Procedural issues in international bankruptcy under Turkish law

Abstract

This article examines the procedural issues in a bankruptcy lawsuit with a foreign element from a Turkish private international law perspective. The article begins with a brief overview of the bankruptcy procedure under Turkish domestic law. It then explores the jurisdiction of Turkish courts in an international bankruptcy lawsuit in detail. The effects of a foreign choice of court agreement and parallel proceedings are also addressed in discussing the international jurisdiction of Turkish courts. The article also touches upon the debates on the possible legal grounds for the inclusion of assets located abroad to the bankruptcy estate established before Turkish courts considering the approaches of universalism and territorialism. Finally, problems related to the recognition of foreign bankruptcy decisions are examined.

Keywords:

• Bankruptcy
• Turkish private international law
• international jurisdiction
• choice of court agreements
• parallel proceedings
• territorialism
• universalism
• recognition and enforcement of foreign judgments

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 In this article, the notion of “international bankruptcy” is used interchangeably and with the same meaning as a “bankruptcy lawsuit with a foreign element”. “Foreign element” under Turkish law is interpreted broadly and indicates any element that renders any legal event or relationship related to at least one legal system other than the legal system of the country where the lawsuit is initiated. Examples of a foreign element in a civil proceeding include, but are not limited to, foreign nationality of either of the parties to the lawsuit; habitual residence or domicile of either of the parties being located in a foreign country; the place of performance (in contractual claims) or place of damage (in tortious claims) being located in a foreign country. On the definition of foreign element under Turkish law see: Ergin Nomer, Devletler Hususi Hukuku (Beta Publishing, 22nd edn, 2017), 5–7; Aysel Çelikel and B Bahadır Erdem, Milletlerarası Özel Hukuk (Beta Publishing, 17th edn, 2021), 13; Cemal Şanlı, Emre Esen and İnci Ataman-Figanmeşe, Milletlerarası Özel Hukuk (Beta Publishing, 9th edn, 2021), 5; Sibel Özel, Mustafa Erkan, Hatice Selin Pürselim and Hüseyin Akif Karaca, Milletlerarası Özel Hukuk (On İki Levha Publishing, 1st edn, 2022), 9–14. On how a foreign element shall be evidenced before Turkish courts and applied ex officio by the judges see: Can Yöney, Yabancı Hukukun Uygulanması (On İki Levha Publishing, 1st edn, 2018).

2 Official Gazette no. 19.06.1932/2128.

3 A mechanism called “postponement of bankruptcy” had also been introduced under Turkish law in 2003 and had been applied for nearly 15 years until its abolition in 2018. On the formerly applied “postponement of bankruptcy” procedure under Turkish law see: Mehmet Kamil Yıldırım and Nevhis Deren Yıldırım, İcra ve İflas Hukuku (Beta Publishing, 8th edn, 2021), 463–84.

4 The Turkish concordat regime has been reformed recently through the Law numbered 7101. For further information on the concordat regime and types of concordat under Turkish law see: Serpil Işık, “Concordat Procedure as a Way to Escape Bankruptcy and the Evaluation of the Temporary Respite Decision Following the Amendment to the Law no. 7101: Current Developments and Experiences in Turkey” (2021) 70 Ankara Üniversitesi Hukuk Fakültesi Dergisi, 147. For an evaluation on the private international law issues in the formerly applied concordat regime see: Gülin Güneysu Güngör, “Milletlerarası Özel Hukukta İflâs İçi Konkordato (Vade ve Tenzilât Konkordatosu İtibariyle)” 44 (1995) Ankara Üniversitesi Hukuk Fakültesi Dergisi 293.

5 For further information on reorganization of corporations and cooperatives through reconciliation under Turkish law see: Mustafa Göksu, “Concordat and Restructuring in Turkish Insolvency Law (A Review From ADR Perspective)” (2020) XXIV(4) Ankara Hacı Bayram Veli Üniversitesi Hukuk Fakültesi Dergisi 119.

6 This rule regulating eligibility for bankruptcy is also significant in relation to the public policy concerns over the recognition of foreign consumer bankruptcy decisions in Turkey. This issue is examined below in Section V.2.(c) of this article.

7 Göksu, supra n 5, 121.

8 Yıldırım and Deren Yıldırım, supra n 3, 437; Hakan Pekcanıtez, Oğuz Atalay and Muhammet Özekes, İcra ve İflas Hukuku Temek Bilgiler (On İki Levha Publishing, 19th edn, 2022), 247 and so forth.

9 Yıldırım and Deren Yıldırım, supra n 3, 437; Pekcanıtez, Atalay and Özekes, supra n 8, 248.

10 The said grounds for initiating direct bankruptcy proceedings are stipulated exhaustively and include amongst others conditions the debtor not having a permanent address, hiding in order to avoid payment of debts, hiding his/her assets, being involved in fraudulent practices. For the complete list of reasons stipulated under Arts 177 and 178 and an assessment thereon see: Yıldırım and Deren Yıldırım, supra n 3, 454–62; Pekcanıtez, Atalay and Özekes, supra n 8, 248–56.

