Enforcing Foreign B2B Contracts in Turkey: Litigation vs. Arbitration Checklist
Key Takeaways
To enforce a foreign B2B contract in Turkey, you must understand local procedural rules, language requirements, and timelines. Prepare your enforcement strategy before filing a claim to ensure your final award is actionable.
- Arbitration is favored: Turkey signed the New York Convention. International arbitration awards are faster and easier to enforce than foreign court judgments.
- Mandatory mediation: You must complete mediation before filing a formal lawsuit for monetary commercial disputes in Turkey.
- Asset freezes: Pursue interim injunctions (ihtiyati tedbir) or preliminary attachments (ihtiyati haciz) early to prevent Turkish entities from hiding assets.
- Language requirements: Turkish courts operate entirely in Turkish. You need certified, notarized translations for all foreign contracts, emails, and evidence.
Enforcement Strategy Checklist
Enforcing a foreign decision in Turkey involves different steps for court judgments versus arbitral awards. Use this checklist to prepare for enforcement under Turkish law.
Enforcing a Foreign Court Judgment
To execute a judgment from a foreign court against a Turkish company, you must file an enforcement lawsuit (tenfiz) in a Turkish Commercial Court. Note that recognition (tanıma) only validates the legal finality of a foreign decision. Enforcement (tenfiz) grants the executive power needed to seize assets or garnish bank accounts.
- Reciprocity: Confirm a reciprocal enforcement treaty exists. If there is no formal treaty, you can prove de facto reciprocity by demonstrating that the foreign country routinely enforces Turkish court judgments in its own legal system.
- Finality: Obtain official documentation that the foreign judgment is final and no longer subject to ordinary appeals.
- Jurisdiction: Ensure the dispute falls outside the exclusive jurisdiction of Turkish courts (such as local real estate disputes).
- Public policy: Confirm the judgment does not violate Turkish public policy or constitutional rights.
- Authentication: Secure an Apostille for the original court decision and obtain sworn, notarized Turkish translations.
Enforcing an International Arbitration Award
Turkey is a signatory to the 1958 New York Convention. Foreign arbitral awards are recognized and enforced with less friction than foreign court judgments. Under the convention, Turkish courts are strictly prohibited from reviewing the substance or the merits of a foreign arbitral award; they only review procedural compliance.
- Original agreement: Present the signed arbitration agreement or a certified copy.
- Final award: Supply the original, authenticated arbitral award.
- Due process: Show the Turkish party received proper notice of the proceedings and had a fair opportunity to present a defense.
- Arbitrability: Verify the subject matter can be settled by arbitration under Turkish law and does not violate public policy.
- Authentication: Secure an Apostille for the award and provide sworn Turkish translations.
Mandatory Commercial Mediation
Turkey requires mediation for monetary commercial disputes before you can file a lawsuit. Skipping this step results in immediate dismissal.
Under the Turkish Commercial Code, parties must attempt to resolve claims for compensation or receivables through a mediator. When filing a case, the plaintiff must include the final mediation report showing no agreement was reached. The operational framework for this requirement is managed by the Department of Mediation of the Turkish Ministry of Justice.
Foreign companies do not need to be physically present in Turkey for these sessions. Legal representatives with a specially drafted power of attorney can attend on their behalf. If the dispute settles during mediation, the agreement has the same legal weight as a final court judgment.
Securing Asset Freezes
To prevent a Turkish debtor from transferring assets, apply for a preliminary injunction or preliminary attachment. You must show an immediate risk of unrecoverable loss or evidence that the debtor is hiding property.
The process involves the Turkish Commercial Courts:
- File petition: Submit a request detailing the claim and specific assets (bank accounts, real estate, or vehicles) to freeze.
- Prove prima facie case: Provide initial evidence that your claim is likely to succeed.
- Post security deposit: Foreign plaintiffs must deposit a guarantee, usually 10% to 15% of the disputed amount, to cover potential damages to the defendant.
- Execute order: Once granted, you have 10 days to request execution from the bailiff's office. Failing to meet this deadline voids the injunction.
Timelines: Appeals vs. Arbitration
International arbitration is faster than domestic Turkish litigation. Local courts use a multi-tiered appellate system.
| Dispute Resolution Method | First Instance Phase | Appellate Phase | Total Estimated Timeline |
|---|---|---|---|
| Turkish Domestic Court | 1.5 to 2.5 years | Regional Court (1-2 years) + Supreme Court (1-2 years) | 3 to 6+ years |
| International Arbitration | 1 to 2 years | Limited annulment review only | 1 to 2 years |
| Enforcement (Tenfiz) | 6 to 12 months | Appellate review (1-2 years) | 1.5 to 3 years |
Note: Enforcing an arbitration award requires a local procedure, but courts will not review the merits of the case.
Enforcement and Litigation Costs
Litigation in Turkey involves proportional filing fees, document translation costs, and lawyer retainers. Foreign entities must also pay an advance security fee unless exempted by a bilateral treaty.
- Court filing fees: Turkish courts charge a proportional application fee for commercial monetary claims, calculated at 68.31 per mille (around 6.8%) of the total claim. You must pay one-quarter of this fee upfront.
- Translation and notarization: Evidence must be presented in Turkish. Sworn translations and notarization fees range from TRY 500 to TRY 1,000 per page.
- Security deposit: Foreign individuals and legal entities filing a lawsuit or enforcement action in Turkey must deposit a security fee (cautio judicatum solvi), usually 10% to 15% of the claim. Bilateral or multilateral treaties waive this requirement.
- Attorney fees: Legal fees include a baseline retainer set by the local Bar Association. Lawyers often charge a contingency fee of 10% to 15% of the recovered amount.
Misconceptions About Turkish Commercial Law
Misunderstanding Turkish jurisdiction rules leads to dismissed claims and wasted fees.
- Foreign judgments lack automatic validity: A judgment from a foreign court has no legal authority in Turkey. It cannot be used to seize assets until a Turkish court recognizes and enforces it through a formal tenfiz lawsuit.
- English documents are rejected: Turkish courts operate exclusively in Turkish. Every contract, email, invoice, and statement must be translated by a sworn translator and notarized before a judge will review it.
Next Steps
Hire local counsel before initiating legal action abroad to ensure your judgment is enforceable in Turkey. A Turkish commercial lawyer can evaluate reciprocity and calculate recovery costs.
Gather your executed contracts, communications, and proof of the debtor's assets. Contact commercial litigation lawyers in Turkey to map out an enforcement strategy, determine filing costs, and apply for asset freezes before the debtor receives notice.
