Canadian Exporters and Unpaid Invoices from Turkish Buyers: CISG, Mediation and Enforcement in Türkiye

This guide sets out which law governs the sale, the mediation step Turkish law requires before a commercial money action, how enforcement starts without a judgment, what happens when the buyer objects, interim attachment, security for costs and the documents to prepare in Canada.

A Canadian manufacturer ships machinery parts to a distributor in Bursa. A software company in Toronto delivers a project to a client in Istanbul. A food exporter in Saskatchewan sells a season’s crop to an importer in Mersin. The goods arrive, the invoice falls due, and payment does not come. The buyer stops answering, disputes quality after the fact, or proposes instalments that never start.

Turkish law gives a foreign seller several ways to collect, and most of them can be run from Canada through a Turkish lawyer. This guide is written for that seller. It covers the Canada-specific points: which law governs the sale, the security a foreign claimant is asked to give, and the documents to prepare in Canada. It also gives a practical order of steps. The general rules on Turkish enforcement are explained in more detail in our guide to debt collection in Türkiye for foreign creditors.

Which law governs a sale from Canada to a Turkish buyer

The CISG is the starting point. According to the UNCITRAL status table, Canada acceded to the United Nations Convention on Contracts for the International Sale of Goods on 23 April 1991, and the Convention entered into force for Canada on 1 May 1992. Canada’s declarations under Article 93 extend it to all ten provinces and three territories. Türkiye acceded on 7 July 2010 and the Convention entered into force for Türkiye on 1 August 2011; the status table records no declaration for Türkiye.

Article 1(1)(a) applies the Convention to contracts of sale of goods between parties whose places of business are in different States when those States are Contracting States. A Canadian seller and a Turkish buyer meet that test. Nationality and the civil or commercial character of the parties do not matter (Article 1(3)). If a party has more than one place of business, the one with the closest relationship to the contract and its performance counts (Article 10(a)).

Three limits matter in practice:

• Services. The Convention does not apply where the preponderant part of the seller’s obligations consists of labour or other services (Article 3(2)). A pure services or software development contract usually falls outside it.
• Excluded sales. Article 2 excludes, among others, goods bought for personal, family or household use (unless the seller neither knew nor ought to have known this), sales by auction, ships and aircraft, and electricity.
• Exclusion by the parties. Article 6 allows the parties to exclude the Convention or vary its provisions. Turkish private international law reserves the provisions of conventions to which Türkiye is a party (MÖHUK Article 1(2)), so a contract that wants a purely domestic regime should say so expressly.

Under the Convention, the buyer must pay the price and take delivery (Article 53), and a party that fails to pay a sum in arrears owes interest on it, without prejudice to damages (Article 78). Article 78 does not fix the rate.

What the CISG leaves to national law. The Convention governs only the formation of the contract and the rights and obligations of seller and buyer; it is not concerned with the validity of the contract or with property in the goods sold (Article 4). Questions within its scope that it does not expressly settle are decided by its general principles and, failing those, by the law applicable under the rules of private international law (Article 7(2)). Before a Turkish court, that is the Turkish Private International and Procedural Law (MÖHUK, Law No. 5718). Article 24(1) applies the law the parties chose. Without a choice, Article 24(4) applies the law most closely connected with the contract, presumed to be the law of the workplace of the party who renders the characteristic performance. In a sale, that party is generally taken to be the seller, which points to the law of the Canadian province where the seller operates, unless the circumstances show a closer connection elsewhere. For the CISG’s own notice periods for defects, see our guide on notice of defect in commercial sales and the CISG.

Mandatory mediation before a commercial money action

Article 4(1) of the Turkish Commercial Code (TTK, Law No. 6102) treats as commercial the disputes arising from matters concerning the commercial enterprises of both parties. A sale between a Canadian company and a Turkish company is normally such a dispute.

For these disputes, Article 5/A(1) TTK provides that in commercial actions whose subject is a sum of money (claims for receivables and compensation, actions for annulment of an objection, negative declaratory actions and restitution actions), having applied to a mediator before filing the action is a condition of the action (dava şartı). The words covering annulment of an objection, negative declaratory and restitution actions were added by Law No. 7445 in 2023. The mediator concludes the file within six weeks of appointment, extendable by the mediator by up to two weeks where necessary (Article 5/A(2)).

