Melisa Işık

Intern Attorney

03.04.2024

Collection Of Foreıgn Receıvables In Turkey Introduction

COLLECTION OF FOREIGN RECEIVABLES IN TURKEY

INTRODUCTION

Today, commercial life is developing day by day. One of the biggest factors that play a role in the development of commercial life is international conventions. At this point, in international conventions of great importance, the issue of determining the receivable subject to performance in foreign currency is frequently encountered. Regarding the foreign currency receivables in question; if they are not paid on time, problems such as the currency in which the performance of the debt will be requested, the interest rate or the exchange rate to be applied are encountered. For this reason, first of all, the concept of foreign receivables should be clarified and then attention should be drawn to the way to be followed within the framework of the problems encountered.

If the performance price is determined in a foreign currency, there is a foreign currency debt. Foreign currency debts are organized into two categories. The first of these is the real foreign currency debt, if it is decided that the payment can only be made in the determined foreign currency and if there is a payment or an expression that means it exactly. In general, the Court of Cassation is of the opinion that if the parties agree on foreign currency, unless otherwise understood, this money is a real foreign currency debt.1 It should also be known that in case of real foreign currency debts, the debtor has no possibility to pay his debt in Turkish currency. Side actions related to real foreign currency debt must also be paid in foreign currency. It must be paid in agreed money. The second is the unreal money debt that arises if there is no such regulation. The money debt, which is the subject of the act to be performed in unreal foreign currency debts, does not need to be paid in full. The debtor has the right to choose whether the foreign currency is paid in kind or in a way that corresponds to the Turkish Lira over the current date of maturity or actual payment. If the creditor does not want to default, he must accept such payment.2

 

THE CONCEPT and LEGAL NATURE of FOREIGN CURRENCY DEBT

Foreign currency debt is one of the types of money debts. If the currency that constitutes the subject of the debt is a currency other than the country's currency, foreign currency debt can be mentioned. In other words, the currency to be performed is different from the currency to be performed in foreign currency debts. It will be decided whether the type of money debt to be paid is a foreign currency debt by looking at the place of performance. The money debt in question is discussed in detail in the Code of Obligations No. 6098.

Foreign currency debts regulated in Article 83 of the former Code of Obligations No. 818, which are not currently in force, are regulated in Article 99 of the Code of Obligations No. 6098. Considering the Old Code of Obligations, "The debt, the subject of which is money, is paid with the money of the country. If the contract is inherited on a money that is not legally due at the place of payment, the debt can be paid with the money of the country over the current value on the day of the maturity, unless the execution of the contract is stipulated by the words "to pay exactly" or an equivalent expression. If the foreign currency debt is not paid on time, the creditor may request that this debt be paid in Turkish currency according to the current rate on the due date or the actual payment date. " Considering the current provision, "The debt, the subject of which is money, is paid in country money. If it is agreed to be paid in a currency other than the country currency, the debt may also be paid in the country currency at the current rate on the day of payment, unless the contract contains an exact payment or a statement meaning this. Unless there is a statement in the contract that is determined in a currency other than the country currency and that means the same payment, the creditor may request that this receivable be paid in the country currency on the same day or on the due date or on the actual day of payment. " It is seen that it has been changed in the form of.

When both articles are compared, it is seen that the concept of "place of payment", that is, the place of performance in today's Turkish, has been removed in the new law. However, this change does not eliminate the importance of the above-mentioned place of performance. In order for us to determine the foreign currency debt, the obligation to look after the performance continues.

3. INDEMNIFICATION OF FOREIGN MONEY RECEIVABLE

Foreign currency receivables are explained in Article 99 of the Turkish Code of Obligations No. 6098. According to the article; the debt, the subject of which is money, is paid in country money. If it is decided to pay in a currency other than the country currency, the debt may also be paid in the country currency on the day of payment, unless the contract contains an exact payment or a statement that means it. Unless there is a statement in the contract that is determined in another currency other than the country's currency and that means the same payment, the creditor may request that this receivable be paid in full or in the country's currency at the current rate on the due date or the actual payment date upon the failure to pay the debt on the payment day.

