Enforcement of Foreign Judgments 2024 in Turkey - Part 2

What will the court do if the parties had an enforceable agreement to use alternative dispute resolution, and the defendant argues that this requirement was not followed by the party seeking to enforce?

There is no explicit provision in PIL on this issue. In the decision of the Kadikoy Fourth Commercial Court dated 17 June 2008 (Merit No. 2007/1020 and Decision No. 2008/386), the court rejected the defendant’s objections regarding alternative dispute resolution based on the following grounds:

'There is no dispute that the Uzbekistan judgment becomes final and conclusive after the appeal process in Uzbekistan where the defendant submitted his arbitration objection. Thus, the final and conclusive judgment containing no provisions which may violate Turkish public policy should be enforced since all requirements stated in article 54 of PIL were met.'

Although the Supreme Court has not discussed this issue until now, provided that the numerus clausus conditions of the enforcement have been met, the courts will likely accept the enforcement of judgment case disregarding the parties’ objections as to an agreement on alternative dispute resolution, probably on the basis that an objection regarding the existence of alternative dispute resolution clauses between the parties is something that should have been evaluated by the court that rendered the actual decision on the merits of the dispute.

Are judgments from some foreign jurisdictions given greater deference than judgments from others? If so, why?

Turkey does not give greater deference to judgments from some foreign jurisdictions. However, the determination of de facto reciprocity may take longer for certain foreign jurisdictions since the courts sometimes prefer to confirm the reciprocity with the Turkish Ministry of Justice.

Will a court ever recognise only part of a judgment, or alter or limit the damage award?

The Turkish court will examine a foreign judgment to determine whether the requirements for enforcement are met. The court may decide to enforce the foreign judgment as a whole or in part as per Article 56 of PIL.

However, the court may not alter or limit the damage award as long as the award does not violate Turkish public policy. There is an opinion that, since punitive damages are considered incompatible with the principles of Turkish liability law, they are considered, because of their nature, incompatible with Turkish public policy. In other words, material damages exceeding actual loss are considered incompatible with Turkish public policy.

According to the general principle of ‘civil courts’ commitment to the request of the plaintiff’, in Turkish law, if the claimant requests only a part of the judgment to be enforced, the said part will be enforced by the court.

What effect do foreign or domestic sanctions have on the enforcement of foreign judgments in your jurisdiction? Will a court refuse enforcement of a judgment against or in favour of a sanctioned entity or individual? If so, which sanctions regimes do the courts of your jurisdiction recognise?

There is no specific rule regulating the impact of foreign or domestic sanctions on the enforcement of foreign judgments in Turkey. In this regard, a foreign or domestic sanction would not qualify as an obstacle before the enforcement of a foreign judgment per se. That being the case, as mentioned earlier, one of the issues examined by Turkish Courts in enforcement actions is the explicit violation of Turkish public policy. In the event that Turkish courts deem enforcement of a foreign judgment in breach of public policy due to the existence of a foreign or domestic sanction, the enforcement request may be rejected, depending on the specifics of the case.

In recognising a foreign judgment, does the court convert the damage award to local currency and take into account such factors as interest and court costs and exchange controls? If interest claims are allowed, which law governs the rate of interest?

Turkish courts do not convert the damage award into local currency. However, during the collection process, the debtor may prefer to make the payment in Turkish liras. The court costs and the official attorneys’ fees, which will be determined in favour of the successful party according to the annual tariff of the Turkish Bar Association, will be in the Local currency.

Concerning interest, the interest rate determined in the foreign judgment shall be applied until the collection procedure in Turkey.

Is there a right to appeal from a judgment recognising or enforcing a foreign judgment? If so, what procedures, if any, are available to ensure the judgment will be enforceable against the defendant if and when it is affirmed?

Under article 57 of the Act on Private International Law and International Procedural Law, court decisions regarding the recognition and enforcement of a foreign judgment can be appealed as per the general provisions of the Turkish Procedural Code.

Under Turkish law, the courts first render their short decisions. After two or three weeks, reasoned decisions are issued.The decision of the civil court of first instance can be appealed within two weeks of notification of the reasoned decision before the regional appellate court. The parties are also entitled to appeal the decision rendered by the regional appellate court before the Supreme Court within two weeks of notification of the regional appellate court’s decision.

The appeal process prevents the execution of the Turkish court’s decision regarding enforcement of the foreign judgment. In other words, the foreign judgment cannot be executed until the Turkish court’s decision regarding enforcement of a foreign judgment becomes final and cannot be appealed.

If the debtor does not comply with the Turkish court’s decision regarding enforcement of the foreign judgment, the claimant can have the decision executed by application to the bailiff’s office. The debtor must comply with the executive order within seven days of the notification. Otherwise, the claimant can apply for the attachment of assets that the debtor may have.

Once a foreign judgment is recognised, what is the process for enforcing it in your jurisdiction?

Under Turkish law, recognition and enforcement of a foreign judgment are regulated separately. In principle, enforceable judgments can be enforced, whereas declaratory judgments can be recognised. The party can request an enforceable judgment to be recognised as well. However, in such a case the party cannot enforce this judgment. The recognised judgment can be used as conclusive evidence and decision.

The process of enforcement of a foreign judgment is regulated under articles 50 to 57 of the Act on Private International Law and International Procedural Law.

The claimant must file a case for enforcement of a foreign judgment before the civil court of first instance that has jurisdiction.

The petition must include:

• the names and addresses of the parties and their attorneys, if any;
• the country, court, date, number and summary of the judgment; and
• the claimant’s request of the said part if only a part of the judgment is to be enforced.

The original or an approved copy of the judgment, the approved letter, and translations showing that the judgment is final must be attached to the plaintiff’s petition.

