Enforcement of Receivables Owed to Foreign Companies in Türkiye Through Execution and Bankruptcy Proceedings

Introduction

Foreign companies with receivables in Türkiye may make use of the enforcement, litigation and interim protection mechanisms provided under Turkish law. The appropriate method for collecting a receivable depends on its legal basis, whether the debtor objects, whether the claim is based on a court judgment or an arbitral award, the debtor's assets, and whether the receivable needs to be secured. In Türkiye, compulsory enforcement is governed mainly by the Enforcement and Bankruptcy Law No. 2004 ("EBL"). For foreign creditors, the Law No. 5718 on International Private and Procedural Law ("IPPL") is also significant, particularly regarding security for costs required from foreign parties and the recognition and enforcement of foreign court judgments. This article examines the principal legal avenues available to foreign companies seeking to collect commercial receivables in Türkiye.

I. Determining the Collection Strategy

Before initiating collection proceedings in Türkiye, the legal position of both the receivable and the debtor should be examined. In particular, the following should be assessed in advance:

• whether the receivable is based on a contract, an invoice, a current account, a cheque or promissory note, a court judgment or an arbitral award;

• whether the receivable is due and payable;

• the applicable limitation period;

• the jurisdiction and arbitration clauses in the contract;

• the governing law;

• the debtor's assets in Türkiye;

• any existing pledges and security interests; and

• whether the foreign creditor is subject to an obligation to provide security for costs.

Where the debtor's ability to pay is limited, a judgment obtained at the end of lengthy litigation may have reduced economic value. Assessing recoverability at the outset of the legal process is therefore particularly important.

II. Enforcement Proceedings Without a Judgment

Payment Order and Objection

For many monetary or security claims that are not based on a court judgment, general enforcement proceedings by way of attachment without a judgment (ilamsız icra takibi) may be available. Once proceedings are duly initiated, a payment order is served on the debtor. In such proceedings, the debtor may object to the debt or to the signature within seven days of service of the payment order. A valid objection filed in time suspends the proceedings. To continue, the creditor must have the objection lifted through one of the methods provided by law.

III. Removal of Objection and Action for Annulment of Objection

Removal of Objection

Where the creditor holds documents of the type specified in the EBL, it may, subject to the statutory conditions, request the enforcement court to remove the debtor's objection (itirazın kaldırılması). Removal of objection is not equivalent to an action for payment before the general courts; it is a remedy specific to enforcement law. It is therefore not available for every receivable or every document.

Action for Annulment of Objection

Under Article 67 of the EBL, the creditor may file an action for annulment of the objection (itirazın iptali) within one year of being notified of the debtor's objection. In this action, the court examines the existence of the receivable under general principles of law. If the creditor succeeds, the enforcement proceedings may continue in line with the judgment.

IV. Mandatory Mediation in Commercial Disputes

In commercial disputes, it should also be assessed whether mandatory mediation applies before an action can be filed. Under Article 5/A of the Turkish Commercial Code, for commercial cases listed in Article 4 of that Code and in other laws whose subject matter is a sum of money, applying to a mediator before filing suit is a precondition for bringing:

• claims for payment,

• claims for damages,

• actions for annulment of objection,

• actions for negative declaratory judgment, and

• actions for restitution.

Accordingly, mandatory mediation must be completed before filing a commercial action for annulment of objection. By contrast, a request for removal of objection before the enforcement court does not qualify as an action and is not assessed within the same scope.

V. Compensation for Bad-Faith Denial of Debt

In an action for annulment of objection, compensation for denial of the debt (icra inkâr tazminatı) may arise if the conditions set out in Article 67 of the EBL are met. The relevant factors include whether the receivable is liquidated, the nature of the debtor's objection and the other statutory conditions. It should therefore not be assumed that every unjustified objection automatically gives rise to such compensation. Where the statutory conditions are met, the court may, upon request, award compensation at no less than the rate prescribed by law.

