Search
Close this search box.
Search
Close this search box.

May 2, 2024

The Competent Court In The Action For Negative Declaration Initiated By The Tenant Against The Mortgage Creditor Due To The Enforcement And Bankruptcy Law 150/b Order

INTRODUCTION

The action for negative declaration is defined as a lawsuit initiated by a debtor before or during enforcement proceedings to establish that the debtor is not the obligor of the debt subject to enforcement. In other words, it is a lawsuit filed to prove that there is actually no debt or invalid legal relationship for which enforcement proceedings have been initiated or threatened. The provisions regarding action for negative declaration are regulated in the Enforcement and Bankruptcy Law No. 2004 (“EBL”).

Article 150/b of the EBL titled “notifying the tenants” stipulates that a notice must be sent to the tenant in order to inform the tenant of the mortgaged real estate of the enforcement proceedings and to make the tenant pay the rent to the enforcement file. The article further states that if the tenant fails to deposit the rent into the enforcement file despite the notice, Article 356 of the EBL will be applied by comparison against the tenant. This notice is known as 150/b order in practice. Pursuant to the precedents of the established Court of Cassation, the tenant, who claims that there is no rent debt within the scope of the mortgaged property, must apply to the enforcement law court within the 7 day complaint period from the notification of the 150/b order and request the cancellation of the order. Otherwise, the tenant will be added as a debtor to the enforcement file along with the mortgaged property owner, becoming jointly responsible with the owner towards the mortgage creditor.

In the event that the tenant, who does not have and/or claims that the tenant does not have any debt within the scope of the mortgaged immovable property, does not use the right of complaint before the enforcement law court within 7 days against the 150/b order and/or the complaint case is rejected, the tenant may file an action for negative declaration against the mortgage creditor in accordance with the provision regulated in Article 72 of the EBL in order to prove that there is no debt. 

However, there is no consensus as to which court is the competent court for an action for negative declaration to be brought by the legal entity tenant against the legal entity mortgage creditor.

In this article, after mentioning the competent and competent court in actions for negative declaration in general, the issue of the competent and competent court in the action for negative declaration to be initiated by the tenant who does not use his right of complaint before the enforcement law court within 7 days against the 150/b order, in order to prove that there is no debt within the scope of the mortgaged property, will be discussed together with the criterion of being a legal entity.

A. COMPETENT AND AUTHORIZED COURT IN ACTIONS FOR NEGATIVE DECLARATION

1. As a Rule

    There is no regulation in the EBL regarding which court is the competent court in the action for negative declaration, and while determining the competent court in the action for negative declaration, the source and nature of the receivable must first be determined. In other words, the competent court in the action for negative declaration shall be determined according to the source of the receivable subject to the lawsuit.

    Article 1 of the Code of Civil Procedure No. 6100 (“CCP”) stipulates that the jurisdiction of the Courts shall only be regulated by law and that the rules regarding jurisdiction are of public order, and the provisions regarding jurisdiction are regulated in the articles in the first part of the CCP. Pursuant to Article 2 of the CCP titled “Duty of the Civil Courts of First Instance”, it is regulated that, in the absence of a contrary regulation, the Civil Courts of First Instance shall be the competent court in cases related to property rights, personal assets and other cases and affairs, regardless of the value and amount of the subject matter of the lawsuit. Article 4 of the CCP titled “Duty Of The Civil Courts Of Peace” stipulates that, regardless of the value or amount of the subject matter of the lawsuit, (i) lawsuits concerning all disputes arising from the lease relationship, including lawsuits for receivables arising from the lease relationship, and lawsuits filed against these lawsuits, (ii) lawsuits regarding the division of movable and immovable property or rights and the elimination of partnership, and (iii) lawsuits for the protection of possession only in movable and immovable property, shall be heard in the civil courts of peace.

    Pursuant to Article 4 of the Turkish Commercial Code No. 6102 (“TCC”), civil lawsuits and non-contentious judicial proceedings arising from matters related to the commercial enterprise of both parties, and certain lawsuits regardless of whether the parties are merchants or not, are considered as commercial lawsuits, and commercial lawsuits are classified as absolute commercial lawsuits, commercial lawsuits provided that they are related to a commercial enterprise and relative commercial lawsuits. Article 5 of the TCC stipulates that commercial lawsuits shall be heard at the Commercial Court of First Instance.

    In this context; actions for negative declaration related to receivables arising from a commercial enterprise should be filed in the Commercial Court of First Instance, actions for negative declaration related to a receivable arising from a lease relationship should be filed in the civil courts of peace, and actions for negative declaration related to receivables where the receivable subject to the lawsuit cannot be heard in a special court should be filed in the Civil Court of First Instance.

    The authorised court for actions for negative declaration is regulated under Article 72/8 of the EBL, and pursuant to the relevant article, actions for negative declaration may be filed in the court where the enforcement office is located, as well as in the court of the defendant’s residence.

    2. Action for Negative Declaration to be Filed Due to 150/b Order

      As stated above, identifying the origin and nature of the receivable is essential for determining the appropriate court for action for negative declaration. The 150/b order is a notification sent to individuals, whether natural or legal persons, holding the status of tenant in a mortgaged property, with the purpose of directing rental payments for the mortgaged property to the enforcement file. We have explained that failure by the notified individual to exercise the 7-day complaint right allows them to initiate action for negative declaration against the mortgage creditor, seeking a determination that they are not indebted.

      In this context, it is evident that the lease agreement, which forms the basis of the 150/b order, and the rental relationship between the owner of the mortgaged property and the tenant—including rents paid within the scope of the mortgaged property—will be scrutinized in the tenant’s forthcoming action for negative declaration. Put differently, within the framework of action for negative declaration, the court will examine the lease agreement and other pertinent evidence to ascertain the rental relationship between the tenant and the lessor and/or the mortgage creditor, the tenant’s handling of due rents, and ultimately establish that the tenant does not owe any debt to the mortgage creditor within the context of the enforcement file and the 150/b order.