As stated, if it is decided that it can be done in foreign currency, real foreign currency debts are in question. At the stage of requesting the performance of the real foreign currency debt, the creditor does not have the opportunity in unreal foreign currency debts. In other words, when the real foreign currency debtor defaults, the creditor cannot request payment in TL over the actual payment date exchange rate. This issue is clearly stated in the provision 99/III. Some conditions are stipulated for the non-real foreign currency debtor to have the right to choose. These are:

1. The place of performance of foreign currency debt being Turkey

2. The electoral authority not being abolished by the agreement of the parties 

3. The foreign currency debtor not being in default.

If the debtor uses his option in the form of paying the TL equivalent on the due date and performs the translation, when I want to make a request on the grounds that the creditor has made incomplete performance, the 99/3 provision is applied regarding the incomplete part. If the creditor wishes, he/she will be able to claim the remaining payment amount in foreign currency, if he/she wishes, over the maturity or its equivalent on the actual payment date. The choice made by the debtor affects the creditor only if he/she performs fully according to the choice he/she makes.3

Upon the default of the non-real foreign currency debtor in performance, the optional authority of the debtor expires and the option to choose now passes to the creditor. The creditor has three alternatives to choose from: 

1. Payment of foreign currency debt in kind (in foreign currency)

2. Payment of the TL equivalent of the foreign currency on the maturity/due date

 3. Payment of the TL equivalent of the foreign currency on the actual payment date

The creditor has no rights other than these. In particular, if the payment of the TL equivalent of the foreign currency has been requested, the translator has the right to request that the translation be made over either the due date or the actual payment date. Based on a date between these two dates, it is not authorized to request translation according to this date.4

3.1 FOREIGN CURRENCY RECEIVABLES ARISING FROM THE CONTRACT

Foreign currency receivables usually exist as a result of a contract. The parties may agree to pay in full in the contract. In cases where it is decided to pay exactly, the debtor shall pay his debt in foreign currency. However, if the parties agree to pay in a currency other than the currency of the country, if there is no payment in full or no other expression in the contract, the debtor will be able to pay his debt in the currency of the country on the day of payment.

If the parties to the contract have not explicitly and implicitly determined in which currency the money debt will be paid, the problem will be solved with the general rules about the contract and the interpretation of the parties' will explanations. In addition, the known conditions of the parties at the time of the conclusion of the contract should be taken into account.4 Particular attention should be paid to the place of the contract, the place of performance or the currency issues that may have been previously agreed between the parties.

Although it is possible for the parties to conclude contracts in foreign currencies in our law, considering the recent depreciation of the Turkish currency, a restriction has been imposed on the freedom of this contract. Thereupon, Decisions No. 30 and 32 on the Protection of the Value of Turkish Currency were published. The Decree Amending the Decree No. 32 on the Protection of the Value of Turkish Currency also contains important articles. Turkish Code of Obligations No. 6098 "The parties can freely determine the content of a contract within the limits stipulated by law". The envisaged limits sentence provides the basis for the legality of the aforementioned decision. It is seen that the aforementioned regulation imposes restrictions on foreign currency debts. RESOLUTION 4: In the clause added to the article; it is regulated that the payment cannot be decided in foreign currency or indexed to foreign currency in all kinds of leasing, business, service and work contracts, including real estate and movable purchase and sale, vehicle and financial leasing, except for the exceptions determined by the Ministry. In another paragraph added to the same decision, it has been decided to redefine the contracts in which the debt subject to performance is made in foreign currency or indexed in foreign currency as Turkish currency within thirty days from the date of entry into force. The first communiqué regarding the Presidential Decision No. 85 was published by the Ministry of Treasury and Finance on 06.10.2018.