11 For further information on the persons subjected to insolvency under Turkish law see Yıldırım and Deren Yıldırım, supra n 3, 424–33; Pekcanıtez, Atalay and Özekes, supra n 8, 240–1.

12 In a bankruptcy proceeding with a negotiable instrument, the time bar for filing an objection is five days.

13 With regards to the distinction between ordinary bankruptcy proceedings and bankruptcy proceedings with a negotiable instrument, there exist certain differences regarding the requirements as to the form and content of a valid objection. Further, in bankruptcy proceedings with a negotiable instrument, the debtor- along with an objection to the monetary debt- may also raise a “complaint” in relation to the existence or content of the negotiable instrument. For a comparison between the said proceedings see: Pekcanıtez, Atalay and Özekes, supra n 8, 260–1.

14 For further information on the “attachable assets” of the debtor in a bankruptcy proceeding under Turkish law see: Yıldırım and Deren Yıldırım, supra n 3, 489–98.

15 The expression “wherever they may be found” under this provision causes debates as to whether the assets situated in foreign countries shall also be included in the bankruptcy estate. The controversy arising from this provision will further be examined under Section D.2. of this article.

16 Bankruptcy offices are administrative units established at the place of commercial courts, having certain administrative duties during the bankruptcy lawsuit and after the liquidation process. On the role of bankruptcy offices during bankruptcy proceedings see: Pekcanıtez, Atalay and Özekes, supra n 8, 242–5.

17 Art 219/2 of the Code of Execution and Bankruptcy states that “the time period envisaged for registering the receivables at the bankruptcy estate may be extended for creditors residing in very distant places or in foreign countries” (Emphasis added). This provision causes debate as to whether foreign creditors and the assets of the bankrupt shall be included in the bankruptcy estate before Turkish courts. This issue shall be examined below in Section D.2. of this article.

18 Pursuant to Art 1/1 of the Turkish Code of Private International and Procedural Law (Law no. 5718): “This Act regulates the law applicable to private law transactions and relations that contain a foreign element, the international jurisdiction of the Turkish courts, and the recognition and enforcement of foreign judgments.”

19 Official Gazette no. 12.12.2007/ 26728.

20 Turkey has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which is also known as the “New York Convention”. As the instances where the New York Convention is inapplicable are rare, the rules pertaining to the grounds of recognition and enforcement of arbitral awards under the PIL Code (as the domestic rules) are rarely applicable.

21 Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 457; Çelikel and Erdem, supra n 1, 45.

22 Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 458; Çelikel and Erdem, supra n 1, 566.

23 Çelikel and Erdem, supra n 1, 567.

24 Nomer, supra n 1, 460–1. On the application of Turkish domestic jurisdiction rules in a lawsuit with a foreign element see Nomer, supra n 1, 460–71; Çelikel and Erdem, supra n 1, 569–76; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 464–88.

25 Official Gazette no. 04.02.2001/27836.

26 Nomer, supra n 1, 482–3; Şanlı, Esen and Ataman-Figanmeşe, 486; Çelikel and Erdem, supra n 1, 614–5.

27 Nomer, supra n 1, 483; Çelikel and Erdem, supra n 1, 615.

28 In a domestic setting the competent Turkish court needs to be indicated in raising a jurisdiction objection pursuant to Art 19 of CCP. On the other hand, in a dispute with a foreign element the respondent does not need to show the competent foreign court and raising a jurisdiction objection shall suffice; see: Nomer, supra n 1, 482; Çelikel and Erdem, supra n 1, 614.

29 Nomer, supra n 1, 482–3; Şanlı, Esen and Ataman-Figanmeşe, 486; Çelikel and Erdem, supra n 1, 614–5.

30 On the exclusive nature of bankruptcy disputes and the definition for the notion of the ‘exclusive jurisdiction’ under Turkish private international law see Section C.2.d. below.

31 On the consequences of there being an exclusive jurisdiction rule with regards to bankruptcy lawsuits see Section C.2.(d) below.

32 Nomer, supra n 1, 398–402.

33 On the “lex fori principle” under Turkish private international law see Nomer, supra n 1, 392–402.

34 For the full-text and further details of the treaty including the conditions for its entry into force, summary of its objectives see <https://www.coe.int/en/web/conventions/full-list?module=treaty-detail&treatynum=136> accessed 6.6.2023.

35 Ibid.

36 For signatory and ratified states see the status table of the Istanbul Convention at: <https://www.coe.int/en/web/conventions/full-list?module=signatures-by-treaty&treatynum=136> accessed 6.6.2023.

