Unpaid Invoices From Turkish Buyers: A Recovery Guide for UK Exporters

This guide explains when the CISG still governs the sale although the UK has not joined it, which law a Turkish court applies, what an English law clause, a London award or a UK judgment achieves in Türkiye, and how Turkish enforcement, mediation, attachment and concordat rules work for the seller.

A steel products supplier in Sheffield has sold bar and plate to a manufacturer in Bursa for three years on 60-day terms. The last four invoices, all in pounds sterling, add up to GBP 140,000. The buyer answered the first reminders and then went quiet. It still runs its factory, banks in Türkiye and sells to customers there. The supplier’s finance director wants to know what can be done in Türkiye, and in what order.

The readers we have in mind are manufacturers, distributors and wholesalers in the United Kingdom, their credit controllers and the solicitors who advise them. It starts with a point specific to UK sellers: the United Kingdom is not a party to the UN Convention on Contracts for the International Sale of Goods (CISG), which Türkiye has applied since 1 August 2011. It then covers the law a Turkish court applies, what a clause choosing English law, the English courts or London arbitration achieves in Türkiye, the Turkish recovery steps, and two events that change the plan: a buyer that disputes a shipment and a buyer that applies for concordat. Other guides in the same series cover related Turkish matters for people and companies in the United Kingdom.

Why the CISG question looks different for a UK seller

Türkiye acceded to the CISG on 7 July 2010, the Convention entered into force for it on 1 August 2011, and no declarations are recorded for Türkiye. The United Kingdom does not appear among the Contracting States. That matters because Article 1(1) opens two separate routes into the Convention for a sale between parties whose places of business are in different States:

• route (a): when both States are Contracting States;
• route (b): when the rules of private international law lead to the application of the law of a Contracting State.

A seller in Sheffield and a buyer in Bursa cannot use route (a). Route (b) remains open. Article 95 allows a State to declare that it will not be bound by Article 1(1)(b); Türkiye has made no such declaration. The outcome before a Turkish court therefore turns on where the Turkish conflict rules point. If they point to Turkish law, the CISG governs the sale, unless the parties have excluded it (Article 6). If they point to the law of England and Wales, Scotland or Northern Ireland, it does not, because that is not the law of a Contracting State. The Turkish Private International and Procedural Law Act (MÖHUK, Law No. 5718) leaves the provisions of conventions to which Türkiye is a party unaffected (Article 1(2)).

Two further points come straight from the text of the Convention. First, it is the place of business that counts: the nationality of the parties is not taken into consideration (Article 1(3)), and where a party has more than one place of business, the relevant one is the place with the closest relationship to the contract and its performance (Article 10(a)). Where the seller is a subsidiary of a UK group with its own place of business in a Contracting State, route (a) can apply. Second, the parties may exclude the Convention or vary the effect of its provisions (Article 6). Read the version of your terms and conditions that the buyer actually accepted before drawing any conclusion.

Which law a Turkish court applies: MÖHUK Article 24 and the three UK legal systems

MÖHUK Article 24 sets the order for contractual obligations:

• The parties’ choice. The contract is governed by the law the parties chose expressly. A choice that can be understood without doubt from the terms of the contract or from the circumstances is also valid (Article 24(1)). The chosen law may cover the whole contract or only part of it (Article 24(2)).
• A choice made later. The parties may make or change a choice of law at any time; a choice made after the contract was concluded is valid with retroactive effect, without prejudice to the rights of third parties (Article 24(3)). A seller and a buyer can still agree on the governing law after a dispute has begun.
• No choice. The contract is governed by the law most closely connected with it. For contracts concluded in the course of commercial or professional activity, that law is taken to be the law at the place of business of the party owing the characteristic performance; if it has no place of business, the law of its domicile; if it has several, the law of the place of business most closely connected with the contract. Where all the circumstances show a closer connection with another law, the contract is governed by that law (Article 24(4)). The statute does not say who owes the characteristic performance; in a sale of goods, Turkish legal writing generally treats the seller as that party.

