The Law numbered 7101 on the Amendments in Enforcement and Bankruptcy Law and Certain Laws

Dear Business Partners,

The Law numbered 7101 on the Amendments in Enforcement and Bankruptcy Law and Certain Laws (“Law”) was published in the Official Gazette dated 15.03.2018 and numbered 30361. The Law stipulated important changes regarding the Enforcement and Bankruptcy Law numbered 2004 (“EBL”).

The most significant amendment stipulated by the Law is abolishment of the institution of postponement of bankruptcy and regulation of the provisions regarding the institution of concordat.

While the enforcement courts used to be the competent courts for the request of concordat prior to the amendment, the commercial courts of first instance became competent pursuant to the Law.

An important regulation regarding the term of concordat is the definition of a new concept under the name of “temporary concordat term”. The temporary concordat terms, which bears the same legal consequences with the definitive concordat term, is in principle three months and this term may be extended for two more months.

In the event that it seems possible for the concordat to be accomplished, it is accepted that the one year long definitive term which is granted to the debtor may be extended up six months in particular situations.

Proceedings through the foreclosure of the pledged property may be commenced or continued for the receivables ensured by pledged property, during the definitive term. However measures of conservation may not be taken due to the proceedings and the pledged property may not be sold.

Distinctly from bankruptcy, it is stipulated that debtor shall continue commercial activities during the concordat term and the contracts shall not be terminated because of the concordat, procedures and principles regarding the preparation of the concordat project are included.

The debtor or the creditor who has demanded concordat, can appeal the decision before the Regional Court of Appeal within 10 days as of the notification of the decision, other creditors can appeal the decision before the Regional Court of Appeal within 10 days as of the announcement of the confirmation decision; the decision of the Regional Court of Appeal can be appealed within 10 days before the Court of Cassation.

The law stipulates that goods and rights that constitute a commercial or economic entirety or that appears to yield a higher income when sold as an entirety, shall be converted into money as an entirety.

According to the Law the priority of the receivables under article 206 of the EBL alters. In this regard, the Law stipulates that certain public receivables such as customs duty be paid with priority to other receivables, after the receivables ensured by pledged property are covered.

In the scope of the Law, the terms for certain transactions to be made by the bankruptcy office are shortened.

Pursuant to the Law the provisions that were in force at the time of the request of postponement of bankruptcy and concordat shall continue to apply to the requests that were pending at the date of entry into force of the temporary article 14 of the EBL.

Other amendments are also stipulated in the scope of the Law, for the purpose of expediting adjudication. In this regard, the scope of the persons who are subject to electronic notification is widened and for this purpose the establishment of the National Electronic Notification System is stipulated.

According to the amendment stipulated under this Law, in the International Arbitration Law the Regional Courts of Appeal are determined as the competent courts regarding the law suits for the annulment of the final decisions in the arbitration proceedings. According to this amendment, in the event that a need for a court decision arises during the arbitration proceedings, the civil courts of first instance or commercial courts shall be competent, according to the nature of the dispute.

It shall be underlined that the said Law stipulates that the commercial disputes that are under TRY 100.000 shall be subject to the expedited procedure. Moreover, the term of duty of the experts in the disputes and works that are subject to expedited procedure are stipulated as two months for the completion of the adjudication in a reasonable period of time.

Please find the full text of the Law here.

Should you need any further information, please do not hesitate to contact us.

Kind regards,

Ferko Signature, Büyükdere Caddesi, No. 175, Kat. 3, 34394 Esentepe - Şişli, İstanbul

+90 212 291 73 83 (pbx) | +90 212 291 73 82 (fax)

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