37 The first paragraph of Art 34 of Istanbul Convention states as follows: “This Convention shall enter into force on the first day of the month following the expiration of a period of three months after the date on which three member States of the Council of Europe have expressed their consent to be bound by the Convention in accordance with the provisions of Article 33”.

38 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast).

39 The provision makes reference to foreign “commercial enterprises” (ticari işletme). The term commercial enterprise is not commonly used under Turkish commercial or civil law and this choice of wording was criticised in the doctrine; see: Gülin Güneysu Güngör, Milletlerarası Özel Hukukta İflas (Ankara Üniversitesi Hukuk Fakültesi Yayınları, 1997), 134–5. In this article, the term foreign “corporation” or “company” has been used for reasons of clarity and practicality notwithstanding the fact that an international bankruptcy lawsuit may also be initiated against a real person merchant trader under Turkish law.

40 Under the Turkish legal system, bankruptcy lawsuits are opened at specialised civil courts called “commercial courts”. Under Turkish procedural law, the subject matter of the dispute in question shall determine the type of civil court which shall hear the dispute. In this regard, consumer courts, maritime courts, intellectual property courts, labour courts, family courts, land registry courts and execution courts are amongst the other specialised civil courts. For further introductory information on the Turkish civil court system see: Ali Cem Budak and Mustafa Yağcı, “Chapter 11: Law of Civil Procedure”, in Tuğrul Ansay, Don Wallace Jr and Işık Önay (eds), Introduction to Turkish Law (Wolters Kluwer, 7th edn, 2020), 255–75.

41 Güneysu Güngör, supra n 39, 127–8; Ali Yeşilırmak, Uluslararası Hukukta İflas (On İki Levha Publishing, 1st edn, 2011), 195.

42 General Assembly of Civil Chambers of the Turkish Court of Cassation, Case no. 2006/19-643, Decision no. 2006/671, Date 18.10.2006 (www.kazanci.com). This definition is also included in the following judgments: 12th Commercial Court of Istanbul, Case no. 2019/363 Decision no. 2019/821, dated 18.9.2019; 12th Commercial Court of Istanbul, Case no. 2020/274 Decision no. 2020/626, dated 25.11.2020.

43 11th Civil Chambers of the Turkish Court of Cassation, Case no. 7079, Decision no.5853, dated 17.10.1988.

44 Güneysu Güngör, supra n 39, 129.

45 İlyas Gölcüklü, Milletlerarası Özel Hukukta İflas Uyuşmazlıklarının Çözümü (On İki Levha Publishing 2020), 205–8.

46 Gölcüklü, supra n 45, 207.

47 Ibid.

48 Güneysu Güngör, supra n 39, 130; Yeşilırmak, supra n 41, 195; Ali Önal, “Yabancı Unsurlu İflâs Davalarında Türk Mahkemelerinin Yetkisi Sorunu” (2014) 16 Dokuz Eylül Üniversitesi Hukuk Fakültesi Dergisi 2907, 2890; Emre Çetin, “Yabancılık Unsuru Taşıyan İflas İşlemlerinde Uygulanacak Hukuk ve Mahkemenin Yetkisi” (LLM Thesis, Marmara University Social Sciences Institute) 167.

49 For this report see: Talih Uyar, İcra ve İflas Kanunu Şerhi (2nd edn, 2007), 12671–2.

50 Can Yöney, “Yabancılık Unsuru İçeren İflas Davalarında Türk Mahkemelerinin Yetkisi” (2019) 63 Türkiye Barolar Birliği Dergisi 59, 65.

51 The Commission in arriving at this conclusion has (by analogy) taken into account Art 17 of the (then applicable, now former) Code on Civil Procedure numbered 1086. Art 17 of the former Code on Civil Procedure regulates the jurisdiction rule for lawsuits against corporations with branches, albeit excluding bankruptcy disputes. The equivalent of the said article under the Code of Civil Procedure numbered 6100 that has been applicable since 2011 is Art 14.

52 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on Insolvency Proceedings (Recast).

53 A thorough analysis of the notion of COMI under the EU acquis and its comparison to the Turkish notion of “centre of operations” is outside the scope of this article. For further information on this issue see: Gölcüklü, supra n 45, 208–11.

54 For further discussion of the issue of lis pendens under Turkish private international law see: Gülüm Bayraktaroğlu Özçelik, “International Lis Pendens as a Contemporary Problem of Turkish International Civil Procedure”, in Petar Sarcevic, Paul Volken, Andrea Bonomi and Gian Paolo Romano (eds), Yearbook of Private International Law Volume 17 (Sellier 2015/2016), 217.

