05.02.2024

Authors: Sema Çelebi, Öyküm Koruca

It is needed that such temporary legal protection measures are provided to ensure that creditors receive their claims due to the long duration of litigation and enforcement proceedings and the possibility that the debtors may act in bad faith and endanger the purpose of the lawsuit or proceeding in question and thus the creditor's ability to obtain its claims through these proceedings. Hereby, one of these protection measures is the precautionary attachment procedure regulated by Enforcement and Bankruptcy Law No.2004.

1.   Precautionary Attachment Procedure

It is essential that the debtors pay their debts with consent. However, it can be possible that the debtors avoid paying their debts duly and completely, evade their property or transfer it to third parties in order to render the lawsuit or proceedings initiated against them inconclusive and dysfunctional. In such cases, creditors seek the remedies granted to them in the legal order in order to obtain their receivables. The Precautionary Attachment Procedure is one of these remedies. In terms of legal attribution, precautionary attachment is a legal protection that is mostly considered within the enforcement law.

With the precautionary attachment, the possibility of the debtor harming its creditor is eliminated by restricting the debtor’s authority of ownership on its own property, regardless of whether the debtor is in good or bad faith.

Precautionary attachment, which is more comprehensive compared with interim injunctions, can only be related to money and collateral receivables. Within this framework, the law has made a differentiation between the money receivable that is due and undue. A creditor of a money debt that is due and not ensured by a pledge may apply for a precautionary attachment. A precautionary attachment can only be demanded for a debt that is not due if the debtor does not have a definite place of residence, or if the debtor prepares to hide or evade his goods or to escape himself in order to get rid of his obligations, or if he escapes, or if he engages in fraudulent transactions that violate the rights of the creditor for this purpose. The creditor whose intention is to ensure its receivable by using the precautionary attachment may demand a precautionary attachment by applying to the court before filing a lawsuit or commencing an enforcement proceeding, or he may operate the precautionary attachment procedure after filing a lawsuit or commencing an enforcement proceeding.

2.   Competent and Authorized Court

The competent and authorized court shall be determined on a case-by-case basis pursuant to the relevant regulations of Civil Procedure Law No. 6100 regarding the precautionary attachment since there is no regulation in the Enforcement and Bankruptcy Law on this matter. The court where the execution office is located, which is authorized for execution proceedings without judgment, is also authorized for precautionary attachment demands. After filing a lawsuit, the precautionary attachment may be demanded only from the court that examines the lawsuit.

A precautionary attachment demand may also be filed during  arbitration proceedings. In this case, unless otherwise agreed in the arbitration contract, the arbitrator may rule on the precautionary attachment upon the demand of one of the parties. Again, like the precautionary attachment demanded from the court, the decision may be conditioned on the provision of an appropriate guarantee. However, the arbitrator shall not rule on the precautionary attachment decision that is binding for the third parties or that is needed to be fulfilled by the enforcement organs or other official authorities. Because the arbitration contract is a contract that is binding for only its parties and it is not possible to issue binding decisions to third parties who are not parties to the contract.

Pursuant to the Civil Procedure Law, in cases of important grounds that are required to doubt  the impartiality of the judge, parties may demand the recusal of the judge. Since precautionary attachment is one of the urgent matters, even if the judge is recused, the judge to whom the precautionary attachment is demanded will be able to issue a precautionary attachment decision.

3.   Proof and Warranty

Pursuant to Article 258 of the Enforcement and Bankruptcy Law, in order for the court to rule on the precautionary attachment, the creditor must show evidence and prove its claim to the extent that the court can form an opinion about its claim and the reasons for attachment. However, the power of proof here is not complete or substantial proof, but plausible proof.

As it is explained above, since plausible proof is required here, taking into account the possibility that the creditor may not be right, as a rule, pursuant to Article 259 of the Enforcement and Bankruptcy Law guarantee is obtained from the creditor in order to be deducted from the foreseeable damages that will be caused if the creditor is not right. In the same article, the exceptions to the requirement to deposit a guarantee are listed by stipulating that if the receivable is dependent on a judgment, the guarantee will not be required, the finalization of the judgment will not be required for this purpose, and if the receivable is dependent on a document having the characteristics of a certified copy of a judgment, it will be determined by the court whether the guarantee is required or not, and the exceptions to the requirement to deposit a guarantee are listed. Although the courts have discretion in determining the amount and type of guarantee, in practice, it is generally ruled that a guarantee of between 10% and 15% of the receivable must be deposited. The precautionary attachment decision shall only be performed after the guarantee is deposited to the court’s pay desk. In cases such as the finalization of the initiated enforcement proceedings without objection or the debtor's consent to the return of the guarantee, the guarantee may be returned. In addition to that, pursuant to some regulations, some persons and institutions are waived from depositing a guarantee.