VI. Enforcement Based on a Judgment

Where a receivable is based on a Turkish court judgment or a document legally treated as equivalent to a judgment, enforcement based on a judgment (ilamlı icra) may be available. In such proceedings, an enforcement order is served on the debtor. Unlike enforcement without a judgment, an ordinary objection to the debt does not automatically suspend the proceedings. Enforcement may be stayed or set aside only under the relevant statutory conditions and procedures.

VII. Receivables Based on Foreign Court Judgments

As a rule, a foreign court judgment cannot be directly enforced in Türkiye. For the judgment to become enforceable, an exequatur (tenfiz) must be obtained under the IPPL and any international conventions to which Türkiye is a party.

Under Article 54 of the IPPL, the court principally examines:

• reciprocity;

• that the judgment was not rendered on a matter falling within the exclusive jurisdiction of the Turkish courts;

• that the judgment is not manifestly contrary to Turkish public policy; and

• that the conditions relating to the right of defence have been met.

In exequatur proceedings, the Turkish court does not act as an appellate body re-examining the merits of the foreign dispute. Once exequatur is granted, the foreign judgment may be enforced in Türkiye in the same manner as a judgment of a Turkish court.

VIII. Recognition and Enforcement of Foreign Arbitral Awards

The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is of central importance for the recognition and enforcement of foreign arbitral awards in Türkiye. Türkiye is a party to the Convention and has made the reciprocity and commercial reservations. For foreign arbitral awards falling within the Convention's scope, its provisions are considered first. Where the Convention does not apply, the IPPL provisions on the enforcement of foreign arbitral awards may be relevant. The grounds for refusing recognition and enforcement are limited. Relevant considerations may include invalidity of the arbitration agreement, violation of the right of defence, the award exceeding the scope of the arbitration agreement, the award not yet being binding on the parties or having been set aside by a competent authority, the dispute not being arbitrable under Turkish law, and violation of public policy.

IX. Precautionary Attachment

Precautionary attachment (ihtiyati haciz) is an interim protective measure for monetary claims, intended to secure the creditor's future compulsory enforcement.

Claims That Are Due

Under Article 257 of the EBL, a creditor of a matured monetary debt that is not secured by a pledge may, if the statutory conditions are met, request the precautionary attachment of the debtor's movable and immovable property, as well as receivables and other rights held by third parties.

Claims Not Yet Due

For a debt that is not yet due, precautionary attachment may be requested only in the special circumstances provided by law. Examples under Article 257 of the EBL include where the debtor has no fixed domicile, or where the debtor is preparing to conceal or remove assets, or to abscond, in order to evade its obligations.

Evidence and the Court's Review

The creditor must present evidence sufficient to satisfy the court of the receivable and, where necessary, of the grounds for precautionary attachment. The court may decide on the request after hearing the debtor or, where circumstances require, without hearing the debtor.

X. Security in Precautionary Attachment

Under Article 259 of the EBL, a creditor requesting precautionary attachment must, as a rule, provide security to cover damages that the debtor and third parties may suffer from an unjustified attachment. The law does not prescribe a fixed percentage for this security. Rates commonly encountered in practice should therefore not be regarded as statutory or as applicable in every case. No security is required where the receivable is based on a court judgment. Where it is based on a document equivalent to a judgment, whether security is required is at the court's discretion.

XI. Time Limits Following Precautionary Attachment

Obtaining a precautionary attachment order does not in itself complete the collection process. The EBL sets short time limits for executing the order and for initiating the main enforcement proceedings or action that complete the attachment. Missing these deadlines may cause the attachment to lose its legal effect, so the process must be monitored carefully even after the order is obtained.

XII. Enforcement by Way of Bankruptcy

Where the debtor is subject to bankruptcy and the statutory conditions are met, enforcement by way of bankruptcy may be available. Bankruptcy proceedings produce different consequences from general attachment proceedings: they form a collective enforcement mechanism affecting all of the debtor's assets and creditors. In assessing whether this route is available, it should first be examined whether the debtor is subject to bankruptcy, as well as the nature of the receivable and the applicable enforcement procedure.