The above-mentioned Presidential Decision prohibits foreign currency debt in the types of contracts considered. Exceptions were made by the Ministry of Treasury and Finance as these prohibitions put many contracts in a difficult situation. These exceptions have been determined by amending Article 8 of the Communiqué on the Decision No. 32 on the Protection of the Value of Turkish Currency published in the Official Gazette dated 28.2.2008 and numbered 26801. Exceptions are as follows;

- Real estate sale or lease agreements to which residents of Turkey, who are not citizens of the Republic of Turkey, are parties as buyers or tenants

- Real estate lease contracts for the purpose of operating accommodation facilities provided that they are certified in the Ministry of Culture and Tourism

- Real estate leasing contracts for the leasing of duty-free stores

- Securities sales contracts to be concluded between residents of Turkey other than vehicle sales contracts

- Movable lease agreements other than vehicle lease agreements to be concluded between residents of Turkey

- Sales contracts for software produced abroad within the scope of information technologies and license and service contracts for hardware and software produced abroad to be concluded between residents of Turkey

- Financial leasing contracts for ships defined in the Turkish International Ship Registry Law No. 4490 and the Law Amending the Decree Law No. 491

- Financial leasing contracts to be made within the scope of Articles 17 and 17/A of Decision No. 32

- Employment contracts to which residents of Turkey who do not have citizenship ties with the Republic of Turkey are parties

- Without prejudice to the provisions of the sixteenth paragraph of the said law, contracts other than real estate sales and real estate leases to which public institutions and organizations or Turkish Armed Forces Strengthening Foundation companies are parties

- Within the scope of the projects to be carried out within the scope of the performance of foreign currency or foreign currency-indexed tenders, contracts and international agreements to which public institutions and organizations are parties; it is possible to decide the contract price and other payment obligations arising from these contracts in foreign currency or foreign currency-indexed in the contracts other than real estate sales contracts and employment contracts to be concluded with third parties or to be concluded within the framework of the aforementioned projects.

- It is possible to decide the contract price and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency in the contracts made in relation to the transactions carried out under the Law on Public Finance and Debt Management No. 4749. Contracts to which banks are parties in relation to these transactions

- Capital market instruments (including foreign capital market instruments and depository receipts and foreign investment fund shares) can be issued in foreign currency and obligations for their issuance, purchase, sale and related transactions can be agreed in foreign currency within the framework of the Capital Markets Law No. 6362 and the regulations made on the basis of that Law, reserving the provisions of the Decree No. 32 on the Protection of the Value of Turkish Currency.

- Employment and service contracts of foreign residents in Turkey, to which branches, representative offices, offices, liaison offices, direct or indirect shareholders of more than fifty percent or companies with which they have joint control and/or control, and companies in free zones are parties as employers or service recipients within the scope of their activities in the free zone

In the above-mentioned contract types, it is possible to decide the contract price and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency.

Passengers, cargo or mail transportation in the commercial airline business activities resident in Turkey; companies providing technical maintenance services for air transport vehicles, engines and parts thereof; operating license to perform ground handling services at airports within the scope of the civil aviation legislation, the field or the authorized public or private legal entities with business founded by concerned organizations and institutions in the status and companies directly or indirectly capital of at least 50% of the partnership owned shares ratio established in Turkey, It is possible to conclude contracts other than real estate sales, real estate leasing and employment contracts with foreign currency or foreign currency indexed amounts. The listed legal and real persons are allowed to conclude contracts other than real estate sales, real estate rental and employment contracts containing foreign currency or foreign currency indexed prices.

An important exception has also been made in terms of valuable documents. While it is not possible to determine the prices in the negotiable instruments in foreign currency or foreign currency indexed, In the case of a negotiable instrument issued and entered into circulation before the date of entry into force of this Article, this document has been considered as an exception. 

The above-mentioned exceptions brought by the Ministry of Treasury and Finance have enabled the development of commercial life by removing the prohibition of performance with foreign currency to a large extent. 

