Litigation and Enforcement 2023 in Turkey - 2

Evidence

Document Disclosure

16. What documents must the parties disclose to the other parties and/or the court? Are there any detailed rules governing this procedure?

A party must disclose all evidence that it intends to rely on. A party is not required to disclose all relevant documents in its possession but must only provide documents that it deems appropriate.

Parties must act in good faith and state the truth (Article 29, CPC). However, this duty of good faith will not ensure that parties disclose all documents in their possession, as the law does not provide for a sanction for non-compliance.

The parties must submit their evidence during the exchange of petitions stage. To ensure this is done, usually with the procedural opening minutes (preliminary examination report), the courts order the parties to submit the evidence listed in their petitions or provide information on the whereabouts of any evidence that is not in their possession within two weeks of the notification. If a party fails to comply with this order, they will be deemed to have renounced their right to rely on the relevant evidence.

The evidence can alternatively be provided electronically through UYAP.

Privileged Documents

17. Are any documents or communications privileged? If privilege is not recognised, are there any other rules allowing a party not to disclose a document?

Privileged Documents

Lawyers are prohibited from disclosing any information obtained in the performance of their duties (Advocacy Code). This can be waived with the client's consent, but the lawyer can use their right of exemption to refuse to do so.

The law and case law do not say much about the scope of attorney-client privilege. However, decisions by the Turkish Competition Board are helpful guidance on the issue. According to these decisions, attorney-client privilege covers any correspondence in relation to a client's right of defence and documents prepared within the scope of an independent attorney's legal service. Therefore, correspondence between a company and its in-house attorney does not benefit from attorney-client privilege.

In addition, without prejudice privilege is available and any admission made during settlement negotiations cannot be used as evidence.

Other Non-Disclosure Situations

A party can refuse to disclose the requested evidence if it contains a trade secret.

Witnesses

18. Do witnesses of fact give oral evidence or do they only submit written evidence? Is there a right to cross-examine witnesses of fact?

Probatory Value of Different Types of Evidence

Witnesses of fact give oral evidence under Turkish law. The court can ask a witness for written evidence, if it considers it appropriate. Witness statements are considered discretionary evidence, which means the judge is not bound by this evidence. Since documentary evidence are in the nature of conclusive evidence that binds the judge, witness statements are of less value than documentary evidence.

Right to Cross-Examine

The parties' lawyers can ask direct questions to witnesses of fact. However, the parties cannot directly address questions to witnesses, but can pose questions to the judge. The judge can direct questions to the witnesses if the judge deems it appropriate.

Third party Experts

19. What are the rules in relation to third party experts?

Appointment Procedure

The courts can appoint experts if special and technical knowledge is required to solve the disputes. The experts can be appointed either on the parties' request or by the court ex officio. In both cases, the appointment is made by the court and the expert is chosen from the list published by the Judicial Commission. The parties are also allowed to instruct experts and obtain private expert reports. However, private expert reports are not a substitute for the expert examinations by court-appointed experts; they serve as additional evidence in the proceedings.

Role of Experts

The main obligations of experts are to:

• Attend the examination hearing.
• Take oath before the judge.
• Prepare and submit their report on technical issues on time.

Experts give opinions on facts determined by the courts and must not be appointed to give opinions on legal matters.

Under the written procedure, the time limit for submission of expert reports and the extension period is three months. Under the simplified procedure, the time limit for submission of expert reports and the extension period is reduced to two months.

Cross-Examination of Experts

The parties can submit their statements and objections against the expert report within two weeks of the notification of the report. If it is impossible to prepare the objections within this period or it requires a special or technical work, the parties may be granted one additional period of up to two weeks on request. If the court finds the report insufficient, it can:

• Ask for clarifications.
• Pose new questions.
• Order an additional expert examination.

Fees

The Ministry of Justice publishes a tariff of expert fees every year. The judge can increase or decrease the fees published in the tariff if the judge deems it necessary. The fees include investigation, examination, transportation, accommodation, and other relevant expenses.

Appeals

20. What are the rules concerning appeals of first instance judgments in large commercial disputes?

Appellate Courts

Decisions rendered by first instance courts where the amount subject to reviews exceeds TRY8,000 (around EUR450) can be appealed before the regional appellate courts.

Regional appellate courts can reverse the decisions of the first instance courts and can also render a new decision regarding the dispute.

The Court of Cassation (which functions as the organ of unification and development of jurisprudence) is the final instance of the appeal process and where the decisions of the regional appellate courts are appealed. However, monetary claims amounting to less than TRY107,090 (around EUR5,900) cannot be appealed before the Court of Cassation.

After the submission of an appeal, the first instance court/regional appellate court reviews whether the decision:

• Is appealable.
• Is appealed during the required period.

If these conditions are not satisfied, the case will not be forwarded to the regional appellate court/Court of Cassation.

Grounds for Appeal

The grounds for appeal before the regional appellate courts are:

• Incorrect application of the law or agreement between the parties.
• Absence of the preliminary conditions for trial.
• Unlawful dismissal of any evidence.
• Procedural errors affecting the decision.

