How to collect receivables of a foreign company or person through enforcement ?
Receivables collection procedures are generally similar for Turkish or foreign companies and individuals. This article will also touch on important points regarding how a foreign company or individual can collect their receivables in Turkey.
There are different methods of enforcement proceedings in Turkish law. In all of these, foreigners are required to pay a certain amount of collateral, but if there is reciprocity between the country of the debtor and Turkey, the creditor does not have to pay collateral.
Here, it will be important what kind of a receivable the receivable is legally. It is important whether it is a normal receivable, a lease receivable, a mortgage receivable or a promissory note. Because different methods are regulated according to the type of debt in Turkish enforcement law.
The creditor prepares a request for enforcement and submits it to the enforcement office. The enforcement office also sends a payment order to the debtor. Subsequently, if the debt is objected to, the necessary lawsuit will need to be filed depending on the situation. Although we have summarized it briefly, this process is a difficult and complex one.
There are two conditions for collecting the receivable directly by filing a lawsuit in Turkish courts.
If the debtor is a legal entity, the place where it conducts its transactions and activities must be in Turkey or the place of performance must be in Turkey. The parties must not have chosen the jurisdiction of a country other than Turkey. If these two conditions are met, a foreign company or person can file a lawsuit for collection of the receivable in the authorized and competent court. If the debtor does not object to the payment order and the pursuit is final, the creditor can request the seizure of the debtor’s assets. With the seizure, these assets will be sold by the enforcement office and the receivable will be collected.
In addition Foreign court decisions enforced by Turkish courts can only be executed after they become final.
Att. Havva KÜLÜĞ