55 Muammer Raşit Seviğ, Türkiye Cumhuriyeti Kanunlar İhtilâfı Kaidelerinin Sentezi (Kenan Publishing 1941), 72; Yılmaz Altuğ, Devletler Hususi Hukukunda Yargı Yetkisi (İstanbul University Press, 2nd edn, 1979), 208; Haydar Demirarslan, “Türk Devletler Hususi Hukukunda Kazai Salâhiyet” (1952) 43 Adalet Dergisi 49.

56 Ibid.

57 Çelikel and Erdem, supra n 1, 608.

58 Nomer, supra n 1, 4578; Çelikel and Erdem, supra n 1, 668.

59 Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 545; Vahit Doğan, “Türk Hukukunda Yabancı Derdestliğin Nazara Alınması” (2002) 22 Milletlerarası Hukuk ve Milletlerarası Özel Hukuk Bülteni, 145–6.

60 Doğan, ibid, 146. It is important to note that amongst different approaches under Turkish scholarship regarding the conditions for the acceptance of international lis pendens, the procedure to be followed in raising an objection to prove lis pendens is also disputed. One view advocates the raising of a jurisdiction objection within a time bar of two weeks following the submission of the initial petition as a preliminary objection; see Çelikel and Erdem, supra n 1, 669–70. The other view advocates the raising of this objection based on the domestic jurisdiction rules envisaged under the Turkish Code of Civil procedure regarding parallel proceedings. Accordingly, the parties could raise this objection at any time during the legal proceedings and the judge also has the duty of ex officio taking this matter into account; see. Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 546.

61 On divergent approaches of different civil chambers of the Turkish Court of Cassation regarding the acceptance of international lis alibi pendens objections, see Bayraktaroğlu Özçelik, supra n 54, 227.

62 Gölcüklü, supra n 45, 206.

63 Nomer, supra n 1, 523; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 660–1; Özel, Erkan, Pürselim and Karaca, supra n 1, 627.

64 Ceyda Süral Efeçınar, “Possible Ratification of the Hague Convention by Turkey and Its Effects to the Recognition and Enforcement of Foreign Judgments”, (2020) 40 Public and Private International Law Bulletin, 775, 786; Nomer, supra n 1, 486; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 659–69.

65 The notion of exclusive jurisdiction under Turkish international procedural law is not an equivalent of the notion of the exclusive jurisdiction under Turkish domestic civil procedural rules; Nomer, supra n 1, 485; Şanlı, Esen, Ataman-Figanmeşe, supra n 1, 661. Whilst exclusive jurisdiction rules within the Turkish domestic procedural law serve to grant competence to a specific court within Turkey, exclusive jurisdiction within the meaning of Turkish international procedural law derives from the necessity to ensure the competence of Turkish courts at large with regards to certain disputes whose subject matter is closely related to Turkish public policy. Hence there may be more than just one specific court with exclusive jurisdiction within the meaning of Turkish international procedural law; Özel, Erkan, Pürselim and Karaca, supra n 1, 627–8 and Ergin Nomer, Milletlerarası Usul Hukuku (Beta Publishing, 2nd edn, 2018), 130. Nevertheless, exclusive jurisdiction under Turkish international procedural law can still be interpreted as a derivative or a narrower “reflection” of the notion of exclusive jurisdiction under Turkish domestic procedural law (for this comparison see: Can Yöney, “Yabancılık Unsuru İçeren İflas Davalarında Türk Mahkemelerinin Yetkisi”, Blog Article, <https://blog.muhfmed.org.tr/yabancilik-unsuru-iceren-iflas-davalarinda-turk-mahkemelerinin-yetkisi/#_ftnref38> accessed 10 April 2023). Hence, the subject matters of certain disputes are at the intersection of both of these notions. Indeed, regarding the jurisdiction rules in bankruptcy proceedings two concepts overlap: rules vesting jurisdiction in Turkish courts under Art 154/3 of the Code of Execution and Bankruptcy are defined as an exclusive jurisdiction rule within the meaning of both domestic and international procedural law rules.

66 Hatice Özdemir Kocasakal “Milletlerarası Yetki Anlaşmalarının İflas Davası Üzerindeki Etkilerine İlişkin Bir Yargıtay Kararının Değerlendirilmesi” (2014) 16 Dokuz Eylül Üniversitesi Hukuk Fakültesi Dergisi 2295, 2306; Deniz Ergene, “Tahkim Anlaşmasına Rağmen İflâs Takibi: Tahkim İradesine Yönelen Bir Tehdit mi?” in Ayfer Uyanık Çavuşoğlu and Zeynep Derya Tarman (eds), Genç Milletlerarası Özel Hukukçular Konferansı (On İki Levha Publishing, 1st edn, 2014), 13.

67 Özdemir Kocasakal, supra n 66, 2309 fn 40.

68 Özdemir Kocasakal, supra n 66, 2309.