The procedure is in the Mediation in Civil Disputes Law (Law No. 6325), which applies to disputes with a foreign element as well (Article 1(2)):

• The application is made to the mediation office of the place where the competent court is located (Article 18/A(4)).
• The parties may attend in person, through their legal representatives or through their lawyers (Article 15(6)). A Canadian company can therefore take part through its Turkish lawyer.
• If the mediation ends because a party missed the first meeting without a valid excuse, that party is named in the final minutes; in the later action it is held responsible for half of the costs the other side would have to pay, even if it wins in whole or in part, and only half of the statutory attorney’s fee is awarded in its favour (Article 18/A(11)).
• From the application to the final minutes, limitation is suspended and forfeiture periods do not run (Article 18/A(15)).
• The claimant must attach the final minutes to the statement of claim. An action filed without any mediation application is dismissed on procedural grounds (Article 18/A(2)).
• Where the parties have an arbitration agreement, the rules on mediation as a condition of the action do not apply (Article 18/A(18)).

If the parties settle, an agreement in a commercial dispute signed by the lawyers and the mediator is deemed a document in the nature of a judgment (ilam niteliğinde belge) without a separate enforceability annotation (Article 18(4)). More on the procedure: mandatory mediation in Turkish law.

Note what Article 5/A does not say. It attaches the requirement to actions. It does not list the enforcement request, so a creditor may start enforcement without a judgment (below) before any mediation. Mediation becomes necessary when the buyer objects and the creditor decides to sue.

Enforcement without a judgment: the payment order (İİK 58, 60, 62, 66)

A Canadian seller does not need a judgment or a signed contract to start enforcement proceedings without a judgment (ilamsız takip) under the Enforcement and Bankruptcy Law (İİK, Law No. 2004). The request is made to an enforcement office in writing, orally or electronically (Article 58(1)). Venue follows the civil procedure rules by analogy (Article 50(1)); for a Turkish company this usually means the enforcement office at its seat (HMK Article 6).

Points in Article 58 that matter for a creditor in Canada:

• Address in Türkiye. A creditor living abroad must give an address in Türkiye; if it does not, the location of the enforcement office is deemed its address (Article 58(2), item 1). In practice the Turkish lawyer’s office address is given.
• Currency. The request states the amount in Turkish lira and, where the claim is in a foreign currency, the date of the exchange rate on which it is claimed, and the interest (Article 58(2), item 3).
• Documents. If the claim rests on a document, the original or copies certified by the creditor, one more than the number of debtors, are deposited with the request (Article 58(3)).

The payment order tells the buyer to pay the debt and costs within seven days, to state separately within the same period if the signature on the underlying document is not its own, and to raise any objection to the debt within that period (Article 60). An objection is made to the enforcement office within seven days of service, in writing or orally; it is notified to the creditor within three days; the debtor must give an address in Türkiye; and a partial objection must state the part and amount or it is treated as not made (Article 62). An objection made in time stops the proceedings (Article 66(1)).

On currency, the Turkish Code of Obligations (TBK, Law No. 6098) provides that a money debt is paid in Turkish currency (Article 99(1)). If another currency was agreed, the debtor may pay in lira at the rate on the payment date unless the contract requires payment in that currency itself (Article 99(2)). If the debt is not paid on the payment date and there is no such clause, the creditor may ask for payment in the currency or in lira at the rate on the due date or the actual payment date (Article 99(3)).

If the buyer gave a cheque or promissory note, a faster route for negotiable instruments may be open: see our guides on promissory notes and bills of exchange and bounced cheques held by foreign holders.

When the buyer objects: removal or annulment (İİK 67, 68)

After an objection, the creditor chooses between two routes, depending on the evidence.

Removal of the objection (itirazın kesin olarak kaldırılması). If the claim rests on a document containing an acknowledgment of debt whose signature is admitted or certified by a notary, or on a receipt or document issued by an official authority within its powers and in due form, the creditor may apply to the enforcement court within six months of service of the objection. If it does not apply within that period, a new enforcement without a judgment cannot be brought (Article 68(1)). An ordinary commercial invoice issued by the seller does not, by itself, meet that description. Where the application succeeds on the merits, the debtor is ordered, on the creditor’s request, to pay compensation of not less than 20 percent; where it is rejected on the merits, the creditor is (Article 68, last paragraph).

