Law No. 7445 on the Amendment of the Enforcement and Bankruptcy Law and Certain Laws Constituting the 7th Judicial Package was Published in the Official Gazette on 5 April 2023

New Development

Law No. 7445 on the Amendment of the Enforcement and Bankruptcy Law and Certain Laws (“Law No. 7445“), also known as the 7th Judicial Package, was published in the Official Gazette dated 5 April 2023 and numbered 32154. You may access Law No. 7445 here.

Law No. 7445 introduced certain substantial amendments to various laws:

Amendments to the Enforcement and Bankruptcy Law

• Pursuant to Article 79/a of Enforcement and Bankruptcy Law No. 2004 (“EBL“), in order to be able to conduct an attachment on a residence, the bailiff must first apply to the execution court and obtain the approval of the judge confirming that the place subject to the attachment is a residence. This approval will not be required in the event of a precautionary attachment.
• Pursuant to Article 82/1-p.3 of the EBL, personal belongings of family members and all household goods for common use of the family members are included in the scope of goods that cannot be attached.
• Pursuant to Article 85/1 of the EBL, attachment beyond the amount of the receivable subject to the enforcement proceedings (i.e., excessive attachment) is prohibited. As there are various misapplications in practice, we believe that this amendment will provide guidance.
• Pursuant to Article 88/a of the EBL, goods that are no longer required to be preserved will be liquidated ex officio if they are still in the custody of a trustee (yediemin). The relevant enforcement office is obliged to first notify the debtor that it can retrieve the goods subject to the payment of the trustee fee, and, otherwise, that the goods will be liquidated. If the debtor does not receive the goods from the trustee, the owner of the pledge right placed on the good will be invited to exercise its rights arising from the pledge, and if this right is not exercised, the good will be put up for sale by auction.

The amendments to the EBL entered into force on 5 April 2023.

Amendments to Attorneyship Act

• Pursuant to Article 43 of Attorneyship Act No. 1136 (“Attorneyship Act“), financial support will be provided to cover the expenses incurred by attorneys to establish their own law firm.
• Pursuant to Article 65 of the Attorneyship Act, in order to financially support attorneys who are new to the legal profession, the bar association fee will not be collected from them for the first 5 years of their practice.
• In order to strengthen the judicial assistance system in accordance with Article 180 of the Attorneyship Act, the rate of fees and fines, which are among the revenues of the judicial assistance bureau, will be increased to 3%.

Amendments to the Attorneyship Act entered into force on 5 April 2023.

Amendments to the Law on the Establishment, Duties and Authorities of the Civil Courts of First Instance and Regional Courts

• Pursuant to Article 5 of Law on the Establishment, Duties and Authorities of the Civil Courts of First Instance and Regional Courts No. 5235, the monetary limit for cases that the commercial courts of first instance will hear as a committee is one million Turkish liras. The monetary limit will be adjusted every year in line with the revaluation rate.

The amendments to the Law on the Establishment, Duties and Authorities of the Civil Courts of First Instance and Regional Courts entered into force on 5 April 2023.

Amendments to the Code of Criminal Procedure

• The amended Article 193/2 of the Code of Criminal Procedure No. 5271 (“CCP“) stipulates that the case may be decided in the absence of the defendant, even if the defendant has not been interrogated in case it is concluded that, according to the evidence collected, the court should render a decision other than conviction, lack of ground for imposing a penalty (ceza verilmesine yer olmadığı) or security measures.
• The amended Article 231/12 of the CCP provides that an objection can be made to the decision on deferral of the announcement of the verdict (hükmün açıklanmasının geriye bırakılması). Accordingly, the manner in which the relevant authority presented with the objection will examine it is also regulated.
• With the amendment made to Article 308/A of the CCP, the Public Prosecutor’s Office’s authority to object to the decisions of the regional court has been revised.

The amendments to the CCP entered into force on 5 April 2023.

Amendments to the Law on Misdemeanours

• With the amendment made to Article 43/A of the Law on Misdemeanours No. 5326 (Kabahatler Kanunu), the term “a private law legal entity” in the first paragraph of the article regulating the liability of legal entities has been changed to “a legal entity”.

The amendments to the Law on Misdemeanours entered into force on 5 April 2023.