69 For further information on UYAP and how it operates see: https://joinup.ec.europa.eu/collection/justice-law-and-security/document/national-judiciary-informatics-system-uyap accessed 29 February 2023.

70 Özdemir Kocasakal, supra n 66, 2308–9.

71 For further information on the conditions for concluding a valid choice of court agreement authorising foreign courts under Turkish law see Zeynep Derya Tarman and Meltem Ece Oba, “Turkey: Optional Choice of Court Agreements”, in Mary Keyes (ed), Optional Choice of Court Agreements in Private International Law (Springer, 1st edn, 2020).

72 Ergin Nomer, “İflas Davalarında Milletlerarası Yetki Anlaşmaları” (2011) 85 İstanbul Barosu Dergisi 5, 9; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 482; Çelikel and Erdem, supra n 1, 614; Özdemir Kocasakal, supra n 66, 2304; Emre Esen, “Türk hukukunda Yabancı Mahkeme Kararlarının Tanınması ve Tenfizinde Münhasır Yetki Kavramı” (2002) 22 MHB, 199; Güneysu Güngör, supra n 39, 10, 182; Fügen Sargın, Milletlerarası Usul Hukukunda Yetki Anlaşmaları (Yetkin Publishing, 1st edn, 1996), 165; Nuray Ekşi, Türk Mahkemelerinin Milletlerarası Yetkisi (Beta Publishing, 2nd edn, 2000), 283.

73 Özdemir Kocasakal, supra n 66, 2315 and 2316; Cemre Tüysüz, İcra ve İflâs Hukukundakı̇ Davaların Tahkım Anlȧ şmasının İcrasına Etkıṡ ı (Istanbul University Institute of Social Sciences, PhD Thesis in Private Law 2016), 286; Ergene, supra n 66, 35 and 36.

74 Özdemir Kocasakal, supra n 66, 2314–5.

75 Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 482; Özdemir Kocasakal, supra n 66, 2315; Tüysüz, supra n 73, 295; Ergene, supra n 66, 35–6.

76 Berk Demirkol, Milletlerarası Yetki Anlaşmaları (Vedat Publishing 2018), 145–6; Tüysüz, supra n 73, 288–9; Ebru Şensöz Malkoç, “Milletlerarası Yetki Anlaşması, Tahkim Anlaşması ve Hukuk Seçimi Anlaşmasının İflas Davaları Bakımından Etkileri” (2019) 14 (179–180) Bahçeşehir Üniversitesi Hukuk Fakültesi Dergisi 1383, 1406.

77 Demirkol, supra n 73, 145–6; Özdemir Kocasakal, supra n 66, 2314 and 2315; Ergene, supra n 66, 37; Tüysüz, supra n 73, 295–6; Çetin, supra n 48, 165.

78 As shall be explained below, foreign court judgments capable of being enforced and whose execution is sought in Turkey shall be subjected to an “enforcement” lawsuit before Turkish courts; while those foreign judgments that only have a res judicata effect or of which only the res judicata effect is sought in Turkey shall be subjected to a “recognition” lawsuit. Even though a foreign court judgment on a defaulted monetary debt arising from a contract includes an obligation to pay and therefore is capable of being enforced in Turkey, such foreign court decision shall be subjected to recognition rather than enforcement during the bankruptcy proceedings. This is because the recognition of such judgment by the competent Turkish court shall result in a decision on the declaration of bankruptcy and not a decision on the payment of the defaulted monetary debt. In other words, a res judicata effect through a recognition decision of such foreign judgment shall suffice to declare bankruptcy. See in support of this view: Tüysüz, supra n 73, 300 fn. 172; Şensöz Malkoç, supra n 76, 1403. However, an opposing view has also been put forward, according to which, since the foreign court judgment on the dispute arising from a monetary debt between the parties shall include an obligation to pay a sum and hence capable of being enforced, such foreign judgment shall be subjected to an “enforcement” decision instead of recognition; see: Demirkol, supra n 76, 146 and 144 fn. 469; Ergene, supra n 66, 22, 56; Yeşilırmak, supra n 41, 206. It is important to note that under a previous decision, the Turkish Court of Cassation has ruled that an English court judgment regarding a compensation claim could only be registered at the bankruptcy estate if such claim is recognised by Turkish courts (General Assembly of Civil Chambers of Court of Cassation Case no. 2009/19-161 Decision no. 2017/207, dated 27 May 2009).

79 Şensöz Malkoç, supra n 76, 1406.

80 Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 482–3.

81 Ergin Nomer, “İflas Davalarında Milletlerarası Yetki Anlaşmaları” (2011) 85(6) İstanbul Barosu Dergisi 3, 11; Nuray Ekşi, Hukuk Muhakemeleri Kanunu”nda Tahkim (Beta Publishing, 2013), 130.

