Debt Recovery Procedures in Turkey
Debt collection is an important aspect of any business, as overdue and outstanding invoices may very well crumble the business itself, if left uncollected. Although important, such debt recovery procedures in Turkey may be quite complex for foreigners to handle as it involves a lot of procedures and submissions to relevant execution offices. It can also be costly to immediately commence execution proceedings without making checks on the debtor.
Due to the closed nature of the market, it is extremely difficult to obtain the financial information of debtor companies. This uncertainty, coupled with the complexity of the legal proceedings and the associated costs, presents a significant issue for most foreign companies and nationals, as most of the creditors would like to obtain some sort of financial information of the debtor before starting the complex legal procedures and paying the relevant legal fees. As ASY LEGAL, we provide several different services for debt recovery procedures, including services for amicable settlements. We first review the case, check the liquidity and the standing of the debtor and inform our clients on the best and most cost efficient course of action that provides the best chance of recovering the relevant debt(s). You can find more detailed information regarding debt recovery procedures in Turkey, in our published article here (also available via Mondaq).
Recognition and Enforcement of Foreign Judgments
Debt recovery in Turkey by foreigners may also involve a foreign judgement, including the ones from arbitration courts or tribunals. In order to proceed with a collection/execution claim based on a foreign judgement, a separate filing must first be made for the recognition and enforcement for the relevant court decision and/or arbitration award. It should be noted here that foreign judgments Such foreign judgement may become recognizable under Turkish law via a separate judgment of the Turkish Courts called ‘recognition and enforcement decisions’ then be made subject to execution in Turkey. Following such decision by Turkish Court the foreign judgment becomes enforceable in Turkey as a localized Court decision and any monetary debt may be collected accordingly through execution filings dependent on the Court order. Like any other country, in Turkey as well, the recognition and enforcement of the foreign Court judgment or arbitral award inquiries may not contain or be adjudicated in a way to examine the merits of the dispute settled with the first decision and substantive local (Turkish) laws should not be applied to the contents of such decision. As ASY LEGAL we can ensure our clients receive this recognition and enforcement decision from the Turkish courts and then proceed with the debt recovery claims.