Registering Cross-Border Commercial Claims in Turkish Bankruptcy & Concordat Estates: Ranking Table Disputes under EBL Arts. 218-235

A foreign creditor registers a claim in a Turkish bankruptcy the same way a Turkish creditor does: by filing it with the bankruptcy office within one month of the announcement of the bankruptcy and depositing the originals or certified copies of its evidence (Article 219 of Enforcement and Bankruptcy Law No. 2004, İcra ve İflas Kanunu, “İİK”). The period may be extended for creditors residing abroad, and a claim filed late is still accepted until the bankruptcy is closed, at the creditor’s cost (Articles 219 and 236). The bankruptcy administration then places the admitted claims in a ranking table (sıra cetveli); a creditor whose claim is rejected or reduced must sue within 15 days of the table’s announcement, or of service on it if it gave an address for service and paid the service advance (Articles 235 and 223/3). If the objection concerns only the rank, not the existence or amount of the claim, there is no lawsuit: it goes to the enforcement court by way of complaint within seven days of learning of the act (Article 235, last paragraph, and Article 16).

In a konkordato the window is shorter: the commissioner invites creditors to file within 15 days of the announcement (Article 299). The sections below take each step in turn, with the provision behind it.

How and when is a claim filed in a Turkish bankruptcy?

Where the estate is liquidated in the ordinary way (adi tasfiye), the bankruptcy office announces the bankruptcy no later than ten days after its decision under Article 208, using the channels in Article 166/2: an internet news site or a nationally distributed newspaper with a circulation above 50,000, together with a newspaper where the debtor has its centre of business and the Trade Registry Gazette. Where there is more than one announcement, the periods run from the last one (Article 219).

The announcement does more than invite claims. Under Article 219 it states the bankrupt’s identity, domicile and the date the bankruptcy opened; calls on creditors, and on anyone asserting ownership of assets in the estate, to register within one month and deposit the originals or certified copies of their evidence; calls on the bankrupt’s own debtors to declare themselves and their debts within the same period, and on anyone holding the bankrupt’s property, in whatever capacity, to place it at the office’s disposal within the same period, their rights over it being preserved; and convenes the first creditors’ meeting within ten days of the announcement.

For a foreign supplier or lender the filing is a documentary exercise. The claim should state principal, interest and currency, and be supported by the contract, the invoices, the delivery records (CMR or bill of lading), the customs documents, the payment records and a statement of account. Foreign-language documents should be filed with Turkish translations, and a creditor acting through counsel needs a power of attorney in a form a Turkish office will accept.

A claim that is not registered in time is not lost. Article 236 accepts it until the bankruptcy is closed, but the late creditor bears the costs caused by the delay and can be required to pay them in advance, has no share in any distribution decided before it applied and, if the administration accepts the claim, the ranking table is corrected and announced again, with the same right to sue under Article 235.

In what order are creditors paid in a Turkish bankruptcy?

Proceeds are distributed by rank, not equally among all creditors. Article 206 starts with collateral: creditors whose claims are secured by a pledge have a preferential right over the sale proceeds of the pledged asset, and duties and taxes levied on specific goods or income, such as customs duty, come after them. The rank of mortgage creditors, and how far a mortgage covers interest and accessories, follow the Civil Code’s rules on real-property pledges.

Claims that are secured but not covered by the collateral, and unsecured claims, are then entered in four ranks (Article 206):

1. First rank: employees’ claims arising from the employment relationship and accrued in the year before the bankruptcy opened, including notice and severance pay, and the notice and severance pay earned when employment ends because of the bankruptcy; employers’ debts to employee welfare funds and similar bodies with legal personality; and family-law maintenance claims payable in money and accrued in the last year before the bankruptcy.
2. Second rank: all claims of persons whose property was left to the debtor’s management by reason of parental authority or guardianship, provided the bankruptcy opens while that relationship continues or within the year after it ends.
3. Third rank: claims declared privileged by their own special laws.
4. Fourth rank: all other, non-privileged claims. This is where an ordinary unsecured trade receivable, an unsecured loan or a contractual penalty normally sits.

When the one-year periods in the first and second ranks are counted, Article 206 leaves out the time spent in konkordato before the bankruptcy (including the moratorium), any period of postponement of bankruptcy, the time a lawsuit over the claim was pending and, where a deceased person’s estate is liquidated under bankruptcy rules, the time between death and the liquidation order. Where ships are sold, the ranking table follows Articles 1389 to 1397 of the Turkish Commercial Code.

For a foreign trade creditor the practical point is simple: an unsecured invoice claim is paid from what is left after the secured creditors and the three privileged ranks.

How do you challenge the ranking table?