Another important provision regarding foreign currency is included in Article 32 of the Labor Law. In the second paragraph of the said article; wages, premiums, bonuses and all kinds of remuneration of this nature shall be paid in Turkish currency as a rule. Wages, premiums, bonuses and all kinds of remuneration of this nature can be paid in Turkish currency according to the market rate on the day of payment, if agreed in foreign currency. It is essential that the wage of the worker is paid in Turkish Lira. However, it is also possible to determine the wage of the worker in foreign currency. The Court of Cassation is looking for written evidence such as service contract and payroll in proving that the wage is foreign currency. Witness statements are not considered sufficient in this regard.5

3.2. FOREIGN CURRENCY RECEIVABLES AS INDEMNITY

Compensation is the compensation of the person's damage as a result of material or moral damage to the person as a result of the act performed. Payment of compensation in money is the most common form of indemnification. If there is a foreign element in cases where the victim is a foreigner or there is a contractual relationship, the currency in which the compensation will be made should be emphasized. In cases where the damage is determined in foreign currency, it is possible to damage the creditor if the compensation is decided in the currency of the country. In the event of a decrease in the country's currency, it is not possible to fully cover the loss of the creditor. However, as it is generally accepted, unless it is understood otherwise from the hypothetical wills of the parties, when the foreign currency debtor is obliged to pay a contractual compensation, it is possible to request that this compensation debt be paid in the same foreign currency. In claims for damages arising without a contractual relationship, it is accepted that the loss may be claimed to be paid in the currency of the country where the value of the damaged asset is located.6

In the decision of the Court of Cassation with docket number 2011/4260 and decision number 2012/6994; according to the evidence in the file, the plaintiff, a citizen of a foreign country, was injured and harmed as a result of the accident he/she had in our country where he/she came for a holiday. Since the plaintiff is a foreign national, the damages incurred will also be in foreign currency. In the case at hand, the dispute is gathered at the point of whether the damage suffered by the plaintiff in foreign currency as a result of the unfair action of the defendant will be decided in foreign currency or whether the foreign currency equivalent of the foreign currency on the date of the incident will be ruled or whether the Turkish currency equivalent of the foreign currency on the day of payment will be paid. According to Article 83 of the Code of Obligations (the provision in the Code of Obligations No. 6098 is Article 99), since there is a provision of the law on which the Turkish currency will be taken as a basis for the execution of the decision, and considering that the plaintiff has also suffered a loss in foreign currency, the loss should be judged in Turkish Lira on the exchange rate on the day of payment. It is not correct to decide in writing. However, since the elimination of this error does not require retrial, it was deemed appropriate to correct and approve the decision in accordance with Article 438/7 of the Code of Civil Procedure.

In order to fully cover the damage, it should be decided on which currency the compensation should be ruled by looking at the characteristics of the concrete event. In the compensation of damages arising from the contract or non-contractual reasons such as tort, first of all, payment must be made in the currency that will ensure that the damage of the creditor is fully covered.
 

3.3. FOREIGN CURRENCY RECEIVABLES FROM UNJUST ENRICHMENT

Unjust enrichment is defined in Article 77 of the Code of Obligations No. 6098 as "enrichment from the assets or labor of another person without a justifiable reason". This person is obliged to return the enrichment he has obtained. In cases where the subject of unjust enrichment is a foreign currency, it should be determined according to which currency the refund will be made. In unjust enrichment, the subject of the case is the return of exactly what provided the enrichment. However, since foreign currency debt is a type of money debt, it is often not possible to return it exactly. 

In unprovoked enrichment, it is necessary to look at the intention of the enricher in such a situation. If the person who gets rich without a justified reason is in good faith (MK art.3), he/she is obliged to return in proportion to his/her enrichment at the time of reclaim. If the money obtained is foreign currency and still exists in the enrichment without reason at the time of reclaim, then foreign currency may be requested. If this money is not available at the time of reclaiming, country money may be requested. The country currency that can be requested will be directly proportional to the increase in the assets of the enrichment without any reason. If the person who gets rich without a justified reason is malicious, the debt of restitution covers the entire enrichment. In any case, foreign currency should be able to be demanded exactly.7

3.4. FOREIGN CURRENCY RECEIVABLES AS ALIMONY

Alimony refers to the provision of financial support by one party to the other after divorce or separation. It aims to fulfill the obligation of family members to care for each other. If the alimony debtor and the alimony creditor are located in different countries, it is of great importance in which currency the alimony receivable will be collected. The prevailing view is that alimony should be governed by the currency in which the creditor is subject, having his domicile or habitual residence. In another opinion, it accepts that alimony receivables should be ruled over TL unless there is an agreement between the parties. 