      Therefore, it should be acknowledged that the competent court to hear this case is the civil courts of peace. In fact, the dispute described in the decision of the 6th Civil Chamber of the Court of Cassation dated 12.06.2014 and numbered 2013/15958 E., 2014/7852 K. where it is stated “The lawsuit concerns the request for determination of non-indebtedness by the tenant. The court ruled for the dismissal of the lawsuit, and the judgment was appealed by the plaintiff’s attorney…” was adjudicated at Istanbul 10th Civil Court of Peace under file number 2013/391 E. It has been established that civil courts of peace have jurisdiction over action for negative declaration seeking a determination that the tenant has no debt to the creditor within the scope of the EBL 150/b order.

      However, there are also views and court decisions stating that the Commercial Courts of First Instance should have jurisdiction within the scope of action for negative declaration based on the 150/b order to be submitted by the legal entity lessee against the legal entity mortgage creditor. This opinion is explained by the fact that although there is no existing lease relationship between the lessee and the mortgage creditor, the 150/b order is related to the commercial enterprise of the lessee and the mortgage creditor and should be accepted as a commercial case since both parties are merchants.

      According to our opinion, it should be accepted that the Civil Court of Peace has jurisdiction in the lawsuits to be filed by the lessee against the mortgage creditor due to the 150/b order, regardless of whether the parties are merchants or not. This is because, as stated in the established Court of Cassation decisions, the jurisdiction of the Civil Courts of Peace in disputes arising from the lease relationship is an exception to Article 5/1 of the TCC. As a matter of fact, in the decision of the 6th Civil Chamber of the Court of Cassation dated 08.04.2014 and numbered 2013/13565 E., 2014/4533 K., this issue is stated as follows:

      “Disputes arising from the lease agreement constitute an exception to Article 5/1 of the TCC, and pursuant to Article 4/1-a of the CCP No. 6100, the civil courts of peace are determined as the competent court. Therefore, it is not possible to apply Article 5/1 of the TCC in disputes arising from the lease agreement. In this case, since the duty of hearing the case will belong to the civil court of peace, the court should examine the merits of the case and decide accordingly, but it is contrary to the procedure and the law to decide that the court has no jurisdiction by stating that the commercial court of first instance has jurisdiction.”

      In addition, in the decision of the Istanbul 9th Commercial Court of First Instance dated 27.03.2018 and numbered 2015/1054 E., 2018/211 K., the decision of the 6th Civil Chamber of the Court of Cassation dated 12.06.2014 and numbered 2013/15958 E., 2014/7852 K. was cited as follows:

      “When the claim, defense, precedent jurisprudence and the entire file scope are evaluated together;   The Civil Court of Peace will have to hear the lawsuits regarding all disputes, including the receivable lawsuits arising from the lease relationship, and the lawsuits filed against these lawsuits, and in the concrete dispute, the lawsuit is related to the rent receivable arising from the lease agreement and is within the scope of the duty of the Civil Court of Peace other than the duty of our court, and the issue of duty is related to the public order in accordance with Article 1 of the CCP. Article 1 of the CCP, the matter of jurisdiction is related to public order and must be considered by the court ex officio, and it is understood that the case, which is subject to the precedent jurisprudence of the Supreme Court of Justice, has been evaluated and decided by the Civil Court of Peace, and it has been ruled as follows regarding the procedural dismissal of the lawsuit due to the absence of a cause of action due to the lack of jurisdiction of our court.”

      Additionally, a ruling has been issued stating that “due to the lack of jurisdiction of our court, and pursuant to Articles 114/1-C and 115/2 of the CCP, if an application is submitted to our court within 2 weeks from the finalization of the decision on the procedural dismissal of the case due to the absence of a cause of action, the file will be transferred to the Istanbul Duty Peace Court, which is competent to handle this case.”

      B. CONCLUSION

        In the context of an enforcement file initiated by the mortgage creditor against the owner of a mortgaged property, whereby an order is served to the tenant under Article 150/b of the EBL, the tenant is obligated to pay the due rent amounts to the enforcement office. However, in some cases, it is possible that the tenant may not have any rent debt within the scope of the mortgaged property. As a rule, the tenant’s claims on this issue are listened to in the complaint case to be filed before the enforcement law court within 7 days from the notification of the 150/b order, and if the tenant is found to be right as a result of the examination made by the enforcement law court, the 150/b order shall be cancelled. In the event that the tenant does not use the right of complaint within 7 days and/or the execution law court decides to reject the complaint, the tenant claiming that there is no actual indebtedness may file an action for negative declaration against the mortgaged creditor.

        The competent court in which the action for negative declaration will be heard is determined according to the source of the receivable subject to the lawsuit. Although there are opinions that the Commercial Courts of First Instance should have jurisdiction within the scope of the action for negative declaration based on the 150/b order to be submitted by the legal entity lessee against the legal entity mortgage creditor, it is pointed out that the competent court will be the Civil Courts of Peace with the established Court of Cassation precedents.

        Indeed, after the 150/b memorandum is finalised, the source and nature of the receivable of the mortgage creditor from the tenant within the scope of the enforcement file is based on the rent debt. As such, considering Article 4 of the CCP and the precedents of the Court of Cassation, we consider that the opinions that the lawsuit should be filed in the Civil Courts of Peace are justified.

        Authors

        Ebru Özkan

        Ebru Özkan

        Senior Lawyer

        Aleyna Kekeva

        Aleyna Kekeva

        Lawyer