Enforcement Based on Negotiable Instruments

What we do in this area

In commercial life a significant share of claims is tied to cheques and promissory notes; for these instruments the law provides a separate enforcement route that runs faster than the general attachment route. The firm handles, for the creditor, checking that the instrument is fit for enforcement and conducting the proceedings; for the debtor, submitting the objection or complaint to the enforcement court within the five-day period and requesting a stay of the proceedings.

This page is a sub-topic of the enforcement and bankruptcy law tree. For claims not tied to an instrument, see the enforcement without judgment page.

Preconditions of the proceedings

To use the route specific to negotiable instruments, the instrument must contain the elements required by the Turkish Commercial Code (TTK) No. 6102, must have fallen due, and the party enforcing it must be its lawful holder. A promissory note lacking one of the compulsory elements, such as an unconditional promise to pay, the date of issue or the signature of the issuer, is deprived of its status as a negotiable instrument (TTK Art. 776 and 777); such a document can be enforced only by the general attachment route. For a cheque, it is required that the instrument was presented to the bank within the statutory presentment period and that the bank recorded on the cheque that it was dishonoured; the presentment period is ten days where the place of issue and the place of payment are the same, and one month where they differ within the same country. For cheques issued in another country, the period is one month within the same continent and three months between different continents, subject to the Mediterranean-country rule (TTK Art. 796).

Limitation is also checked before proceedings: for a promissory note, three years from the due date against the issuer (TTK Art. 749 and 778); for a cheque, three years from the end of the presentment period (TTK Art. 814). On a time-barred instrument the debtor may raise a limitation objection before the enforcement court within five days; if the objection is upheld, the claim can only be pursued before the general court on the basis of the underlying relationship or the rules on unjust enrichment.

The payment order and the periods

The basic difference from the general attachment route is that the objection is made to the enforcement court rather than the enforcement office; an objection petition filed with the enforcement office has no effect. The second difference is the effect of the objection: it does not stop enforcement steps other than the sale (Article 169 of the Enforcement and Bankruptcy Code, İİK); the creditor may request attachment, but the attached asset cannot be sold. Together with the objection, the debtor may request that the proceedings be stayed provisionally; if the enforcement court regards the documents submitted as serious, it may stay the proceedings until its decision on the merits.

Denial of signature and proof of the objection to the debt

In an objection to the debt, the debtor must as a rule prove defences such as payment, release or extension of time with an official document or one whose signature is admitted by the creditor (İİK Art. 169/a); witnesses are not heard. The defence most often raised is the claim that the instrument was given as security; this claim must rest on a written document showing clearly which relationship the instrument secures. Without such a document the matter is not resolved in the enforcement court and is left to a negative declaratory action (menfi tespit) to be brought before the general court.

In an objection to the signature, the enforcement court investigates through a court-appointed expert whether the signature belongs to the debtor. The sanction for the party found to be in the wrong is heavy: a debtor who wrongfully denies their signature is, if the proceedings were stayed on the objection, ordered to pay compensation of not less than twenty per cent of the claim and a fine of ten per cent; if the objection is upheld, the same sanctions arise for a creditor shown to have acted in bad faith or with gross negligence when putting the instrument into enforcement (İİK Art. 170).

Additional routes for dishonoured cheques

Besides enforcement proceedings, a dishonoured cheque constitutes an offence prosecuted on complaint under Article 5 of the Cheque Law No. 5941, and the complaint is subject to a separate period. For each dishonoured cheque leaf presented in time, the drawee bank is obliged to pay the holder the amount fixed by law (Cheque Law Art. 3). In commercial matters, advance interest (avans faizi) may be claimed on the enforced amount (Article 2 of Law No. 3095). These routes do not exclude one another; the order is determined by the file.

How we work

On the creditor's side, before it is put into enforcement the instrument is examined for its elements, due date, presentment record and chain of endorsements; a missing element leads to annulment of the proceedings by way of complaint. On the debtor's side the first task is to calculate the five-day period from the date of service and to establish whether the defence can rest on documents that will succeed in the enforcement court. Where there is no document, a negative declaratory action with security is considered instead of a stay of the proceedings.

The page where we explain the process in detail: Our working process.