4.   The Decision of Precautionary Attachment

If there is a risk of a result that will eliminate the effect of the decision, such as the debtor's evasion or depletion of his property during the time it will take to hear the debtor, a precautionary attachment may be ruled without hearing the debtor. As a matter of fact, this is the prevailing approach in practice. The fact that a precautionary attachment decision can be made without hearing the debtor is due to the fact that the precautionary attachment is an institution that must be operated urgently. For this reason, it will not be possible to interpret it as a complete elimination of the right to be heard. Even in such a case, the right to be heard under Article 27 of the Civil Procedure Law is not waived, but this right is subject to objection and left until after the decision.

For these reasons, when making a precautionary attachment decision, not only the rights of the creditor but also the debtor should be considered, and the balance of interests between the debtor and the creditor should be considered.

The debtor or third parties whose interests are violated by this decision may object to the precautionary attachment decision issued without hearing the debtor. However, if the precautionary attachment decision is issued after the debtor is heard, it is not possible to object to the precautionary attachment afterwards. The objection in question may be related to the grounds for precautionary attachment, authorization or guarantee. An appeal may be filed against this decision regarding the objection. However, it is important to note that the application for appeal does not stop the execution of the precautionary attachment. The objection to the precautionary attachment is subject to a 7 day period of prescription, and the period begins from the date of the execution of the attachment if the precautionary attachment decision is executed in the presence of the debtor, and from the date of notification of the attachment report to the debtor in the case of precautionary attachments made in the absence of the debtor. After summoning the parties upon the objection, the court shall examine the objection. Even if the parties do not attend the hearing without an excuse, the case shall not be suspended; the objection shall be accepted or rejected as a result of the examination on the file.

5.   Complementary Ceremony

Within a period of ten days following the issuance of the precautionary attachment decision, the creditor is obliged to demand the execution of the precautionary attachment from the enforcement office that is in the judicial locality of the court that issued the precautionary attachment decision. Otherwise, the decision is automatically annulled.

Since the precautionary attachment decisions are performed by the enforcement office, it is possible to file a complaint lawsuit against the transaction of the officer who is assigned with the execution of this decision. Although the execution of the precautionary attachment decision is a transaction related to the enforcement law, the precautionary attachment decision cannot be annulled by way of complaint since it is one of the issues that the Enforcement and Bankruptcy Law leaves the solution to the court, and the supervisory authority that accepts the complaint cannot decide to annul the precautionary attachment.

The enforcement offices that are assigned with the execution of precautionary attachment decisions may not confiscate the goods that are not foreseen to be confiscated in the precautionary attachment decision automatically, as they are bound by the decision.

If the creditor has obtained a precautionary attachment decision before the lawsuit or enforcement proceeding, the creditor must file a lawsuit or commence the main enforcement proceeding within 7 days from the notification of the precautionary attachment decision. This is called a complementary ceremony. In the event that the creditor misses these periods stipulated in the law, the precautionary attachment will become invalid. If the debtor does not object to the enforcement proceedings or the court removes or annuls the objection, the precautionary attachment will automatically turn into a finalized attachment, and the sale of the confiscated goods may be demanded. Since the objection does not suspend the execution of the proceedings through the attachment of negotiable instruments, the precautionary attachment automatically turns into a finalized attachment after the expiration of the ten-day payment period following the notification of the payment order.

6.   Compensation for Unlawful Precautionary Attachment

The debtor or third parties who have suffered damage due to an unlawful precautionary attachment may file a lawsuit for damages against the creditor who issued the precautionary attachment decision. Although the conditions of a compensation case are similar to tort liability, no fault is required. In order for the creditor to be held liable for damages, it is not necessary for the creditor to have imposed the precautionary attachment intentionally or in bad faith. Therefore, the fault of the creditor may only bring into question a reduction in compensation. If compensation is ordered as a result of the lawsuit, this compensation will be paid primarily from the guarantee deposited at the time of the demand for precautionary attachment. It is always possible to operate an enforcement proceeding for the compensation amount exceeding the guarantee.

CONCLUSION

1.   A precautionary attachment is the temporary seizure of the debtor's property by court order in order to secure the outcome of an ongoing or upcoming enforcement proceeding regarding a monetary receivable.

2. The creditor of a monetary receivable that is not guaranteed by a pledge and is due may demand a precautionary attachment. In terms of monetary receivables that are not due, a precautionary attachment may be demanded if the debtor does not have a permanent place of residence or is under suspicion of fleeing or engaging in fraudulent transactions.

3. In the event that damage is caused due to the enforcement of an unlawful precautionary attachment decision, a lawsuit for compensation may be filed, and the compensation ordered by the court shall first be paid from the guarantee deposited by the creditor at the time of the precautionary attachment decision.