Jurisdiction in Bankruptcy

Special jurisdiction rules under the EBL apply to bankruptcy cases. A clause in a commercial contract conferring jurisdiction on a foreign court therefore does not override the special and mandatory jurisdiction rules on bankruptcy under Turkish law. The effect of jurisdiction or arbitration clauses on the merits of the receivable and on the bankruptcy petition must be assessed separately according to the structure of the specific dispute.

XIII. Security for Costs Required from Foreign Creditors

Article 48 of the IPPL contains a special rule on security for foreign natural and legal persons who bring actions, participate in proceedings or initiate enforcement proceedings in Türkiye. Under this provision, a foreign person may, as a rule, be required to provide security to cover litigation and enforcement costs and any loss suffered by the opposing party. This obligation is not absolute. Under Article 48(2) of the IPPL, a foreign person may be exempted on the basis of reciprocity. International conventions to which Türkiye is a party and which provide for exemption from security must also be taken into account. It should therefore not be concluded as a general rule that "a foreign company initiating enforcement proceedings in Türkiye must always provide security"; the creditor's country of nationality and the applicable international conventions should be checked in each case.

XIV. Receivables in Foreign Currency

When claiming and enforcing foreign currency receivables in Türkiye, the Turkish Code of Obligations, the Enforcement and Bankruptcy Law and the relevant special regulations must be considered together. Whether the contract contains an effective payment clause (requiring payment in the currency itself), the nature of the debt, the date of default, the applicable interest and the way the enforcement request is formulated may all affect the outcome. For foreign currency receivables, the currency to be claimed, the exchange rate date and the interest calculation should therefore be examined separately under the specific contract before proceedings are initiated.

XV. Interest and Default

The starting date and rate of interest may vary depending on the legal nature of the receivable and the contract between the parties. Where a specific due date has been agreed, the debtor may fall into default without the need for a separate notice under the Turkish Code of Obligations and any applicable special provisions. Where no specific due date exists, a notice may be required for default to occur. In commercial matters, the provisions of the Turkish Commercial Code and the Law No. 3095 on Statutory Interest and Default Interest may also need to be considered.

XVI. A Criminal Complaint Is Not a Collection Method

Non-payment of a debt does not, in itself, give rise to criminal liability. Where there are independent acts constituting the elements of fraud, forgery or another offence, criminal law remedies may also come into play. However, a criminal complaint is not an alternative enforcement method for collecting a private law receivable. Recourse to criminal law should be considered only where there are material facts supporting a suspicion of a crime in the specific case.

Conclusion

Collecting receivables owed to foreign companies in Türkiye involves more than initiating enforcement proceedings. The legal basis of the receivable, the likelihood of an objection by the debtor, any existing court judgments or arbitral awards, the debtor's assets, the availability of precautionary attachment, any security obligation applicable to the foreign creditor and the prospects of recovery must all be assessed together. Enforcement strategies differ between receivables based on a court judgment or a foreign judgment granted exequatur, and commercial receivables not yet reduced to a judgment. Particularly where there is a risk that the debtor will dispose of its assets, timely consideration of interim protective measures such as precautionary attachment can be important. For foreign creditors, checking the security obligation under Article 48 of the IPPL and any possible exemption based on reciprocity or international conventions before initiating proceedings helps avoid unnecessary loss of time and cost.

Legal Basis and Sources

• Enforcement and Bankruptcy Law No. 2004

• Law No. 5718 on International Private and Procedural Law

• Turkish Commercial Code No. 6102, Article 5/A

• Turkish Code of Obligations No. 6098

• Law No. 3095 on Statutory Interest and Default Interest

• 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards

• Current guidance of the Ministry of Justice on the obligation of foreign parties to provide security

• Relevant decisions of the Court of Cassation and the Regional Courts of Appeal

This article has been prepared on the basis of legislation in force as of 24 September 2026. It is for general information only and does not constitute legal advice on any specific matter. The creditor's nationality, applicable international conventions, the nature of the receivable and the legal status of the debtor may change the applicable procedure.