Action for annulment of the objection (itirazın iptali). In every other case, the creditor may sue within one year of service of the objection and prove the claim under the general rules (Article 67(1)). This action is in the list of TTK Article 5/A, so mediation comes first. If the court finds the objection unjustified, the debtor is ordered, on the other party’s request, to pay compensation (icra inkâr tazminatı) of not less than 20 percent of the amount awarded; if the creditor’s enforcement is found unjustified and in bad faith, the creditor is ordered to pay compensation on the same basis, calculated on the amount rejected (Article 67(2)). For this compensation, the amount claimed in the enforcement request or in the action is taken as the basis (Article 67, last paragraph). A creditor that misses the one-year period keeps the right to sue on the debt under the general rules (Article 67(5)).

Interim attachment before assets disappear (İİK 257 to 265)

Where the buyer may move assets, interim attachment (ihtiyati haciz) is the tool. A creditor of a matured money debt that is not secured by a pledge may have the debtor’s movables, immovables, receivables and other rights attached, whether held by the debtor or by third parties (Article 257(1)). For a debt not yet due, it is available only if the debtor has no fixed domicile, or, in order to escape its obligations, prepares to hide or remove assets or to flee, flees, or makes fraudulent transactions harming the creditor’s rights (Article 257(2)).

The court must be persuaded by evidence of the claim and, where needed, of the grounds, and it is free to hear or not hear the parties (Article 258). The creditor is liable for all losses of the debtor and third parties if the attachment proves unjustified and must give security; no security is required if the claim rests on a judgment (Article 259). The deadlines are short:

• the creditor must ask the enforcement office to execute the order within ten days of the decision, failing which it lapses (Article 261(1));
• a creditor that obtained it before enforcement or an action must start enforcement or file an action within seven days of execution (Article 264(1)); this period does not run between the mediation application and the final minutes (Law No. 6325, Article 18/A(16));
• if the debtor objects to the payment order, the creditor must apply to the enforcement court or sue within seven days of service of the objection (Article 264(2));
• if the debtor does not object, or the objection is removed or annulled, the interim attachment becomes a definitive attachment by operation of law (Article 264, last paragraph).

A debtor that was not heard before the order may challenge its grounds, the court’s jurisdiction and the security within seven days of the attachment, if it was present, or otherwise of service of the attachment report (Article 265(1)). Details are in our guide to interim attachment for foreign creditors.

Security for costs: MÖHUK Article 48

Article 48(1) MÖHUK provides that foreign natural and legal persons who bring an action, join an action or pursue enforcement proceedings before a Turkish court must give the security the court determines, to cover the costs of the proceedings and of enforcement and the other party’s losses. Under Article 48(2), the court exempts the claimant on the basis of reciprocity.

We have not identified a treaty between Canada and Türkiye that exempts Canadian claimants from this security. A Canadian company should therefore budget for it when it plans an action or enforcement in Türkiye, unless reciprocity can be shown. The amount is set by the court; it is not fixed in the statute. Security for an interim attachment is a separate requirement under İİK Article 259.

Limitation: how long the claim survives

Limitation is governed by the law that applies to the contract itself (MÖHUK Article 8). Where that is Turkish law, every claim is subject to a ten-year limitation period unless the law provides otherwise (TBK Article 146). Article 147 lists the claims subject to five years: periodic performances such as rent and interest; accommodation and restaurant bills; small crafts and small-scale retail sales; claims between partners and a partnership; claims under mandate, commission and agency contracts and brokerage (except commercial brokerage fees); and claims under works contracts (except where the contractor failed in its obligations through gross fault). The price of goods sold by an exporter to a business buyer is not named on that list. A service provider should check whether its contract is a mandate or a works contract, both of which carry five years.

Limitation periods cannot be changed by contract (Article 148) and run from the date the claim falls due (Article 149). They are interrupted when the creditor sues, raises the claim as a defence, applies to an arbitral tribunal, starts enforcement or files with a bankruptcy estate (Article 154(2)), and also when the debtor acknowledges the debt, for example by part payment (Article 154(1)).

The CISG contains no limitation period for the price. If the law of a Canadian province governs the contract under MÖHUK Article 24, its limitation rules apply in place of the Turkish periods (MÖHUK Article 8), and they may be shorter. While the governing law is unclear, the conservative course is to treat the shortest period that could apply as the deadline.