Time Limit

The time limit for filing an appeal before the regional appellate courts is two weeks following the service of the decision rendered by the courts of first instance. The time limit for filing an appeal before the Court of Cassation is one month following the service of the regional appellate court's decision.

Class Actions

21. Are there any mechanisms available for collective redress or class actions?

Although class actions are regulated by law, they are not common in Turkey and mostly encountered in disputes related to consumer law. Associations and other legal entities can file actions to protect the interests of their members or the group they represent. In particular, actions can be commenced to:

• Rectify illegal occurrences.
• Prevent future violations of their rights.
• Determine their rights.

In cases which concern consumers in general and where there is a risk of a violation of the Consumer Law, consumer organisations can file actions for:

• Obtaining an injunction to prevent or end the harm to consumers.
• Detecting, preventing or stopping the illegal situation by any other means.

Costs

22. Does the unsuccessful party have to pay the successful party's costs and how does the court usually calculate any costs award? What factors does the court consider when awarding costs?

The official litigation costs and the official representation fees are imposed on the unsuccessful party after trial. Litigation costs are the actual expenses deposited by the claimant to the court before and during the proceedings, and include the following:

• Hearing costs.
• Decision and judgment charges.
• Notification and postage fees.
• Filing and documentation fees.
• Expert and witness fees.
• Fees and expenses relating to the documents obtained from governmental authorities.
• The official attorney fee that is determined in line with the minimum tariff of the TBA.

The court will not consider any pre-trial offers to settle when awarding costs and the court cannot manage, limit, or otherwise control costs during the proceedings. However, the court must conduct the proceedings within a reasonable time and to avoid unnecessary costs (Article 30, CPC).

23. Is interest awarded on costs? If yes, how is it calculated?

The legal interest rate, which is currently 9%, is awarded on litigation costs. The legal interest is calculated as of the date of the court decision.

Enforcement of a Local Judgment

24. What are the procedures to enforce a domestic judgment in the local courts?

The claimant can enforce a local judgment by making an application to the execution office. The defendant must comply with the enforcement order within seven days as of the notification of the payment order. Otherwise, the claimant can apply for the attachment of any assets that the defendant may have.

Cross-Border Litigation

25. Do local courts respect the choice of governing law in a contract? If so, are there any national laws or rules that may modify or restrict the application of the law chosen by the parties in their contract? What are the rules for determining what law will apply in the absence of any agreement and/or to non-contractual claims?

Contractual Choice of Law

The parties can choose the governing law that will apply to their contract for disputes containing a foreign element. However, contracts that relate to real estate or its use are governed by the law of the country where the real estate is situated. Turkish law can be applied (partly or entirely) either when the application of the foreign law is explicitly incompatible with the Turkish public order, or when directly applicable rules of Turkish law will apply, regardless of the choice of law.

The principle adopted in the International Private and Civil Procedure Code (5718) (sayılı Milletlerarası Özel Hukuk ve Usul Hukuku Hakkında Kanun) is to prioritise the parties' choice of law, therefore the same rule applies when the parties choose Turkish law as the governing law. The law does not stipulate the application of another law on grounds that it has a closer connection to the dispute where the governing law is agreed by the parties to a contract.

Generally, the Turkish courts respect the choice of law in a contract. However, in some cases, the court can broadly interpret the Turkish public order and apply Turkish law instead of the law chosen by the parties.

No Choice of Law and Non-Contractual Claims

The law with which the contract has the closest connection governs the contract, if there is no choice of law (Article 24, International Private and Civil Procedure Code). The law with the closest connection is the law of the debtor's residence or workplace (if the contract is concluded as a result of commercial and professional activities). However, if there is any other law having a closer connection, that law governs the contract.

Non-contractual claims are subject to the same general principle (that is, the law having the closest connection applies). The International Private and Civil Procedure Code specifies the closest law to apply for claims arising from tortious acts and unjust enrichment.

Contractual Choice of Forum

26. Do local courts respect the choice of jurisdiction in a contract? Do local courts claim jurisdiction over a dispute in some circumstances, despite the choice of jurisdiction?

In principle, contracting parties can make a choice of jurisdiction regarding disputes arising from contractual obligations, unless the subject matter is within the exclusive jurisdiction of the Turkish courts (such as disputes relating to employment, insurance, and consumer contracts).

Turkish courts will hear the case, if the foreign court finds itself incompetent or the parties do not make a plea of jurisdiction before Turkish courts.

The Turkish courts will generally hear the case in Turkey if the jurisdiction clause in the contract is unclear.

27. If a party wishes to serve foreign proceedings on a party in your jurisdiction, what is the procedure to effect service in your jurisdiction? Is your jurisdiction a party to any international agreements affecting this process?

Turkey is a party to the HCCH Convention on Civil Procedure 1954 (Hague Civil Procedure Convention) and the HCCH Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters 1965. Therefore, service of a foreign proceeding in Turkey can be made in accordance with these Conventions.

If a bilateral agreement has been concluded between Turkey and the foreign country in question, the provisions of that agreement will govern the service of proceedings.

