In this article, we will discuss the security deposit obligation for foreign nationals who are going to file a lawsuit in Turkey.
The Private International Law and Procedural Law Act No. 5718 of 12.12.2007 regulates the obligation of foreign natural or legal persons who seek legal remedies through litigation or enforcement in Turkish courts to provide a security money to be determined by the court to cover the costs of the proceedings and follow-up, as well as the damages and losses of the other party, and various exemptions. Article 48 of this Law explains both the obligation to provide security and the exemption based on the principle of reciprocity.
The principle of foreignness of a legal entity is determined in accordance with the place of its administration in its articles of association. If the administrative center is located in a foreign country, the legal entity is considered foreign. If the administrative center is located in Turkey, it is considered a Turkish legal entity.
REQUIREMENTS OF EXEMPTION FROM DEPOSIT AND RECIPROCITY PRINCIPLE
Article 48(2) of the Code of Private International Law and Procedure, which regulates the exemption from security deposit, provides that the court shall exempt the plaintiff, the party to the lawsuit or the party to the enforcement proceeding from the required deposit based on reciprocity principle.
The principle of reciprocity could be explained as the recognition of the same exemption for Turkish citizens in the state where the foreigner participant in the lawsuit or enforcement proceedings is the citizen. According to Turkish private international law, reciprocity can be achieved in three ways: contractually, de jure or de facto. This principle can be seen in detail in the following decision of the Court of Cassation
“A Turkish judge shall exempt a foreign plaintiff, defendant or enforcement procedure from security if there is reciprocity between Turkey and the country of nationality of the foreign plaintiff, defendant or enforcement procedure. Reciprocity may be established by a (bilateral) treaty signed between two states or by an international (multilateral) treaty to which both states are parties, or it may be established by de jure or de facto reciprocity. The 1954 Hague Convention on Civil Procedure, Article 17 of which provides that citizens of a Contracting State who are domiciled in one of the Contracting States and who appear as plaintiffs or interveners before the courts of another State may not be required to provide security on the ground that they are foreigners. Since it is stated that the ship owning company which brought the action before the court of first instance is domiciled in the Marshall Islands, it is to be understood that the court did not carry out any investigation on which to base its judgment as to whether the plaintiff is exempt from providing security.” (12th Civil Chamber 2019/566 E., 2020/714 K.)
SECURITY DEPOSIT AND ITS EXEMPTION IN INTERNATIONAL AGREEMENTS
A bilateral or multilateral agreement between the state of the plaintiff, counterparty, or party to the enforcement proceeding and the state of the plaintiff’s or counterparty’s nationality providing for the waiver of collateral on the basis of contractual reciprocity is required for the waiver of security deposit.
The most far-reaching of these multilateral conventions is Article 17 of the 1954 Hague Convention on Civil Procedure:
“Nationals of a Contracting State domiciled in one of the Contracting States who appear as plaintiffs or interveners before the courts of the other State shall not be required to give any security or deposit on the ground that they are aliens or are not domiciled or resident in that State. The same principle shall apply to any payment required of the plaintiff or intervener to cover court costs. Contracting States shall continue to apply any convention which provides for the exemption of their nationals from the requirement of security or payment of court costs without any requirement of residence”.
This article of the Convention has been interpreted by various experts as covering the exemption to legal persons. In accordance with the principle of reciprocity, the parties to the Convention do not have any collateral obligations without a residence requirement. The Convention applies to more than 45 countries, to which Turkey is a party, and there may be additional protocols between countries as well as changes in the parties to the Convention. For the most accurate information, it would be in your best interest to seek professional advice.
In another convention, according to Article 9 of the European Residence Convention
“1. Where a national of another Contracting Party who appears as a plaintiff or intervener before the courts of a Contracting Party has his domicile or habitual residence in the territory of a Contracting Party, no security or deposit, in whatever form, shall be required, either on account of his status as a foreigner or on account of his lack of domicile or habitual residence in that territory.
The same rule shall apply to any payment required of the plaintiff or intervener to secure court costs.
Judgments for legal costs and other expenses awarded against a plaintiff or defendant who is exempted from security, deposit or payment by virtue of one of the preceding subparagraphs or by virtue of the law of the country in which the action is brought, may, upon request through the diplomatic channel, be enforced by the competent authority in the territory of the other Contracting Party without the payment of fees.
There are more than 10 members of this convention and it is noted that Ireland and the United Kingdom may include different practices within the framework of additional reservations and additional scopes. In addition to multilateral conventions, Turkey has bilateral agreements with more than 45 countries such as Albania, Azerbaijan, Germany, Algeria, Bulgaria and Czech Republic, and separate provisions and situations are regulated for each country. Except for the contracting countries, guarantee obligations and exemptions are also regulated.
STATUS OF STATELESS PERSONS AND REFUGEES
According to article 16 of the Convention relating to the Status of Stateless Persons, to which Turkey is a party, a stateless person may apply to the courts of the States parties to the Convention, is subject to the obligation to guarantee and is treated in the same way as the citizens of the country of residence with regard to exemption.
Refugees enjoy temporary international protection status in the Republic of Turkey, which is a signatory to the 1951 Geneva Convention relating to the Status of Refugees with the condition of geographical limitation. The geographical limitation clause in the Convention covers refugees from outside the member states of the Council of Europe.
Article 16 of the Convention stipulates that refugees may apply to the courts in the territory of any Contracting State in which they are permanently resident, the exemption clause does not require a guarantee requirement for Contracting States, and countries outside the Convention are subject to the principle of reciprocity.
STATUS OF BLUE CARD HOLDERS
Another status for Blue Card holders is regulated by the Turkish Citizenship Law No. 5901, which includes the rights granted to persons who lose their Turkish citizenship by obtaining an exit permit. As stipulated in Article 28, they continue to enjoy the rights granted to Turkish citizens upon presentation of their Blue Cards, with the exception of national security and public service.
EXEMPTION FROM SECURITY DEPOSIT IN SOME LITIGATIONS
The articles of some international treaties provide for exemption depending on the subject matter of the case. For example, if we list what the treaties regulate.
- Convention on International Carriage by Rail: Article 18 of COTIF states that security is not required in contractual civil actions,
- Contract for the Carriage of Goods by Road: According to Article 31 of the CMR, no security is required in cases arising out of carriage covered by the Convention,
- Article 5 of the European Convention on the Recognition and Enforcement of Judgments concerning the Custody of Children and on the Restoration of Custody of Children states that there is no obligation to provide security for measures taken by the State, including court costs and legal fees.
- In family cases, there is no security obligation for civil and administrative proceedings under Article 22 of the Hague Convention on the Civil Aspects of International Child Abduction.
- In addition, under the Convention on the Recognition and Enforcement of Judgments on Maintenance Obligations, the maintenance creditor who receives from such aid in all procedural proceedings relating to recognition or enforcement and no security shall be required.
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Legal Counsel Baran İSTANBULLU
Att. Muhittin Kurnaz
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