In the decision of the Supreme Court, "In the concrete case; the plaintiff... Born on 06.03.2001, the other plaintiff... was born on 24.06.1999; after becoming an adult, they filed the enforcement lawsuit on 07.10.2019. In the alimony order requested to be enforced, it was decided to pay alimony in the amount of 260 Euros per child per month to their mother…, who was their legal guardian at the time, until the children were able to take care of themselves. Considering that in the aforementioned alimony order, alimony was ordered until the date of their adulthood for the benefit of the plaintiff children, it should be accepted that the plaintiff adult children have legal benefits in requesting enforcement... ".

As can be seen, it is possible to claim alimony receivables in foreign currency.

4. INTEREST ON FOREIGN CURRENCY RECEIVABLES

Interest on foreign currency receivables is regulated in Article 4/a of the Law No. 3095 on Legal Interest and Default Interest. According to the provision, "In cases where a higher contractual or default interest is not agreed in the contract, the highest interest rate paid by the State Banks to the one-year deposit account opened with that foreign currency shall be applied in the interest of the foreign currency debt." The regulation brought by law has been applied since 23.11.2019. It is not possible to apply the said provision in contracts concluded before this date. In the contracts concluded before the law entered into force, it is seen that the Court of Cassation is based on the average interest rate, not the highest interest rate stipulated by the State Banks.

In cases where the parties agree on a rate and interest is requested at this rate in the court, a decision should be made at the agreed rate. This rate may be lower or higher than the rate specified in Article 4/a of the Law No. 3095.

Again, in a decision of the Court of Cassation, there is a regulation such as "What interest will be applied to foreign currency debt, in Article 4/a of the Law No. 3095," In cases where higher contractual or default interest is not decided in the contract, the highest interest rate paid by the State Banks to the deposit account opened with that foreign currency is applied in the interest of the foreign currency debt. "
 Accordingly, while it should be decided by the court of first instance to apply the highest interest rate paid by the State Banks to the deposit account with a maturity of one year opened with that foreign currency in accordance with Article 4/a of the Law No. 3095 to the accepted receivable, it is not correct and requires reversal." 

Although the creditor claims the non-real foreign currency receivable in Turkish currency, the situation is different. In this case, if the debtor has previously defaulted, it shall calculate the interest amount of the creditor as foreign currency in accordance with Article 4/a of the Law No. 3095, then convert it into Turkish Lira and claim it together with its principal receivable. If, although the debtor has previously defaulted, the creditor has never mentioned interest in the lawsuit petition, he may later claim interest in foreign currency or Turkish Lira in a separate lawsuit.8

5. FOREIGN CURRENCY RECEIVABLES IN ENFORCEMENT LAW

Another important article regarding foreign currency debts is included in the Execution and Bankruptcy Law. Paragraph 3 of Article 58 of the Execution and Bankruptcy Law is written as "The amount of the receivable or requested collateral in Turkish currency, and for receivables with interest, the amount and the date on which the interest starts to accrue, and if the receivable or collateral is in foreign currency, the exchange rate on which date the receivable is requested and its interest...". This provision raises the issue of whether enforcement proceedings can be carried out over foreign currency debt. As stated, if there is a foreign currency receivable, it is obligatory to initiate enforcement proceedings in Turkish currency. In addition, another important issue in this regard is the interest rates on the requested date. 

