Enforcement of a Foreign Judgment in Turkey03 September, 2019
Global economy highly depends on the co-operation of companies from all over the world. Today, parties may do business with a foreign partner which is normally bound by a quite different legal jurisdiction.Hence, parties usually include governing law and jurisdiction clauses within their multi-national commercial contracts in order to avoid drawbacks that could originate from such a situation.
However, since judgment has been seen as a sovereign right of the state it is very common for states to require a procedure for the purpose of enforcement of a foreign judgment. Hereby we would like to briefly explain the basic points of the matter under Turkish law.
Act on Private International and Procedural Law numbered 5718 and dated December 12, 2007 (‘the Law No. 5718’) is the main legislation that regulates the issue of foreign judgments’ enforcement. As it is stipulated by 50th Article of the Law No. 5718, enforcement of a final court decree rendered by a foreign court in the course of civil lawsuits is subject to the recognition decision of a Turkish Court for enforcement. Any person that has legal interest regarding enforcement of the foreign judgment may apply for such decision.
Although Turkish Courts do not evaluate the matter of dispute again, they still check certain conditions before ruling. First of all, there must be reciprocity between the Turkey and the state where the court decision is given. Such reciprocity may originate from an agreement, a provision of law or even an existing practice. The foreign judgment shall concern an issue that is not under the exclusive competence of Turkish Courts and shall not be openly contrary to public order.
Pursuant to 54th Article of the Law No. 5718, the person against whom enforcement is requested must be duly summoned pursuant to the laws of that foreign state or to the court that has given the judgment. Turkish Courts are likely to reject enforcement cases if the defendant is not represented before the foreign court, or the court decree was pronounced in his/her absence by a default judgment contrary to local law. The defendant may also argue that conditions of the enforcement decision are not realized when the foreign judgment is given by a court that does not have an actual relationship with the matter of dispute or parties.
What is the Procedure?
As per Law No. 5718, the Courts of First Instance shall have jurisdiction over enforcement decisions. However, pursuant to 5th Article of Turkish Commercial Code numbered 6201, without regard to value and amount of the subject matter, all commercial litigation shall be dealt by Commercial Court of First Instance. Such decisions shall be requested from the court at the place of residence of the person against whom enforcement is requested in principle. The applicant may also apply to courts of Ankara, Istanbul or Izmir if that person does not have a habitual residence or domicile in Turkey.
The plaintiff must present the original court decree or a duly approved copy of it in the attachment of its petition. Turkish Courts also require an official document that states the decree is final. Last but not least, certified translation of all mentioned documents must be provided as well.
The Court may decide on full or partial enforcement of the foreign judgment when above-mentioned conditions are met, and no other reason could be found to not enforcing the judgment. In case of such decision, the foreign judgment shall be enforced just as a judgment that is given by Turkish Courts. The Court of First Instance’s decision regarding the case is open to appeal and may be challenged in accordance with the general procedure, which would halt the enforcement.
Turkey is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (‘New York Convention’). As it is stated by the 90th Article of the Turkish Constitution, duly approved international agreements bear the force of law. Turkey regulates the matter in line with the New York Convention by relevant articles of the Law no. 5718. Accordingly, parties may apply to the same procedure for the enforcement of a final and enforceable arbitration which is binding. Unless parties made an agreement for the competent court within the scope of enforcement procedure, the plaintiff may apply to the Court of First Instance at defendant’s domicile, place of habitual residence or the location of the property that may be subject to execution respectively.
Requesting party shall provide the original or duly certified copy of the arbitration agreement or arbitration clause beside of the original or duly certified copy of the final and executable or binding arbitral award in order to have an enforcement decision from a Turkish Court. It is also necessary to attach translated and duly certified copies of such documents.
Turkish Courts would reject the enforcement demand if the arbitral award is contrary to public morality or public order or the dispute is not possible to settle by an arbitral award under Turkish law. The Court may also dismiss the case when the defendant’s right of defense is not respected. Therefore, parties shall be duly notified of the appointment of arbitrators and duly represented before the tribunal or accept the procedure afterward to fulfill the criteria of protecting the right to make claim and defense. Turkish Courts may also evaluate the validity of arbitration agreement/clause under governing law designated by parties or arbitral procedure’s compliance with relevant legislation and agreements.
Things to Keep in Mind
The court fee for such cases is still a debated issue in Turkey. While 11th Chamber of Turkish Supreme Court consistently declares that enforcement cases are subject to fixed fees since local courts do not evaluate the dispute itself, 19th Chamber of Turkish Supreme Court has ruled that requesting party shall pay proportional fees for enforcement cases. Considering the fact that, proportional fees may amount to a high sum of money depending on the value of the matter in dispute, those who plan to apply Turkish courts to have an enforcement decision should be prepared for such a payment. Even though it is disputed, Turkish courts are likely to demand proportional fees for enforcement cases in accordance with special notice of the Turkish Revenue Administration on the topic.
11th Chamber of Turkish Supreme Court decision numbered 2015/3987-10984
19th Chamber of Turkish Supreme Court decision numbered 2012/1885-5598
Turkish Revenue Administration, Special Notice numbered 97895701-155[2017/233]-844975 and dated 21/09/2018, https://www.gib.gov.tr/yabanci-hakem-kararlarinin-turkiyede-icrasi-icin-acilacak-tenfiz-davasi-sirasinda-harc-ve-turkce, (accessed: 28.08.2019)
Author: Kaan Erdoğan