Amendments to the Turkish Commercial Code

• Pursuant to Article 4 of Turkish Commercial Code No. 6102 (“TCC“), commercial disputes with an amount or value less than one million Turkish liras will be resolved before a single judge and through a simple trial procedure. The monetary limit will be adjusted annually in line with the revaluation rate.
• Annulment of objection and restitution lawsuits and negative declaratory actions that fall within the scope of Article 5/A of the TCC are subject to mandatory mediation.

While the amendment to Article 5/A of the TCC will enter into force on 1 September 2023, the remaining amendments entered into force on 5 April 2023.

Amendments to the Mediation Act

• With the addition to Article 17 of Act on Mediation in Civil Disputes No. 6325 (“Mediation Act“), the mediator shall inform the parties that are not present at the mediation about the minutes issued at the end of the mediation activity and its consequences by using all means of communication.
• Article 17/A of the Mediation Act aims to harmonize with the Singapore Convention (“Convention“), which entered into force on 11 April 2022. According to this provision, in order for a settlement agreement subject to the Convention to be enforceable in Türkiye, a certificate of enforceability must be obtained from the commercial court of first instance. The court will examine the matter of issuance of a certificate of enforceability in accordance with the provisions of the Convention and Article 18 of the Mediation Act.
• Pursuant to Article 17/B of the Mediation Act, disputes regarding the transfer of immovable or the establishment of limited rights in rem on an immovable are now eligible for voluntary mediation. This amendment will enter into force on 1 September 2023.
• Pursuant to Article 18/4 of the Mediation Act, the settlement agreement jointly signed by the attorneys and the mediator for commercial disputes will be deemed to have the nature of a court judgement without the need for a certificate of enforceability. In this regard, the signature of the parties is not required.
• Pursuant to Article 18/A/7 of the Mediation Act, the mediator is obliged to inform the party it self about the mediation process, even if the party is represented by an attorney. This amendment will enter into force on 1 September 2023.
• Pursuant to Article 18/A/16 of the Mediation Act, in the event that an enforcement proceeding is initiated against the applicant regarding the mediation subject after the application to the mediation office, the applicant (plaintiff) will be entitled to file a negative declaratory action against the proceedings pursuant to Article 72 of the EBL within two weeks from the date of the issuance of the final report and benefit from the opportunities set forth in Article 72/2 of the EBL if requested. The amendment will enter into force on 1 September 2023.
• Pursuant to Article 18/B of the Mediation Act, it is necessary to apply to a mandatory mediation before filing a lawsuit in the following disputes: disputes arising from a lease relationship (except for provisions regarding the evacuation of leased immovables through an execution proceedings without judgment according to the EBL), the allocation of movables and immovables and the elimination of joint ownership and disputes arising from Condominium Law No. 634 and the neighboring rights regulated under the Turkish Civil Code No. 4721. The amendment will enter into force on 1 September 2023.

With the exception of the amendments that will enter into force on 1 September 2023, the amendments to the Mediation Act entered into force on 5 April 2023.

Amendments to the Labour Courts Act

• Annulment of objection and restitution lawsuits and negative declaratory actions falling within the scope of Article 3 of Labour Courts Act No. 7036 are subject to mandatory mediation.

In addition to the above mentioned amendments, Law No. 7445 also provided various amendments on; Act on the Suppression of Narcotic Drugs No. 2313, Act on Firearms and Knives and Other Weaponry No. 6136, Anti-Terrorism Act No. 3713, Turkish Civil Code No. 4721, Turkish Penal Code No. 5237, Act on the Execution of Sentences and Security Measures No. 5275, Act on Probation Services No. 5402, Anti-Smuggling Act No. 5607, and Act on the Settlement of Certain Applications to the European Court of Human Rights by Payment of Compensation No. 6384.

Conclusion

With Law No. 7445, a number of significant amendments have been made to certain laws. The amendments introduced within the scope of the EBL include certain amendments in favour of the debtor. Within the scope of the Mediation Act, the new mandatory requirement to apply to a mediator before filing a lawsuit in disputes regarding lease agreements aims to resolve the recent increase in the number of lease disputes at the mediation stage. Finally, it has been ensured that certain disputes related to real estate are subject to voluntary mediation, with the amendments made to the TCC and the Labour Courts Act, the scope of cases subject to mandatory mediation has been expanded and it has been clarified that annulment of objection and restitution lawsuits and negative declaratory actions are subject to mandatory mediation.