82 Nomer, “İflas Davalarında Milletlerarası Yetki Anlaşmaları”, supra n 81, 11; Ekşi, supra n 81, 130.

83 It was reported by Turkish legal practitioners in 2021 that finalisation of a decision by a Turkish court on the recognition and/or enforcement of a foreign court judgment may last more than two years of time, including the appeal process; see Efe Kınıkoğlu, Yelda Yalçın and Çağla Yargıç, “Complications Surrounding the Practice of Enforcement of Foreign Decisions in Turkey” International Bar Association (https://www.ibanet.org/complications-enforcement-foreign-decisions-turkey): “Given the caseload of the higher courts and the period to pass for the finalisation of decisions, enforcement lawsuits always take longer than expected. In practice, it takes about 12–18 months for a first instance court to render its decision. Under Turkish law, the courts hand down a short decision at the hearing, which is referred to as a ruling. Afterwards, generally in two to three months, a fully reasoned decision is rendered, which is referred to as a justified decision. The justified decision of the court of first instance can be appealed within two weeks of the notification of the justified decision to the parties. Finally, the approximate duration for Court of Appeals to render a decision takes also 8–12 months.” It has also been stated under Turkish scholarship that enforcement lawsuits may become a lengthy process when the number of files before Turkish courts and appeal process are considered, see: Zeynep Derya Tarman “Yabancı Mahkeme ve Hakem Kararlarının Türkiye de Tenfizinde Karşılaşılan Sorunlara İlişkin Bazı Tespitler” (2017) 37(2) MHB 798, 818.

84 Nomer, “İflas Davalarında Milletlerarası Yetki Anlaşmaları”, supra n 81, 130.

85 23rd Civil Chamber of the Turkish Court of Cassation Case no. 2012/4732, Decision no. 2013/255, dated 21.01.2013 (emsal.yargitay.gov.tr).

86 23rd Civil Chamber of the Turkish Court of Cassation Case no 2015/7322 Decision no. 2016/4833, dated 01.11.2016.

87 Turkish Court of Cassation has decided in this line of reasoning under certain other judgments as well, see: 23rd Civil Chamber of the Turkish Court of Cassation Case no. 2015/7322, Decision no. 2016/4833, dated 01.11.2016; 23^rd Civil Chamber of the Turkish Court of Cassation Case no. 2016/4814, Decision no. 2018/3644, dated. 12.06.2018.

88 One view under Turkish scholarship argues that if the plaintiff proves that the chosen foreign court would reject the case even if it was brought before it, this shall also be sufficient to render the Turkish court competent despite the existence of a valid jurisdiction agreement: see Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 535.

89 On the analysis of this question under Turkish law see: Tüysüz, supra n 76, 261–352, Şensöz Malkoç, supra n 76, 1383, Demirkol, supra n 76, 145 and so forth.

90 Grand Assembly of Civil Judgments of the Court of Cassation Case no. 2019/574 Decision. 2021/1710 Dated 21.12.2021.

91 Alexander M. Kipnis, “Beyond UNCITRAL: Alternatives to Universality in Transitional Insolvency” Denver (2007) 36 Journal of International Law and Policy 155, 155.

92 Andrew T. Guzman, “International Bankruptcy: In Defense of Universalism” (2000) 98 Michigan Law Review, 2177, 2179.

93 Gerard McCormack “Universalism in Insolvency Proceedings and the Common Law” (2012) 32(2) Oxford Journal of Legal Studies, 325, 325.

94 Guzman, supra n 92, 2179.

95 Ibid., 2180.

96 Guzman, supra n 92, 2179; Jay Lawrence Westbrook, “Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of Forum” (1991) 65 American Bankruptcy Law Journal 513; Jay Lawrence Westbrook, “Choice of Avoidance Law in Global Insolvencies” (1991) 17 Brooklyn Journal of International Law 513.

97 On modified universalism see: Irit Mevorach, “Modified Universalism as Customary International Law” (2018) 96 Texas Law Review 1403–36; Irit Mevorach, The Future of Cross-Border Insolvency: Overcoming Biases and Closing Gaps (Oxford University Press, 2018).

98 Eric Sokol, “The Fate of Universalism in Global Insolvency: Neoconservatism and New Horizons” (2021) 44 Hastings International and Comparative Law Review 45.

99 Regarding the drafting of the Model Law see: André J Berends, “UNCITRAL Model Law on Cross-Border Insolvency: A Comprehensive Overview” (1998) 6 Tulane Journal of International and Comparative Law 309; Jenny Clift, “The UNCITRAL Model Law on Cross-Border Insolvency: A Legislative Framework to Facilitate Coordination and Cooperation” (2004) 12 Tulane Journal of International & Comparative Law 307.

