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Serap Zuvin Law Offices
Istanbul, Turkey

The Republic of Turkey (“Turkey”) signed the Convention on International Interests in Mobile Equipment (“Convention”) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (“Protocol”), namely, Cape Town Convention (“CTC”) on November 16, 2001 and the Convention and the Protocol came into force in Turkey on December 1, 2011.

How the Claims of the Interest Holders can be Executed at the Execution and Bankruptcy Offices?

Since 2011, substantial steps have been taken forward in Turkey for the implementation of CTC. The last development that has been made in this respect was the introduction of the Omnibus Bill[1] (“Omnibus Bill”) (Torba Yasa), by the enactment of which certain new articles have been introduced into Turkish laws which are aimed to provide a smooth process of implementation of the CTC in Turkey.

The Omnibus Bill clarifies on how claims of the interest holders can be executed at the execution and bankruptcy offices.  In particular, the Additional Article 2 (Ek Madde 2), which has been introduced by the Omnibus Bill to the Law on Execution and Bankruptcy[2] (Icra ve Iflas Kanunu), stipulates that the claims arising from Article 8/1(a) and Article 10/1(a) of the CTC can be raised by the interest holders before the Ankara Execution Offices (Ankara Icra Daireleri) only.

Consequently, (i) the chargees can claim for taking the possession or control of any charged object in the event of default of the chargors pursuant to Article 8/1 (a) of the CTC, and (ii) the conditional sellers or the lessors can claim for the possession or control of any object related to a reservation agreement or a leasing agreement in the event of default of the lessees/debtors pursuant to Article 10/1(a) of the CTC and in any case from the Ankara Execution Offices.

Applying to the Ankara Execution Offices

In the application to be made to the Ankara Execution Offices, the interest holders as referenced in the preceding paragraph must furnish a certificate evidencing their interest, which can only be obtained from the Civil Aviation General Directorate of the Ministry of Transportation, Maritime Affairs and Communication of the Republic of Turkey (“CAD”).

In the event that such a claim is made by an interest holder bearing the certificate as issued by the CAD, then the bailiff will order the transfer of possession or control of the item on which the security has been established in favor of the interest holder, without making any further investigation and the order will be notified to the debtor and will be sent to the CAD by the bailiff.

No Taxes, Duties or Fees will be Charges Other than a Fixed Fee

No taxes, duties or fees will be charged by virtue of above mentioned actions of the bailiff, other than a fixed fee at the amount of ten thousand Turkish Liras (TL 10,000), which is approximately three thousand and four hundred Euros (€3,400) with today’s foreign exchange rates of the Central Bank of the Republic of Turkey and fees and costs shall be borne by the claimant.

What is the Expected Effect of the Amendments?

Consequently, with the enactment of the Omnibus Bill, the authority for the execution of claims of the interest holders has been assigned to only one particular execution office in Turkey, based in Ankara; the capital city of the country, in which the CAD is located as well.

Since the implementation of CTC is quite unique, the Turkish legislator felt the necessity to structure a one stop agency in order to facilitate the process and eliminate most of the arguments made by certain practitioners in the sector that enforcement of CTC terms would not be understood and possible made by the execution authorities in Turkey.

We are happy to observe that the Turkish administrative bodies are enthusiastic to speed up the execution process for the claims of the interest holders arising from the CTC on this particular area.

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[1] Omnibus bill dated February 6, 2014 and numbered 6562, published in the Official Gazette dated February 19, 2014 and numbered 28918.

[2] Law on Execution and Bankruptcy dated June 6, 1932 and numbered 2004 published in the Official Gazette dated June 19, 1932 and numbered 2128.