• The requirements for enforcement of a foreign judgment are as follows:
• there must be contractual or de facto reciprocity;
• the foreign court must have respected the right of defence of the party against which enforcement is sought in Turkey;
• the foreign judgment that is subject must be final under the laws of the foreign country;
• the foreign judgment should not be on an issue subject to the exclusive jurisdiction of the Turkish courts; and
• the foreign judgment should not violate Turkish public policy.

If these conditions are met, the court will grant enforcement of the foreign judgment.

Once the enforcement decision granted by the court becomes final and binding, the plaintiff can make an application to the bailiff’s office and request the office to send an execution order to the defendant. The defendant must comply with the execution order within seven days. If the defendant fails to comply with the execution order, the claimant can apply for the attachment of assets that the debtor may have.

What are the most common pitfalls in seeking recognition or enforcement of a foreign judgment in your jurisdiction?

One of the most common pitfalls is the duration of the proceedings. In practice, recognition and enforcement of a foreign judgment takes about six to 18 months. If the decision is appealed before a regional appellate court and finally before the Supreme Court, the process will take longer.

Public policy is another common pitfall since the laws do not regulate the definition of public policy. In principle, Turkish public policy is interpreted narrowly by the courts and in this respect, only judgments that contradict indispensable and essential Turkish legal principles are considered to be violating Turkish public policy.

There have been Supreme Court precedents stating that judgments, where there is no discussion of reasoning, cannot be enforced, since they do not enable the courts to assess the requirements for enforcement and therefore breach Turkish public policy. For example, summary judgments under common law have been problematic concerning recognition and enforcement. Nevertheless, the decision of the Joint Chambers of the Court of Cassation, dated 10 February 2012, Merit No. 2010/1, Decision No. 2012/1, stated that the mere fact that a foreign decision lacks reasoning does not prevent that decision from being enforced. Decisions rendered by the Joint Chambers of the Supreme Court are binding on other chambers of the appeal court as well as the local (ie, first-instance) courts. Therefore, the recognition and enforcement of a foreign judgment can no longer be denied owing to the violation of Turkish public policy merely because the judgment does not include a discussion of reasoning.

Contractual or de facto reciprocity can be another pitfall for the enforcement of a foreign judgment. Although Turkey has signed bilateral treaties with 29 countries, there are still many countries whose decisions cannot be enforced in Turkey owing to the principle of reciprocity.

The jurisdiction of the court to hear the enforcement application is also a pitfall. Although civil courts of first instance are the courts having jurisdiction, there is no unity in practice because some civil courts of first instance reject applications on the grounds of lack of jurisdiction, instead sending the file to the relevant specialised court, such as a commercial, intellectual property or labour court. The recent Supreme Court precedents point towards specialised courts. Confusion may still arise between specialised courts owing to complex and multi-faceted subject matter. For instance, for disputes relating to intellectual property, some Supreme Court precedents rule for the jurisdiction of the intellectual property courts, while others indicate the commercial courts. In those cases, there is a risk that the court may reject the case due to non jurisdiction and the counterparty may appeal this decision to prolong the proceedings.

Finally, the issue of court fees is another important pitfall. According to the Turkish Act on Fees, if the subject matter of the judgment seeking to be enforced is monetary, a proportional fee (6.831 per cent of the total amount in dispute) shall apply to enforcement applications, and one-quarter of this amount is payable on filing the application. If the judgment’s subject matter is not monetary, a fixed court fee, depending on the subject matter, will be applied. However, although the general approach regarding court fees has been explained, there is no firmly settled practice in this regard in Turkey, and some courts apply fixed fees for enforcement applications, whereas some chambers of the Supreme Court seldom apply proportionate court fees.

Are there any emerging trends or hot topics in foreign judgment enforcement in your jurisdiction?

Regardless of the current Russia/Ukraine conflict, reciprocity is generally a problematic issue in the enforcement of foreign judgments rendered by Russian courts. There is no bilateral treaty between Turkey and Russia regarding the enforcement of foreign judgments. There are also not many court precedents on the enforcement of Russian judgments in Turkey in general. Although there are some local court decisions that have allowed the enforcement of Russian judgments, a recent Regional Court of Appeal decision dated March 2023 ruled that judgments of Russian courts cannot be enforced in Turkey due to lack of reciprocity, based on a letter obtained by the Turkish Ministry of Foreign Affairs from the Russian Ministry of Foreign Affairs.

In addition to the above, where the Russian court disregarded contractual jurisdiction or choice of forum clauses in which the parties agreed to have their disputes resolved by arbitration or the courts of a jurisdiction other than Russia, Turkish courts would not conduct a fairness examination of the foreign judgment as they would deem it as an issue to be addressed by the court that rendered the decision subject to the enforcement. The court’s examination will be limited to the enforcement requirements determined in articles 54 and 55 of the Act on Private International Law and International Procedural Law (prohibition of révision au fond).

On a separate note, the Russian/Ukraine conflict appears to have become a problem raised by parties in certain disputes concerning the enforcement of judgments. For instance, a Regional Court of Appeal decision considered a case where the defendant party argued that the reasoned decision was not duly served and they could not use their right to appeal for this reason, and the first instance court granted the plaintiff a definite time to present the service document. In this case, the plaintiff claimed that they were not able to obtain the requested document in due course due to the war in Ukraine, so the court must rely on the finalisation annotation. The local court dismissed the case. The Regional Court of Appeal revoked the decision due to deficient examination by stating that the court should have summoned the service document from the court. In any case, it appears likely that the Russian/Ukraine conflict may entail problems in enforcement actions, especially in terms of the arguments related to the belated and duly service of court documents.

First published by GTDT in 30.08.2023.