100 Gerard McCormack, EU Insolvency Law (Elgar Publishing 2022), 215.

101 Ibid.

102 Emre Esen, “Türk hukukunda Yabancı Mahkeme Kararlarının Tanınması ve Tenfizinde Münhasır Yetki Kavramı”, (2002) 22 MHB 199–200.

103 Güneysu Güngör, supra n 39, 156; Erdoğan Göğer, Devletler Hususi Hukuku (Ankara University Law Faculty Press, 4th edn, 1977), 320–1 Necmettin Berkin, İflâs Hukuku Dersleri (Istanbul University Press, 4th edn, 1972), 75; Burhan Gürdoğan, İflas Hukuku Dersleri (Ajans Türk Publishing, 1966), 79.

104 Ibid.

105 Ibid.

106 Saim Üstündağ, İflas Hukuku (Filiz Publishing, 8th edn, 2009), 12–4, 21.

107 Güneysu Güngör, supra n 39, 156–7; Gürdoğan, supra n 103, 79.

108 Göğer, supra n 103, 365–6.

109 Ibid.

110 Yeşilırmak, supra n 41, 193; Göğer, supra n 103, 365; Üstündağ, supra n 106, 15 and 16.

111 Güneysu Güngör, supra n 39, 134. The title of the said Law no. 49 is entitled as “Ecnebi Anonim ve Sermayesi Eshama Münkasim Şirketler ile Ecnebi Sigorta Şirketleri Hakkında Muvakkat Kanun” (Provisional Law on Foreign Joint Stock Companies, Foreign Corporations whose Capital is Divided into Shares and Foreign Insurance Companies).

112 Ahsen Türkmen, “Offshore Şirketlerin Türk Milletlerarası Usul Hukuku Bakımından Değerlendirilmesi” (2021) 1 Türk-Alman Üniversitesi Hukuk Fakültesi Dergisi 159, 200.

113 Güneysu Güngör, supra n 39, 134 and 138–41.

114 Güneysu Güngör, supra n 39, 134 and 138–41; Çetin, supra n 48,179.

115 Güneysu Güngör, supra n 39, 140.

116 Ibid.

117 Şanlı, Esen, Ataman-Figanmeşe, supra n 1, 620–8; Özel, Erkan, Pürselim and Karaca, supra n 1, 713–7.

118 “Lawsuits which establish a new legal situation by eliminating a legal relationship established between individuals, are called constitutive lawsuits, and court verdicts made upon the acceptance of these lawsuits are called constitutive judgments.” For further discussion of “constitutive judgments,” see Elif Irmak Büyük, Medeni Usul Hukukunda İnşai Hüküm, (PhD Thesis, Marmara University Social Sciences Institute, 2020), available at: https://tez.yok.gov.tr/UlusalTezMerkezi/tezDetay.jsp?id=yyu469CEQKZtJd9AEFMy7g&no=quega2ddRQhEN-thXXOdUQ accessed 28 February 2023.

119 Gölcüklü, supra n 45, 138.

120 Art 1/2 of the PIL Code states that provisions of international conventions to which the Republic of Turkey is a Party are reserved. Hence, provisions of international conventions duly entered into force shall prevail over the rules under the PIL Code as well as other domestic legislation.

121 İlhan Postacıoğlu, İflâs Hukuku İlkeleri Cilt I (Istanbul University Press 1978), 21.

122 Regarding the views under the doctrine see: Mustafa S. Özbek, “İflas Davasının Hukuki Mahiyeti” (2012) 61 Ankara Üniversitesi Hukuk Fakültesi Dergisi 207, 217.

123 Ibid.

124 Özbek, supra n 122, 256.

125 Under Turkish civil procedure, finalisation of a judgment is twofold: formal and material finalisation. While the former indicates the exhaustion of all of the legal remedies against that judgment (if there are no available legal remedies the judgment shall be deemed as final when it is made); the latter indicates the binding effect based on the merits of the case which prevents the same parties from filing a new lawsuit on the same subject based on the same cause of action. Finalisation in the formal sense is a prerequisite for finalisation in the material sense. For further information on the formal and material finalisation under Turkish law see: H. Yavuz Alangoya, M. Kamil Yıldırım and Nevhis Deren Yıldırım, Medenî Usul Hukuku Esasları (Beta Publishing, 7th edn, 2009), 553 ff.

