Bill 2/2735, which has been presented to the president of the Grand National Assembly, proposes that actions filed directly before the consumer courts be subject to mandatory mediation before proceeding to court adjudication. This article examines Turkey's success with regard to the fair and swift resolution of consumer disputes and explores how the bill can add to this success.
Letters of guarantee are an instrument under which a bank guarantees the payment of a certain amount to a beneficiary on request if an obligation undertaken by the applicant against such beneficiary is unfulfilled. In practice, a debtor's creditors are often willing to directly levy an attachment on a letter of guarantee. This article outlines letters of guarantee in the Turkish banking sector.
The Communique on Procedures and Principles Regarding Fees to be Collected from Commercial Customers by Banks was published on 10 February 2020. The communique aims to determine the type, quality and maximum amount or rate of fees to be collected for providing products and services, ensure the accuracy of concepts and terms, prevent overpricing and increase the predictability and transparency of transactions conducted between Turkish banks and their commercial customers.
The Communique on Compliance with Principles and Standards of Interest-Free Banking entered into force in September 2019. The communique aims to regulate the procedures and principles regarding the structures and processes to be established by participation banks and development and investment banks which finance their clients in accordance with the Regulation on Financing Transactions of Banks.
Suretyships are a kind of security commonly used in loan transactions which provide personal security to lenders if a borrower fails to fulfil its payment obligation. The Code of Obligations sets out certain requirements regarding the validity of suretyship agreements and enacting a suretyship agreement by proxy. This article examines these requirements in detail.
The Council of Ministers recently amended Decree 32 on the Protection of the Value of Turkish Currency. The amending decree introduced strict restrictions on foreign currency loans obtained from overseas or in Turkey. The provision of foreign currency indexed loans to legal entities or real persons is now forbidden. However, legal entities which generate no foreign currency income but have credit exposure equal to or above $15 million may obtain foreign currency loans without limitation.
After a 10-month investigation, the Competition Board found by unanimous vote that Mey İçki held a dominant position in the raki (ie, a traditional Turkish spirit) market, had violated Article 6 of Law 4054 and had received an administrative monetary fine for the same strategy in the raki market for the same period. The board held that there was no scope to impose additional administrative monetary fines but accepted Mey İçki's non bis in idem defence.
In June 2020 Law 7246 Amending the Law on the Protection of Competition entered into force and introduced significant changes to Turkish competition law, including with regard to the commitment mechanism. The mechanism aims to address anti-competitive effects in a timely and effective manner and save time and red-tape costs incurred by both the Turkish Competition Authority and undertakings subject to investigation.
In 2018 the Competition Board imposed administrative fines amounting to TL143 million on three retail electricity sales companies (RESCs) and one electricity distribution company for abusing their dominant positions in various markets. In three separate decisions regarding the appeal of the fines, the Ankara 13th Administrative Court rejected all of the claims raised by the RESCs and upheld the board's decision. The decisions may have significant consequences with respect to anti-competitive effects.
The Competition Board recently published its reasoned decision following a preliminary investigation based on allegations that two companies had violated Article 4 of Law 4054 on the Protection of Competition by determining dealers' resale prices, fixing discount rates and limiting the payment methods of their dealers.
The Turkish Grand National Assembly has promulgated the Act on the Prevention of the Financing of Propagation of Weapons of Mass Destruction, which foresees material amendments to the Commercial Code's provisions regarding bearer share certificates. Although these amendments cause transactional friction and restrict shareowners from engaging in unannounced share transfers, money laundering and the financing of terrorism pose a greater threat than these inconveniences.
Boards of directors are the administrative and representative bodies of joint stock companies. This article examines the general duties of directors in Turkey under the Commercial Code and the liability regime for directors, including social security-related liability, tax liabilities and potential exemptions to liability.
The enforceability of share options is one of the most controversial issues in the context of shareholders' agreements. There are a number of widely used solutions to improve the enforceability of share options in this regard, including inserting share options provisions into articles of association, establishing a holding company outside Turkey and inserting a statement on registered share certificates that shares are subject to transfer restrictions.
The COVID-19 pandemic is affecting not only public health, but also global business operations and the economic sector. In light of reports that mergers and acquisitions are being delayed, it is important to determine the impact of COVID-19 on M&A transactions and implement measures to mitigate the risks associated therewith. To that end, this article addresses whether COVID-19 qualifies as force majeure or hardship for contractual purposes and its impact on parties' mutual obligations.
This article examines some of the key considerations for buyers and sellers when entering into an M&A transaction and how best to navigate deal-related risks. For example, in Turkey, M&A deals are generally not subject to regulatory approval. However, depending on the turnovers of the buyer, seller and target, a proposed transaction may be subject to Competition Board approval. Further, M&A deals in some regulated sectors (eg, energy and telecoms) must be approved by the governmental authorities.
A leveraged buyout (LBO) is a term used for a variety of transactions in which buyers (usually private equity firms) use leverage to acquire a company's shares. However, it is impossible to fully mitigate the risk that a target is deemed to provide financial assistance for the purchase of its own shares if the acquirer uses an LBO and the target provides guarantees or securities over its own assets due to a lack of established precedents. This uncertainty means that a diligent analysis is required for each transaction.