The administration delivers the ranking table to the bankruptcy office and announces it in the manner of Article 166/2; creditors whose claims were rejected in whole or in part, or not admitted to the rank they asked for, are also informed directly (Article 234). From that point Article 235 sets the rules:

• Period and court. Those who object to the table are required to sue within 15 days of its announcement, in the commercial court of the place where bankruptcy was declared. The same paragraph, however, preserves Article 223/3: a creditor who, when applying to the estate, gives an address suitable for service and pays an advance for the writing and service costs set in the Ministry of Justice tariff may ask for the administration’s decisions to be served on it, and for that creditor the time limits for challenging them run from the date of service.
• Defendant. If the creditor says its own claim was wrongly rejected or reduced, the action is brought against the estate. If it disputes another creditor’s admitted claim, or the rank given to it, the action is brought against that creditor.
• Procedure. The action is heard under the simple procedure (basit yargılama usulü), which Article 235 itself prescribes.
• What a win produces. Where an action for the deletion of another creditor’s claim succeeds, the share allotted to that claim is paid to the claimant, regardless of rank, up to its own claim and including the costs of the action; anything left over goes to the other creditors under the table.
• Voting at the second meeting. At the claimant’s request, the court decides within fifteen days whether, and to what extent, the claimant may take part in the second creditors’ meeting.
• Rank only. An objection that does not concern the existence or amount of the claim, but only its rank, is not an action: it is brought to the enforcement court by way of complaint, and under Article 16 a complaint is made within seven days of learning of the act.

How is a claim registered in a konkordato?

A konkordato (Article 285 et seq.) is a restructuring, not a liquidation, but it also turns individual claims into a collective process. The court’s temporary moratorium is published in the Trade Registry Gazette and on the Press Advertising Agency’s official announcement portal and has the effects of the final moratorium; the announcement tells creditors that they may object within seven days that there is no ground for a moratorium (Article 288).

The commissioner then invites creditors to file their claims within 15 days of the announcement and posts a copy to creditors whose addresses are known; a creditor who does not file is not admitted to the negotiations on the concordat project unless its claim appears in the debtor’s balance sheet (Article 299). A claim that is not for money, such as delivery of goods or transfer of a flat, is converted by the creditor into a money claim of equal value and notified to the commissioner, although the debtor may undertake to perform in kind with the commissioner’s approval (Article 294).

While the moratorium runs, Article 294 bars new enforcement against the debtor, including collection under Law No. 6183, stops pending proceedings, prevents the execution of provisional injunctions and attachments, and stops the running of limitation and time-bar periods that an enforcement step could interrupt; first-rank privileged claims may still be pursued by attachment. Unless the confirmed project provides otherwise, interest on unsecured claims stops running from the date of the final moratorium.

The project is accepted if signed by more than half of the registered creditors and of the registered claims, or by more than one quarter of the registered creditors holding more than two thirds of the claims (Article 302). Only creditors affected by the project vote; first-rank privileged creditors and the debtor’s spouse, children, parents and siblings are left out of the count, and secured claims count only for the part that the valuation leaves unsecured. Once confirmed, the konkordato binds all claims that arose before the request, or during the moratorium without the commissioner’s permission; that binding effect does not extend to first-rank privileged claims, to secured claims up to the value of the collateral, or to public receivables under Law No. 6183 (Article 308/c).

Buyers of off-plan property meet the same procedure from the other side; their position is set out in Developer Bankruptcy and Konkordato in Türkiye.

What happens if the estate does not pay the claim in full?

Every creditor who has not been paid in full receives a certificate of insufficiency (aciz vesikası) for the unpaid amount, stating whether the bankrupt accepted or disputed the claim; where the bankrupt accepted it, the certificate counts as an instrument of the kind described in Article 68/1 (Article 251). The certificate has the effects set out in Article 143: no interest can be claimed on the amount it records, and the debt becomes time-barred against the debtor twenty years after the certificate is issued. A new enforcement against the bankrupt can be started only once the bankrupt has acquired new assets; if the bankrupt objects that it has not, the enforcement court decides the point under the simple procedure (Article 251).

A filing sequence for a foreign creditor

1. Fix the dates. Diary the date of the last announcement and count one month for filing in a bankruptcy, or fifteen days in a konkordato.
2. Assemble the file. Contract, invoices, delivery and customs documents, payment records and a statement of account, with Turkish translations.
3. File and follow. File through counsel, then watch for the announcement of the ranking table; if you gave an address suitable for service and paid the service advance when filing, the fifteen days under Article 235 run from service on you; otherwise they run from the announcement of the table (Article 223/3).
4. Decide quickly. If the claim is rejected, reduced or ranked lower than claimed, decide within days whether the dispute concerns the claim itself (an action in the commercial court) or its rank alone (a complaint to the enforcement court).
5. Keep the certificate. If the distribution leaves a balance, keep the aciz vesikası and monitor the debtor for newly acquired assets.

Related Practice Areas

• Commercial Debt Collection & Asset Recovery
• Enforcement of Foreign Judgments & Arbitral Awards
• Commercial Fraud & White-Collar Crime
• Commercial Litigation & Arbitration