The UK has three legal systems, and a clause that refers to “UK law” does not say which of them it means. MÖHUK Article 2(5) answers the question for a Turkish court: where the State whose law applies has two or more territorial units with different legal systems, that State’s own law determines which unit’s law applies, and if that law has no decisive rule, the law of the unit most closely connected with the dispute applies. A clause naming one system, such as “the law of England and Wales” or “Scots law”, avoids the point.

When English, Scots or Northern Irish law applies, the Turkish judge applies it of the court’s own motion and may ask the parties for help in establishing its content (MÖHUK Article 2(1)). If the provisions relevant to the case cannot be established despite all research, Turkish law applies (Article 2(2)). A UK seller that relies on its own law should be ready to supply that content, for example through an opinion from a lawyer qualified in the relevant UK jurisdiction.

How a court in the UK would decide the same questions is a matter for a lawyer qualified there. This guide deals with Turkish courts and Turkish enforcement offices.

English courts, London arbitration and a UK judgment

A clause giving jurisdiction to the English courts. Under MÖHUK Article 47(1), where jurisdiction is not exclusive under Turkish law, the parties to a contractual dispute with a foreign element may agree that a foreign court will hear it. The agreement is valid if it is proved by written evidence, and the action is then heard by the competent Turkish court only if the foreign court declines jurisdiction or no objection to jurisdiction is raised before the Turkish court. Article 47(2) adds that the jurisdiction set by Articles 44 to 46 cannot be removed by agreement. In a collection file, the buyer can raise your clause when you sue in Türkiye.

Suing in the UK first. A seller may prefer to issue a claim form in the High Court or a county court in England and Wales, or to sue in the Court of Session or a sheriff court in Scotland. The documents then have to be served on the buyer in Türkiye, and Türkiye has declared its opposition to the methods of service in Article 10 of the Hague Service Convention, which include sending documents by post. Our guide on serving UK court documents and taking evidence in Türkiye sets out the routes.

A UK judgment. No treaty between the UK and Türkiye provides for the recognition and enforcement of civil and commercial judgments in general; child-protection measures and child-support decisions can fall under the 1996 and 2007 Hague conventions instead (MÖHUK Article 1(2)). The convention regarding legal proceedings in civil and commercial matters, signed in Ankara on 28 November 1931, covers service of documents, letters of request for evidence, security for costs and legal aid, and the enforcement of certain costs orders only. A UK judgment that is final under the law of the place where it was given can be enforced in Türkiye only after a Turkish court grants an enforcement decision (MÖHUK Article 50(1)), and reciprocity is one of the conditions (Article 54(1)(a)). The UK is a party to the Hague Choice of Court Convention of 2005 and the Hague Judgments Convention of 2019; Türkiye is a party to neither, so neither applies between the two countries. Our guide on enforcing a UK court judgment in Türkiye covers the conditions and the procedure.

London or Edinburgh arbitration. The 1958 New York Convention has been in force for the UK since 23 December 1975 and for Türkiye since 30 September 1992. Both made the reciprocity declaration allowed by Article I(3), applying the Convention only to awards made in the territory of another Contracting State; Türkiye also applies it only to differences arising out of legal relationships considered commercial under its national law. An award made in London or Edinburgh is made in the territory of a Contracting State. Article IV asks the applicant to file the award, as a duly authenticated original or a duly certified copy, and the arbitration agreement, as the original or a duly certified copy, each translated into Turkish with the translation certified by an official or sworn translator or by a diplomatic or consular agent. Article V lists the only grounds on which enforcement may be refused. The application goes to the civil court of first instance at the place the parties agreed in writing; failing that, at the place in Türkiye of the losing party’s domicile, failing that its residence, failing that the place of its assets that can be enforced against (MÖHUK Article 60(2)). Where the parties have an arbitration agreement, the mediation precondition described below does not apply (Law No. 6325, Article 18/A(18)). See our guides on the arbitration objection in Turkish courts and enforcing foreign arbitral awards.

Recovering in Türkiye: the Sheffield file, step by step

For the Sheffield supplier, whose terms contain no arbitration clause, a typical Turkish sequence looks like this.