Contract tools for the next shipment

• Choice of court. Where jurisdiction is not exclusive, parties to a dispute with a foreign element arising from obligations may agree that a foreign court will hear it, and the agreement is valid if proven by written evidence. A Turkish court then hears the case only if the foreign court declines jurisdiction or no objection to jurisdiction is raised in Türkiye (MÖHUK Article 47(1)). A clause choosing a court in Ontario or British Columbia may therefore stop an action in Türkiye if the buyer objects to jurisdiction, and the Canadian judgment then needs enforcement here: see enforcing a Canadian court judgment in Türkiye. Merchants may also agree on a Turkish court in writing (HMK Articles 17 and 18(2)).
• Arbitration. Canada acceded to the 1958 New York Convention on 12 May 1986 with a declaration limiting it to commercial relationships under the laws of Canada (except Quebec). Türkiye acceded on 2 July 1992 with declarations that it applies the Convention only to awards made in another contracting state and only to commercial relationships. An award made in Canada is made in another contracting state, so Türkiye’s reciprocity declaration does not exclude it. With an arbitration agreement, the mediation precondition does not apply (Law No. 6325, Article 18/A(18)). Recognition is covered in our guide to enforcing foreign arbitral awards.
• Retention of title. The CISG does not deal with property in the goods (Article 4(b)), and rights in rem in movables are governed by the law of the country where the goods are at the time of the transaction, with the law of destination applying to goods in transit (MÖHUK Article 21(1)-(2)). Under Turkish Civil Code Article 764(1), a reservation of title is valid only when the contract, made in official form, is registered in the special register at the notary of the buyer’s domicile. A clause printed on the invoice does not meet that test; see retention of title in Türkiye.
• Payment security. A documentary letter of credit confirmed by a bank the seller trusts, a bank guarantee or credit insurance shifts the risk away from the buyer’s solvency. If a Turkish bank guarantee is in place, see calling bank guarantee letters in Türkiye.
• Currency clause. If the seller wants to be paid in Canadian or US dollars and not in lira, the contract should require payment in that currency itself (TBK Article 99(2)).
• Acknowledgment of debt. If the buyer proposes a payment plan, ask for the acknowledgment in a deed drawn up by a Turkish notary: such a deed containing an acknowledgment of a money debt is enforced under the rules for judgments (İİK Article 38). An acknowledgment whose signature is only certified by a notary still opens the six-month removal route under Article 68.

Documents to prepare in Canada

• the contract, purchase orders and order confirmations, and the general terms actually accepted;
• commercial invoices, the account statement and proof of any part payments;
• transport and delivery records (bill of lading, air waybill, delivery receipts) and inspection reports;
• emails or letters in which the buyer accepts the debt or proposes instalments;
• a power of attorney for the Turkish lawyer, signed before a notary in Canada and apostilled, with evidence that the signatory may act for the company (for example a certified board resolution or an officer’s certificate). The steps are in our guide to powers of attorney and apostilles from Canada.

Since 11 January 2024 Canadian public documents can be apostilled for use in Türkiye, where the Apostille Convention has applied since 29 September 1985. Alberta, British Columbia, Ontario, Quebec and Saskatchewan issue their own apostilles; Global Affairs Canada issues them for federal documents and for documents issued or notarised in the other provinces and the territories. Documents in English or French are filed with Turkish translations, which in practice are certified by a Turkish notary.

Comparing the routes

A practical sequence for a Canadian exporter

1. Freeze the file. Collect the documents above, calculate the amount in the invoice currency and diary the limitation date.
2. Check for asset flight. If there are signs the buyer is moving assets, apply for interim attachment first and keep the ten-day and seven-day limits.
3. Start enforcement without a judgment. Give the Turkish lawyer’s address as the address in Türkiye and state the exchange-rate date.
4. If the buyer objects, use the six-month removal route where there is a qualifying document; otherwise apply to mediation and then bring the annulment action within the year.
5. Collect. Once the objection is out of the way, attachment follows, including garnishment notices to the buyer’s banks and customers.
6. If assets have been moved, consider an action to set aside fraudulent transfers or the bankruptcy route.

How Lex Lata works with exporters in Canada

Lex Lata acts for foreign creditors in Turkish commercial collection: mediation, enforcement proceedings, interim attachment and actions before the commercial courts. Clients in Canada usually instruct us remotely in English. Documents are reviewed by email, the power of attorney is signed before a notary in Canada and apostilled, and originals follow by courier when the enforcement office or court needs them. The Istanbul working day overlaps with the morning in eastern Canada (Toronto is seven hours behind Istanbul in summer and eight in winter), so calls are usually scheduled for that window. Our commercial debt collection practice page describes the work in general terms. The other guides in the series for people in Canada are listed on our page about a lawyer in Türkiye for people living in Canada, and you can reach us through the contact page.