The above explanations about the default interest to be applied in the event that the real foreign currency receivable is subject to enforcement proceedings 49. Accordingly, in the case of a real foreign currency debt, if the default has previously occurred, the creditor must request follow-up by calculating the interest accruing from the default date to the date of follow-up in foreign currency (in accordance with Law No. 3095 4A) and converting it into TL as of the date of follow-up together with the principal.9

The article written in the Enforcement and Bankruptcy Law clearly stated that enforcement proceedings cannot be initiated for foreign currency debt. If the receivable is in foreign currency, the creditor cannot carry out enforcement proceedings in foreign currency without a judgment. The creditor must convert the foreign currency receivable into Turkish currency and request follow-up in Turkish currency. (KURU, 2023) The money to be followed in the payment order must be in Turkish currency. The executive director cannot send a payment order that has not been translated in this way in his request. Although there is no regulation, it is possible to file a complaint against the executive director who sent the payment order. This complaint method is indefinite because it is about a subject that constitutes a violation of public order. Turkish Code of Obligations No. 6098 Article 3. According to the paragraph, the creditor may request that the foreign currency receivable be paid in Turkish currency according to the current rate on the day of maturity or actual payment. Therefore, 

- If the creditor requests that the foreign currency receivable be paid in Turkish currency at the exchange rate on the maturity or follow-up day, he/she converts the foreign currency receivable into Turkish currency at the exchange rate on the maturity date and shows this as the amount of receivable in the follow-up request.

- The creditor may claim interest in foreign currency if he/she requests the payment of his/her receivable in Turkish currency according to the market rate on the actual payment day in the request for follow-up.

The decisions of the Court of Cassation regarding the exercise of the right to choose;  "The plaintiff has used the right to choose with the lawsuit petition in favor of the country's currency, TL, and cannot request the collection of the debt in foreign currency by renouncing this preference in the merged case. In this case, while it was necessary for the court to establish a judgment on the basis of the try equivalent to be calculated on the basis of the date of the lawsuit, which is the date on which the right of choice of the foreign currency debt decided to be collected recourse from the defendant, the establishment of a judgment on the foreign currency was not correct, and the judgment had to be reversed for the benefit of the appellant defendant. "

"In the event that the foreign currency debt is not paid on time in accordance with Article 83 of the Code of Civil Procedure No. 818, which must be applied to the dispute in dispute, the creditor may request that this debt be paid in Turkish currency according to the maturity or the actual payment date. It is no longer possible for the creditor who requests in this way to renounce this preference and demand the full performance of the debt in foreign currency. In the concrete case, the plaintiff exercised his right of preference in the lawsuit petition and requested that the debt be paid in Turkish Lira, and during the trial phase, he requested that a part of the receivable be collected in foreign currency. While it was necessary to establish a judgment by considering that the plaintiff could not request collection in foreign currency by turning from the preference of the plaintiff to pay the receivable in Turkish Lira, the establishment of a judgment in Euro and TL was not considered correct; the provision had to be reversed for the benefit of the appellant defendant. " 

 

In the case of foreign currency receivables, the enforcement court may award compensation over the Turkish currency equivalent at the date of the foreign currency's follow-up. However, it cannot decide on compensation in foreign currency. 

Similarly, in the case of foreign currency receivables, in the case of cancellation of the objection, the enforcement denial compensation must be ruled over the Turkish currency equivalent on the date of the follow-up of the foreign currency; the enforcement denial compensation cannot be ruled over the foreign currency. 

6. CONCLUSION 

There are many provisions regarding the collection of foreign currency receivables in our country. Determining the legal reason for the receivable is essential for determining the provision to be applied. General provision Article 99 of the Code of Obligations No. 6098 Arising from the contract, as a compensation receivable, as a result of unjust enrichment or as an alimony receivable; the conditions to be applied with the foreign currency receivable may change.

Interest is important in foreign currency receivables. Considering the provisions of the Law No. 3095 on Legal Interest and Default Interest, the interest to be applied to the foreign currency receivable will be decided.

Finally, the provisions regulated in the Enforcement and Bankruptcy Law described above are important in the enforcement of foreign currency receivables. How foreign currency receivables should be followed up through general attachment is regulated in the articles of the said Law. Accordingly, it is obligatory to show the Turkish Lira equivalent of foreign currency receivables in the follow-up request. A payment order for which the provision is not shown will not be issued.

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