1. A formal demand. UK credit teams are used to a letter before claim. In a Turkish file, the comparable step is often a notice served through a Turkish notary (ihtarname), which gives a dated record of delivery. Where Turkish domestic law governs the contract, Article 18(3) of the Turkish Commercial Code (TTK, Law No. 6102) provides that notices between merchants putting the other side in default, terminating the contract or rescinding it are made through a notary, by registered letter, by telegram or by registered electronic mail with a secure electronic signature; under Article 21(2), a recipient who does not object to an invoice’s contents within eight days of receiving it is deemed to have accepted them. If the CISG governs, no reminder is needed: the buyer must pay on the date fixed by or determinable from the contract and the Convention, without any request or formality on the seller’s part (CISG Article 59).
2. The enforcement request. Next comes a request to a Turkish enforcement office (icra dairesi) for enforcement without a judgment (ilamsız takip) under the Enforcement and Bankruptcy Law (İİK, Law No. 2004). Article 58(1) allows it to be filed in writing, orally or electronically. It shows the creditor’s Turkish identity number or tax number, if it has one, and a creditor living abroad gives an address in Türkiye; without one, the place of the enforcement office is treated as its address (Article 58(2)(1)). The claim is expressed in Turkish lira together with the interest and the date from which it runs; for a sterling invoice, the request names the date whose exchange rate is used (Article 58(2)(3)). If the claim is based on a document, Article 58(3) requires the original, or a copy certified by the creditor or its representative, to be lodged with the request, with one more copy than the number of debtors. For venue, İİK Article 50 borrows the civil procedure rules by analogy, and under Article 6(1) of the Code of Civil Procedure (HMK, Law No. 6100) the general venue is the defendant’s domicile: Bursa, for this buyer.
3. The payment order. The office then sends the buyer a payment order (ödeme emri). The order gives the buyer seven days to pay the debt and costs, and the same seven days to declare any objection to the debt or to the creditor’s right to enforce (Article 60). Any objection goes to the enforcement office, by petition or orally, and must be notified within seven days of service (Article 62). Under Article 66(1), a timely objection stops the enforcement; after a late one, enforcement continues for the whole claim if the creditor asks.
4. Mediation. TTK Article 4(1) treats an action arising from matters connected with the commercial enterprises of both parties as a commercial case, and TTK Article 5(1) sends it to the commercial court of first instance. For commercial cases whose subject is a sum of money (claims for payment, compensation, annulment of an objection, negative declaratory actions and restitution), Article 5/A(1) makes an application to a mediator before the action a precondition of the action; the current wording, which names actions to annul an objection, negative declaratory actions and restitution, comes from Law No. 7445 of 2023. Article 5/A(2) gives the mediator six weeks from appointment, which the mediator may extend by no more than two weeks in compelling cases. The application is made to the mediation office where the competent court sits (Mediation Law, Law No. 6325, Article 18/A(4)), and a UK company can attend through its Turkish lawyer, since the parties may take part in person, through legal representatives or through lawyers (Article 15(6)). Between the application and the final report, the limitation period stops and no forfeiture period runs (Article 18/A(15)). A claimant that skips this step sees its action dismissed on procedural grounds for lack of a precondition (Article 18/A(2)).
5. The action to annul the objection. The creditor has one year from notification of the objection to sue for its annulment, proving the claim under the general rules (İİK Article 67(1)). Where the objection is held unjustified, the court orders the buyer, at the creditor’s request, to pay appropriate compensation of at least twenty percent of the sum awarded; a creditor whose enforcement proves unjustified and in bad faith is ordered to pay the same on the sum rejected (Article 67(2)). The last paragraph of Article 67 bases that compensation on what was claimed in the enforcement request or in the action. Missing the year does not end the claim: Article 67(5) preserves the right to sue for it under the general rules.
6. Where the buyer has signed an acknowledgment. Article 68(1) offers a shorter route if the enforcement rests on a document containing an acknowledgment of debt whose signature is admitted or certified by a notary, or on a receipt or document that an official authority issued within its powers and in due form. The creditor then asks the enforcement court to remove the objection within six months of being notified of it; once the six months have passed without such a request, a new enforcement without judgment is not possible. An invoice the seller issued itself does not meet that description. If the buyer offers a payment plan, consider a notarial deed drawn up by a Turkish notary containing an acknowledgment of the money debt, which İİK Article 38 subjects to the rules for enforcing judgments.

