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December 21, 2023

Temporary Legal Protection Methods In Disputes Arising From Construction Agreements In Return For Land Share

Introduction

The provisional attachment mechanism is a temporary legal protection that finds its legal basis in the Turkish Execution and Bankruptcy Law No. 2004 (“EBL”) Articles 257 et seq., and the provisional injunction mechanism is also a temporary legal protection that finds its legal basis in the Turkish Civil Procedure Law No. 6100 (“CPL”) Articles 389 et seq. In order for a court to issue a provisional attachment decision, the conditions specified in Article 257 of the EBL must be met, especially in disputes arising from construction agreements in return for land share (“CARLS“) that involve claims for compensation and are filed as uncertain debt claims or partial claims, and therefore the conditions for issuing a provisional attachment decision are briefly explained in this document. Although, as a general rule, provisional injunction cannot be requested for monetary claims, in exceptional cases, provisional injunction can be issued for claims arising from CARLS, and this issue is also explained in this document.

Conditions for Issuing a Provisional Attachment Decision:

According to Article 257 of the EBL, the creditor of a matured debt not secured by a pledge can request the attachment of the debtor’s movable and immovable properties and other rights located in the debtor’s possession or in the possession of third parties as a provisional measure. If the debt in question is an immature debt, the creditor may request a provisional attachment decision only if the debtor has no fixed residence or is preparing to hide, evade, or escape, or if the debtor engages in fraudulent transactions to evade their obligations or escape, in order to secure the debt.

In light of the explanations above, in a lawsuit filed as an uncertain debt claim or partial claim due to a dispute arising from an CARLS, a third party who purchases an independent section within the scope of the ordinary written contract can request a provisional attachment decision, provided that they have paid the amount agreed within the contract, as it is certain that the damages incurred will not be less than the amount paid. However, there is no legal regulation regarding the issuance of a provisional attachment decision for the full amount in a partial claim or uncertain debt claim, and this gap is attempted to be resolved by the higher court through a “provisional injunction in the nature of provisional attachment” decision, which is addressed in a subsection.

Conditions for Issuing a Provisional Injunction Decision:

Although compensation lawsuits filed in disputes arising from CARLSs are typically considered uncertain debt claims under Article 107 or partial claims under Article 109 of the CPL, in cases where a third party who purchases an independent section from the contractor within the framework of the ordinary written contract may request that the debt not be assigned and/or transferred to anyone else as per Article 389 of the CPL and Article 391/1 of the CPL ruling that “the court … may take any precaution to eliminate the danger or prevent harm.” as a provisional measure. It should not be concluded that a money debt creditor cannot apply for a provisional injunction in order to obtain its receivables. Therefore, it is possible to impose a provisional injunction on monetary claims when certain conditions are met. For example, if the creditor has a claim against a third party who owes the debtor, the creditor can take precautions to prevent the third party from paying the debt to the debtor. [See Court of Cassation 15th Civil Chamber Judgment dated April 8, 1999, No. 1999/303 E. and 1999/1291 K. Also, see Sütçü, Nezih, Kat Karşılığı İnşaat Yapım Sözleşmesi, Volume 1, Seçkin, Updated and Expanded 8th Edition, Ankara 2023, p. 2847.]

In addition, as mentioned above, provisional injunction in the nature of provisional attachment or directly provisional injunction can also be requested for monetary claims. As stated in the decision of the Court of Cassation 9th Civil Chamber dated July 2, 2012, No. 2012/24239 E. and 2012/25011 K., during the trial process or at the beginning of the lawsuit, there is no possibility to secure the debt through provisional attachment until the claim is determined in uncertain debt claims or partial claims. In the literal interpretation of the article, it can be stated that since the securing of the money receivable is not a matter of dispute, an provisional injunction cannot be imposed on the movable or immovable property of the debtor. 

However, the essential point is the existence of a right and the emergence of a reason for a provisional injunction. The law’s preamble considers these two points sufficient. Moreover, a provisional injunction is a protective measure with lighter consequences than a provisional attachment. In the case of a provisional injunction, only a registration is made against the debtor, and the debtor can continue to exercise limited control over the property subject to the provisional injunction. In this case, in a partial lawsuit or an indefinite receivable lawsuit, there is no legal obstacle to the issuance of a preliminary injunction on the movable or immovable property of the debtor, if the right exists and the cause arises. (In the same direction, see Court of Cassation 17th Civil Chamber Judgment dated June 20, 2013, No. 2013/8825 E. and 2013/9382 K.)

Conclusion

In uncertain debt claims or partial claims filed as compensation lawsuits arising from CARLSs initiated by third parties who purchase independent sections within the scope of the ordinary written contract and where the legal requirements are met, temporary legal protection measures can be utilized by requesting either a provisional injunction or a provisional attachment, or both. 

In this context, a provisional attachment can be requested based on the amount paid to the contractor in exchange for the purchase of the immovable property, which is also considered the basis for the court fees in the lawsuit. However, even though requesting a provisional attachment for the remaining balance value from the amount shown as the basis for court fees in a partial claim or uncertain debt claim, in other words, for the total value of the lawsuit, is legally impossible because it is not possible to determine a liquidated claim or a monetary claim, it is possible to request a provisional injunction or provisional injunction in the nature of provisional attachment. Although it is not possible to request a provisional injunction for receivables that are monetary in nature, it is considered that there is no legal impediment, in accordance with the decisions of the Court of Cassation referred to above, to decide to impose a provisional injunction on the movable or immovable property of the debtor on the condition that there is a right in a partial lawsuit or in an indefinite receivable lawsuit and the cause arises. Besides, a provisional injunction may also be rendered on receivables in the form of non-payment of the receivable in order to prevent the third party from paying the debtor in the event that the debtor has a receivable from a third party.

Yours sincerely,

Kılınç Law & Consultancy

Authors

Mert Sönmüş

Mert Sönmüş

Consultant Lawyer

Kılınç Hukuk ve Danışmanlık

Kılınç Hukuk ve Danışmanlık