Taking of Evidence for a Foreign Court Proceeding

28. What is the procedure to take evidence from a witness in your jurisdiction for use in proceedings in another jurisdiction? Is your jurisdiction party to an international convention on this issue?

Turkey is a party to the Hague Civil Procedure Convention and HCCH Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970. Therefore, the process of taking evidence from a witness in Turkey to be used in another jurisdiction is subject to the rules set out in these Conventions.

If a bilateral agreement has been concluded between Turkey and the foreign country, the terms of the agreement will be applicable. If there is no such agreement and the foreign country has not adopted the above Conventions, the Turkish courts will consider if there is reciprocity between the two states. If reciprocity is established, the procedure for taking evidence is governed by the international legal assistance rules.

Enforcement of a Foreign Judgment

29. How are foreign judgments enforced in your jurisdiction?

The following requirements must be met to enforce a foreign judgment in the local courts:

• There must be a contractual or de facto reciprocity on enforcement of foreign judgments between Turkey and the country where the foreign judgment was rendered.
• The decision must be final, binding, and enforceable under the laws of the foreign country.
• The decision must not concern a matter that is subject to the exclusive jurisdiction of the Turkish courts.
• The decision must not breach the Turkish public order.
• The counter party's right of defence must be respected and complied with.

Turkey has concluded bilateral treaties with several countries for the enforcement of foreign judgments, such as Albania, Algeria, Austria, Azerbaijan, Bosnia and Herzegovina, Bulgaria, China, Croatia, Egypt, Georgia, Iran, Iraq, Italy, Kazakhstan, Kuwait, Kyrgyzstan, Lithuania, Macedonia, Moldova, Mongolia, Oman, Poland, Republic of Turkish Northern Cyprus, Romania, Slovakia, Tajikistan, Tunisia, Turkmenistan, Ukraine, and Uzbekistan.

In addition, on the basis of the de facto reciprocity principle, the Turkish courts can enforce judgments rendered in several countries including Germany, the UK, and the US. However, as law and practice differ in each US state, the ability to enforce a US judgment depends on the subject matter of the dispute and the state where the judgment was issued.

Alternative Dispute Resolution

30. What are the main alternative dispute resolution (ADR) methods used in your jurisdiction to settle large commercial disputes? Is ADR used more in certain industries? What proportion of large commercial disputes is settled through ADR?

The main ADR method used in Turkey is arbitration. It is used more in certain industries such as construction, energy, and infrastructure. Voluntary mediation is another preferred ADR method. Both the use of arbitration and voluntary mediation continue to increase.

31. Does ADR form part of court procedures or does it only apply if the parties agree? Can courts compel the use of ADR?

Arbitration does not form part of court proceedings. However, mandatory mediation is a cause of action for labour law-related disputes, commercial monetary claims, and consumer law-related disputes. Other ADR methods are subject to the parties' voluntary choice.

32. How is evidence given in ADR? Can documents produced or admissions made during (or for the purposes of) the ADR later be protected from disclosure by privilege? Is ADR confidential?

In local arbitration, parties can choose the procedural rules in relation to evidence, provided that the rules are consistent with the mandatory provisions of the CPC. The provisions of the CPC relating to the collection and use of evidence in litigation also apply to evidence given in ADR.

In international arbitration, parties can also choose the rules in relation to evidence, provided that the rules are consistent with the mandatory provisions of the International Arbitration Code of Turkey (IAC) (4686) (sayılı Milletlerarası Tahkim Kanunu).

Parties can seek the assistance of the Turkish courts to collect evidence in both local and international arbitration. Neither the CPC nor the IAC contains specific provisions dealing with confidentiality. If confidentiality is an issue, parties can choose arbitration rules that expressly provide for confidentiality.

33. How are costs dealt with in ADR?

Unless otherwise agreed, arbitrators' fees in local arbitrations are determined by the arbitral tribunal or by the arbitrators, taking into account the amount in dispute and the nature and duration of arbitral proceedings. If there is no agreement or provision in the arbitration agreement, or reference to institutional arbitral rules, the Ministry of Justice tariff applies. Local arbitral awards specify the costs of proceedings. In principle, the unsuccessful party bears the costs. If both parties partially succeed, costs are borne by both parties accordingly.

In international arbitration, the parties can also determine the arbitrators' fees by reference to recognised international rules or institutional arbitration rules.

34. What are the main bodies that offer ADR services in your jurisdiction?

The main bodies that offer arbitration services in Turkey are the:

• Istanbul Arbitration Centre.
• Turkish Union of Chambers and Commodity Exchanges Court of Arbitration.
• Istanbul Chamber of Commerce Arbitration Institution.
• Turkish Football Federation Arbitration Board.
• Mediation Centre.

Proposals for Reform

35. Are there any proposals for dispute resolution reform? If yes, when are they likely to come into force?

There are no proposals for dispute resolution reform.

First published by Practical Law in 01.12.2022.

Tagged with: Gün + Partners, Asena Aytuğ Keser, Beril Yayla Sapan, Dispute Resolution