A settlement reached in mediation in a commercial dispute, if the lawyers and the mediator sign it together, is treated as a document having the nature of a judgment without any annotation of enforceability, unless a statute makes that annotation mandatory (Law No. 6325, Article 18(4)).

Sterling, interest and security for costs

Currency. Where Turkish law governs the payment obligation, Article 99 of the Turkish Code of Obligations (TBK, Law No. 6098) applies. A money debt is paid in the national currency (Article 99(1)). If payment in another currency was agreed and the contract does not call for payment in that currency itself (“aynen ödeme”) or use words to that effect, the debtor may also pay in Turkish lira at the rate of the payment day (Article 99(2)). In the same situation, if the debt is not paid on the due date, the creditor may choose between the foreign currency itself and Turkish lira at the rate of the due date or of the actual payment date (Article 99(3)). Decide which option you claim before the enforcement request names its exchange-rate date.

Interest. Where the CISG governs, a party that fails to pay the price or any other sum in arrears owes interest on it (Article 78), but the Convention fixes no rate. If Turkish law decides the rate, Article 4/a of Law No. 3095 points to the highest interest rate that state banks pay on one-year deposit accounts opened in the same foreign currency, unless the contract provides for a higher contractual or default rate.

Security for costs. MÖHUK Article 48(1) requires foreign individuals and companies that sue, join proceedings or start enforcement in Türkiye to give the security the court fixes for the costs of the proceedings and of enforcement and for the other side’s loss. Article 48(2) adds an exemption, which the court grants on the basis of reciprocity. The 1931 convention addresses the same subject. Its Article 12 reads: “As regards security for costs, orders for the payment of costs and expenses, free judicial assistance and imprisonment for debt, the subjects or citizens of one High Contracting Party shall enjoy in territory of the other High Contracting Party a perfect equality of treatment with the subjects or citizens of that High Contracting Party.” The convention defines British “subjects” in Article 1(4) and does not mention companies. Whether a UK limited company can rely on Article 12 is therefore not answered by the text, and a company should budget for security being ordered.

Freezing the buyer’s assets before judgment

Suppose the Sheffield supplier hears that the Bursa buyer is moving finished stock to a related company. The Turkish remedy is attachment before judgment (ihtiyati haciz), discussed at length in our guide on interim attachment for foreign creditors. In outline:

• Which claims qualify. İİK Article 257(1) gives the remedy to the creditor of a money debt that has fallen due and is not secured by a pledge. The order can reach the debtor’s movables and immovables, whether in its hands or with third parties, and its receivables and other rights, such as sums its own customers owe it. A debt not yet due qualifies only in the cases Article 257(2) lists: the debtor has no fixed domicile, or, to escape its obligations, it prepares to hide or remove its assets or to flee, flees, or for that purpose carries out fraudulent transactions that harm the creditor’s rights.
• Proof and security. The court must be given evidence that persuades it of the claim and, where relevant, of the grounds for attachment, and it is free to hear the parties or not (Article 258). The supplier must give security and is liable for every loss the buyer and third parties suffer if the attachment proves unjustified; no security is required where the claim rests on a judgment (Article 259).
• Ten days, then seven. An order whose execution is not requested from the enforcement office within ten days of the decision lapses by itself (Article 261). If the order came before any enforcement or action, the supplier then has seven days, from the attachment or, where it was carried out in the supplier’s absence, from service of the attachment report, to file an enforcement request or sue (Article 264(1)). Article 18/A(16) of the Mediation Law stops that period for filing an action from running between the mediation application and the final report.
• The buyer’s answer. A buyer that was not heard may challenge the grounds, the court’s jurisdiction and the security before the court within seven days, counted from the attachment if it took place in the buyer’s presence and otherwise from service of the report (Article 265(1)).
• Conversion. If the buyer does not object to the payment order in time, or its objection is finally removed by the enforcement court or annulled by the court, the interim attachment becomes an executive attachment by itself (Article 264, last paragraph).

