of the relief or revoke it in its entirety. In practice, the Turkish Courts generally decide on injunctive relief requests without holding a hearing. If the Court does not hold a hearing, it is plainly important for the Court to maintain a balance between the legal interests of the parties: in such circumstances, specific facts and allegations of the case ought to be strictly scrutinized by the Court Decision of the 21 st Civil Chamber of Court of Appeals dated 6 March 2013 and numbered 3045/ Civil Procedural Law numbered 1086 was approved on 18 June 1927 and abolished by CPL numbered 6100, which was published on 4 February E. Yılmaz, Hukuk Muhakemeleri Kanunu Şerhi (Ankara, 2013), 1666.
5 Injunctive Relief under Turkish Law 117 A decision by the Court on interim relief should not be a decision on the merits of the case. The Court of Appeals has emphasized the importance of this principle in a number of its decisions. According to a decision of the 13th Civil Chamber of the Court of Appeals, the request on the part of the applicant for a payment according to the exchange rate applicable as at the signing date of the agreement is in fact a request relating to the substantive merits of the case and the Court cannot make such a determination on an interim basis. 14 As per Article 393 of the TCPL, once injunctive relief is granted by the Court, the requesting party should apply to the execution office for the execution of the decision. If the requesting party does not execute the injunctive relief order within one week of the order being granted, the order will be revoked ipso facto. According to Article 395 of the TCPL, if the defendant puts up sufficient security, the Court may change the terms of, or revoke, the injunction. 15 Unless the Court rules otherwise, the injunction remains in place until the court s final judgment in the proceedings. If, in the event, it transpires that the injunction was unjustified, the counterparty may apply for compensation pursuant to Article 399 of TCPL. III. PROVISIONAL ATTACHMENT Under Turkish law, while the subject matter of injunctive relief request is related to the subject of matter of the substantive dispute, the subject matter of a provisional attachment request is a monetary receivable which may be unrelated to the subject matter of the dispute. 16 A provisional attachment is applied to all relevant assets, rights or receivables of the debtor or defendant in order to secure the creditor s receivable. The procedure for objecting to an application for a provisional attachment is different from that used in the injunctive relief context. In addition to this, their execution is also different to one another. For example, where an injunctive relief has been applied in respect of a vehicle, the vehicle owner cannot sell it to anyone. However, if a provisional attachment has been applied in respect of that vehicle, the vehicle owner would be entitled to sell the vehicle, and the new owner would not be able to raise any objections if the execution office sells the vehicle after the provisional attachment turns into a definite attachment. In one of its decisions, 17 the Court of Appeals defines the provisional attachment as a temporary measure in order to guarantee the monetary receivable of the creditor and indicates the differences between provisional attachment and injunctive relief. In the same decision, the Court of Appeals rules that it should be possible for the plaintiff to ask for provisional attachment for his receivables arising out of the defendant s tortious act. IV. RECORDING OF EVIDENCE Another provisional legal protection method that needs to be shortly explained is recording of evidence. Recording of evidence is a totally different procedure from 14 Decision of the 13 th Civil Chamber of Court of Appeals dated 21 March 2012 and numbered 2615/ Decision of the 17 th Civil Chamber of Court of Appeals dated 18 June 2013 and numbered 6689/ Decision of the 2 nd Civil Chamber of Court of Appeals dated 6 November 2013 and numbered 21952/ Decision of the 21st Civil Chamber of Court of Appeals dated 26 September 2012 and numbered 13821/15625.
6 118 The Turkish Commercial Law Review Volume 1 Issue 2 June 2015 injunctive relief or provisional attachments. It is a method used for the determination of evidence. It should not be confused with lawsuits filed for the determination of rights or legal transactions. Recording of evidence is used to determine the evidence to be used during court proceedings. It is not accepted as a separate lawsuit. According to Article 400 of TCPL, the party requesting recording of evidence should prove his or her legal interest for this application. Under the same article, if there is a risk that the evidence will be lost or that such evidence will become seriously difficult to rely on, then it should be deemed that there is legal interest for recording of evidence. 18 Recording of evidence can be requested prior to or during the main lawsuit as per Article 401 of the TCPL. It can only be requested from the competent Court as per the law. 19 V. INJUNCTIVE RELIEF ON THE ANNULMENT OF NEGOTIABLE PAPERS Negotiable papers are mainly regulated under the TCC. According to Article 645 of the TCC, the rights under these negotiable papers cannot be claimed or transferred to third parties without using these papers. Negotiable papers include promissory notes, bill of exchange and checks. During the annulment action of negotiable papers, the Court may decide on a payment prohibition until the rendering of the annulment decision. If the bearer loses the negotiable paper and the new owner of such negotiable paper cannot be determined, the bearer may file an annulment action before the Court. However, during these proceedings, third persons who find the negotiable paper and are not legally the creditor may behave maliciously and try to collect the receivable. In order to prevent the debtor from making payment to those third persons, the bearer of such negotiable paper may request for payment prohibition from the competent Court which is the Commercial Court of First Instance. 20 As in other injunctive relief, for the payment prohibition, there should be a decision of the competent court. As a rule, the debtor is obliged to make payment to the person proving that he is the bearer of that negotiable paper. However, in order to protect the debtor and the creditor, the Court may decide on injunctive relief. Payment prohibition is aiming to protect the debtor against fraud cases. Normally with counterfeit signature or counterfeit endorsement, third persons may act as legal bearer of commercial paper, in other words as a creditor. However, if the real creditor requests payment prohibition during the annulment proceedings, and the Court decides accordingly, the debtor cannot make any payment to the third parties until the end of the annulment action. Also for this type of injunctive relief, a security should be provided by the party requesting the annulment of the negotiable paper. This security is determined in order to protect third persons against unjustified requests. Ratio of that security is not regulated in the law. 21 However, in practice, the Court rules for 10-15% of the amount indicated on the negotiable paper. 18 H. Pekcanıtez, Medeni Usul Hukuku (Ankara, 2011), Decision of the 2nd Civil Chamber of Court of Appeals dated 15 April 2014 and numbered 853/ Decision of the 11th Civil Chamber of Court of Appeals dated 2 December 2011 and numbered 13181/ Ö. Gültekin, Kıymetli Evrakın Ziyaı ve İptali (Ankara, 2013), 124.
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