Turkey has updated rules related to pledges on movable assets. Notably, all future legal interests in a movable asset will now be directly covered by a pledge, together with the movable asset. If a production process is pledged together with a movable asset used in the process, the pledge will now be deemed to have been automatically established.
The Law Amending Certain Laws for Enhancing the Investment Environment number 7099 (“Omnibus Law”) was published in Official Gazette number 30356 on 10 March 2018.
A range of legislative changes have been made in Turkey following the attempted coup on 15 July 2016, as well as changes to the structures and compositions of government, military and judicial bodies. Notable aspects for companies include bankruptcy suspension requests being deemed invalid during the national three month State of Emergency, as well as increased powers for guardians appointed to companies under investigation.
Bankruptcy postponement requests suspended
Turkey has tightened up its postponement of bankruptcy regime. Bad faith debtors would regularly exploit the prior legislative arrangements and court processes, using them to threaten or bargain with their creditors by depriving them of enforcement and execution avenues for a significant and uncertain amount of time. However, legislative amendments go a significant way towards evening up the balance between creditors and debtors in this area.
Turkey has introduced regulations regarding new and existing bankruptcy suspension requests and company guardians in the wake of the 90 day of State of Emergency declared on 21 July 2016. Drastic changes have recently been introduced for the Turkish bankruptcy postponement regime (more).
Introduction
Postponement of bankruptcy
Comment
Introduction
On July 15 2016 Parliament enacted an omnibus bill which amended several laws. The Law on the Amendment of Some Laws to Improve the Investment Environment focuses on:
The Turkish collateralization system was recently updated through the introduction of the Law No. 6750 on Movable Pledges (the “Movable PledgeLaw”).
Introduction
Turkey has, for the first time, introduced mediation as an alternative dispute resolution system in 2012. The Law on Mediation for Civil Disputes (“Law”) which was published in the Turkish Official Gazette on 22.06.2012 and came into force on 22.06.2013 mainly regulates the principles and procedures applicable in resolving civil disputes by mediation.
Introduction
Execution and Bankruptcy Law (“EBL”) enables a company in financial difficulty to propose a composition to its creditors to restructure its debts. However, EBL only provides formal proceedings and does not provide out of court workouts. As a result, courts do not have the authority to order a creditor to cooperate with an informal composition. Therefore there is a lack of safeguards in favour of debtors with regards to any informal composition proceedings under the current legislation.
A foreign creditor has the right to initiate a lawsuit or an enforcement proceeding against a debtor in Turkey even if there is no reciprocal agreement between Turkey and the creditor's own jurisdiction.
In Cukurova Finance International Ltd v Alfa Telecom Turkey Ltd [2013] UKPC 2, the Privy Council held that a borrower may claim relief from forfeiture notwithstanding that the forfeited security has been appropriated by the lender in satisfaction of a debt.