126 For the fulfilment of the condition of finalisation under Art 50 to be deemed as met the views under Turkish doctrine diverge as to whether formal finalisation will suffice or both formal and material finalisation must be sought. For the approach that requires the existence of both formal and material finalisation see: Nomer, supra n 1, 204; Şanlı, Esen, Ataman-Figanmeşe, supra n 1 643–4; Çelikel and Erdem, supra n 1, 711. For the opposing approach that views formal finalisation pursuant to the laws of the foreign court where the judgment has been rendered as sufficient for the requirement under Art 50 of the PIL Code to be deemed as fulfilled see: Işıl Özkan and Uğur Tütüncübaşı, Uluslararası Usul Hukuku, (Adalet Publishing, 1st edn, 2017), 184; Ata Sakmar, Yabancı İlamların Türkiye’deki Sonuçları (Istanbul University Faculty of Law Publishing 1982), 57–8; Cemile Demir Gökyayla, Yabancı Mahkeme Kararlarının Tanınması ve Tenfizinde Kamu Düzeni (Seçkin Publishing, 2011), 41; Banu Şit “Yabancı Mahkeme Kararlarının Tanınması ve Tenfizinde Kesinleşme Şartı” (2001) 15 Gazi Üniversitesi Hukuk Fakültesi Dergisi 61, 63.

127 Nomer, supra n 1, 512; Üstündağ, supra n 106, 22; Önal, supra n 48, 2897–8.

128 Nomer, supra n 1, 512.

129 Ibid, 601–2.

130 Esen, supra n 72, 199.

131 Önal, supra n 48, 2900.

132 Nomer, supra n 1, 601–2. See also: Gölcüklü, supra n 45, 138.

133 Nomer, supra n 1, 164–5; Özel, Erkan, Pürselim and Karaca, supra n 1, 735–6.

134 Court of Cassation General Assembly on the Unification of Judgments, Case no. 2010/1, Decision no. 2012/1, dated 10.02.2012 (www.kazanci.com).

135 Ibid. Also see: Nomer, supra n 1, 165; Özel, Erkan, Pürselim and Karaca, supra n 1, 736.

136 Nomer, supra n 1, 517; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 597; Çelikel and Erdem, supra n 1, 761–2.

137 Nomer, supra n 1, 516–7; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 596–7; Özel, Erkan, Pürselim and Karaca, supra n 1, 736.

138 Nomer, supra n 1, 516; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 563.

139 Nomer, supra n 1, 516; Şanlı, Esen and Ataman-Figanmeşe, supra n 1, 563–4; Çelikel and Erdem, supra n 1, 758; Özel, Erkan, Pürselim and Karaca, supra n 1, 737.

140 Güneysu Güngör, supra n 39, 100–1.

141 For further information on the persons subjected to insolvency under Turkish law see Yıldırım and Deren Yıldırım, supra n 3, 424–33; Pekcanıtez, Atalay and Özekes, supra n 8, 240–241.

142 23rd Civil Chamber of the Court of Cassation, Case no. 2013/8371, Decision no. 2014/1048; date 14.02.2014. For the decision see (in Turkish): https://karararama.yargitay.gov.tr. Regarding this decision also see, Gölcüklü, supra n 45, 137.

143 Güneysu Güngör, supra n 39, 184.

144 Proximity to the forum state -in this case to Turkey- is also an indicator that is set out in the scholarship in assessing if the public policy exception should be applied or not, both with regards to the applicable law and the recognition and enforcement; in that the closer the links of the case with Turkish society and the Turkish legal system, the more likely the public policy exception is to interfere in the application of a foreign law or recognition of a foreign judgment by the Turkish courts. On this interpretation of public policy see: Nomer, supra n 1, 178; Çelikel and Erdem, supra n 1, 254; Özel, Erkan, Pürselim and Karaca, supra n 1, 121.

145 19th Civil Chamber of the Court of Cassation, Case no. 2000/6226, Decision no. 2001/1617, Date 01.03.2001.

146 Gölcüklü, supra n 45, 133.

147 Court of Cassation Execution and Bankruptcy Offices Case no. 3593, Decision no. 6709, dated 19.06.1969. (www.kazanci.com).

148 Yeşilırmak, supra n 41, 206–7.

149 Yeşilırmak, supra n 41, 207.

150 11th Civil Chamber of the Court of Cassation, Case no. 2001/7981 Decision no. 2002/466 dated 25.01.2002.

151 See: Béligh Elbalti “Reciprocity and the Recognition and Enforcement of Foreign Judgments: a Lot of Bark but Not Much Bite” (2017) 13 Journal of Private International Law 184, 184–218.

152 Exorbitant jurisdiction is said to exist when the court lacks the adequate connection with the parties, the circumstances of the case or the cause of action; see: Olivia Struyven, “Exorbitant Jurisdiction in The Brussels Convention” (1998-1999) 35 Jura Falconis KU Leuven, 521, 522. Available at: <https://www.law.kuleuven.be/apps/jura/public/art/35n4/struyven.pdf> accessed on 28 February 2023.

153 Güneysu Güngör, supra n 39, 139; Çetin, supra n 48, 179.

154 See Section above Section D.2.

155 Critics of this approach argue that a branch itself cannot be subjected to bankruptcy on its own as it does not have a separate legal personality under Turkish company law, see Section above Section D.2.