A disputed last shipment: a Scottish whisky distributor

A whisky distributor in Glasgow supplies an importer in Istanbul under a two-year agreement that chooses Scots law. The importer has paid for every shipment except the last, which it says arrived with damaged cases and several pallets short. It now holds back payment for an earlier invoice as well.

The choice of Scots law decides the first question. MÖHUK Article 24(1) gives effect to it, Scots law is not the law of a Contracting State, and the CISG does not govern the sale. Whether the importer complained in time and what it can withhold are questions of Scots law, which the Turkish court applies with the parties’ help (MÖHUK Article 2(1)). Had Article 24 led to Turkish law instead, and had the parties not excluded the Convention, the CISG would apply: the buyer must examine the goods within as short a period as is practicable, with examination deferred until arrival where the contract involves carriage (Article 38(1) and (2)), and it loses the right to rely on a lack of conformity if it does not give notice specifying its nature within a reasonable time after it discovered it or ought to have discovered it (Article 39(1)), and in any event within two years of actual handover, unless that limit is inconsistent with a contractual guarantee period (Article 39(2)). For the Turkish domestic rules on a merchant buyer’s notice of defects, see our guide on notice of defect in commercial sales.

The enforcement rules help to separate the undisputed money from the disputed shipment. Article 62 of the İİK requires a buyer that disputes only part of the debt to identify that part and its amount clearly; an objection that does not do so is treated as not having been made. Where the buyer objects to part of the debt only, enforcement continues for the amount it accepted (Article 66(1)). Article 62 does not require reasons for an objection to the whole debt, so the importer may still object to everything, and the file then stops until the objection is annulled or removed.

Much of the evidence in such a file sits with the seller: the CMR consignment notes with any remarks made on delivery, loading photographs and seal numbers, the delivery note signed in Istanbul, the importer’s emails about the shipment and any survey report.

A Welsh machinery maker and a buyer in concordat

A maker of packaging machinery in south Wales installed two lines at a food producer near Izmir. A final instalment of GBP 95,000 is outstanding, and the Welsh company also ships spare parts every month. News then arrives from Izmir: the buyer has filed a concordat application (konkordato) at the commercial court. İİK Article 285(1) opens concordat to any debtor that cannot pay debts that have fallen due, or is at risk of being unable to pay them on time, so that it can pay with extra time or a reduction, or escape a likely bankruptcy. The procedure as a whole is set out in our page on concordat in Türkiye. The Welsh supplier should focus on the following.

• Timetable. The court grants a temporary respite once the documents are complete. It lasts three months; the court may add up to two more, and the total may not exceed five months (Article 287). Article 288(1) gives the temporary respite the same effects as the definitive one. Creditors who say that no situation calls for a respite have a firm period of seven days from the announcement to object in writing, with their evidence (Article 288(2)).
• Collection stops. While a respite runs, no enforcement may be started against the buyer, files already open stop, interim injunctions and attachment orders are not executed, and limitation and forfeiture periods that an enforcement step could interrupt do not run (Article 294(1)). From the date of the definitive respite, interest stops running on unsecured claims unless the approved project says otherwise (Article 294(3)).
• The fifteen-day declaration. Watch for the commissioner’s announcement. It invites creditors to declare their claims within fifteen days of its date, and a creditor that does not declare is kept out of the negotiations on the concordat project unless its claim is recorded in the balance sheet (Article 299). Our guide on proof of debt in bankruptcy and concordat explains how to declare a claim and how to challenge the ranking.
• The spare-parts contract. Article 296(1) keeps alive the contracts that matter for the continuation of the debtor’s business. A clause in the Welsh terms that makes a concordat application a breach, a ground for termination or an acceleration event does not apply, the supplier cannot end the contract because the buyer applied, and during the temporary and definitive respites both sides keep performing what they owe under it.
• What the concordat binds. The concordat becomes binding on approval, unless the approved project ties this to the approval decision becoming final. It then binds every claim that arose before the request and every claim that arose during the respite without the commissioner’s permission, but not first-rank privileged claims, secured claims up to the value of the collateral, or public receivables covered by Law No. 6183 (Article 308/c). Spare parts sold on credit with the commissioner’s permission after the temporary respite decision are treated differently: in an ordinary concordat, those debts stay outside the concordat terms and can be enforced during the respite if the buyer defaults (Article 308/c(4)).

The Welsh company’s standard terms contain a retention of title clause. Do not assume it protects the machines in Türkiye. The CISG does not deal with the effect of the contract on the property in the goods sold (Article 4(b)). Under MÖHUK Article 21, ownership and other rights in rem over movables are governed by the law of the country where the goods are at the time of the transaction, rights over goods in transit by the law of the destination, and rights not yet acquired when goods move by the law of the country where they last are. Those rules can lead to Turkish law for machinery installed near Izmir, and Article 764(1) of the Turkish Civil Code (TMK, Law No. 4721) makes a retention of title clause valid only once the contract, made in official form, is entered in the special register at the notary of the buyer’s domicile.

Turkish deadlines a UK seller should diarise

What to gather in the UK before instructing a Turkish lawyer

• the signed contract or framework agreement, purchase orders, order acknowledgments and the version of your standard terms the buyer received, with evidence of how they became part of the contract (this decides the law, the forum and whether the CISG applies);
• sterling invoices with the customer’s statement of account, and bank statements showing what the buyer has paid;
• transport records: CMR consignment notes, bills of lading or air waybills, delivery notes signed on arrival;
• the buyer’s own words: emails, letters or messaging-app chats accepting the balance, promising to pay or complaining about the goods;
• for the company, evidence of who may sign on its behalf, such as an up-to-date Companies House extract and a board resolution, prepared for apostille together with the power of attorney.

Under HMK Article 223, a party relying on a document in a foreign language must file a translation with it, and the court may call for an official translation of its own motion or at the other side’s request. In practice the Turkish translations are often made in Türkiye and certified there by a notary.

Signing the authority in the UK and working across two time zones

The Turkish lawyer who runs the file needs a power of attorney from the company. It can be signed before a notary public in the UK and then apostilled by the FCDO Legalisation Office. Gov.uk explains that documents other than official UK documents can be legalised as long as they have been certified by a UK public official, such as a UK notary or solicitor. Both countries are parties to the Apostille Convention, the UK since 24 January 1965 and Türkiye since 29 September 1985, so the apostille takes the place of consular legalisation. Our guide to a power of attorney and apostille from the UK for Türkiye compares this route with signing at a Turkish mission; Türkiye has an embassy in London and consulates general in London, Edinburgh and Manchester.

The scope of that authority matters as much as its form. Under HMK Article 74, a lawyer without express authority may not, among other things, settle, make an arbitration agreement, make or consent to a concordat proposal, apply to alternative dispute resolution, waive the claim or a legal remedy, release the other side or accept its claim, or lift an attachment. A power drafted for a collection file should list each of these acts expressly.

Istanbul is on UTC+3 all year. London is two hours behind Istanbul during British Summer Time and three hours behind in winter, and the gap changes only when UK clocks change on the last Sundays of March and October. UK tax questions about a recovery or a bad-debt write-off are for a UK-qualified adviser.

Lex Lata and recovery files from the UK

Sellers in England, Wales, Scotland and Northern Ireland instruct Lex Lata on the Turkish side of a recovery: mediation and enforcement files, attachment applications, claims in a concordat, notarial notices, and the enforcement of arbitral awards and foreign judgments. Its advice covers Turkish law only; questions of English, Scots or Northern Irish law go to lawyers qualified in that system. The file is run from a distance, with correspondence in English: papers arrive by email, the authority is signed in the UK as described above, and calls fall in the UK morning, when the Istanbul working day is already under way. A general description of this work is on our commercial debt collection practice page, and the guide to debt collection in Türkiye for foreign creditors gives a broader overview of Turkish enforcement. The UK series starts from our page on a lawyer in Türkiye for clients in the UK, and messages reach us through the contact page.