Erdinç Bozkurt / Associate
What is Precautionary Attachment?
Pursuant to Article 257 of the Enforcement and Bankruptcy Law (EBL), the creditor having a monetary claim may request from the court the temporary seizure of the debtor's assets to ensure the timely payment of the debt and to secure the collectability of the claim. Precautionary attachment is a legal protection mechanism that allows for the temporary seizure of the debtor's assets based on this request.
If the creditor has doubts about the timely performance of the debt, the creditor may request the precautionary attachment of the debtor's assets, either before or after taking legal actions. Subsequently, the creditor files a lawsuit or initiates an enforcement proceeding. If the creditor prevails in the lawsuit or the enforcement proceedings are finalized, the assets that were previously attached are sold by the enforcement office, and the creditor's claim is satisfied[1].
Conditions of Precautionary Attachment
For the creditor to request precautionary attachment from the court, there must first be an existing monetary debt. If the monetary debt is in a foreign currency, when requesting precautionary attachment from the court, the foreign currency should be converted to Turkish lira at the exchange rate of that day, and precautionary attachment should be requested for the equivalent amount in Turkish lira[2].
However, to obtain a precautionary attachment decision, the principal monetary claim must be due and not secured by a pledge. Nevertheless, if the debtor lacks a specific residence or is engaged in suspicious activities such as asset concealment to evade obligations, precautionary attachment may also be requested for claims that have not yet become due.
As for claims secured by a pledge, if it is determined that the pledged asset will not cover the claim, a precautionary attachment may also be requested for the part that is not covered.
Finally, if the creditor requesting precautionary attachment does not have a claim based on a judgment, a security must be deposited. Pursuant to Article 259 of the EBL, if the claim is based on a document with the nature of a judgment, the court will decide whether security is required.
It is not necessary for the judgment on the claim to be finalized to obtain a precautionary attachment decision or to avoid depositing security when obtaining a precautionary attachment decision. With the amendment made to the EBL in 1940, the term “finalized” was removed from the expression “if the claim is based on a finalized judgment, no security will be requested”, making it possible to render a precautionary attachment decision without security even for the judgments not finalized.[3].
The Problem of Precautionary Attachment in Interest Receivables
-What is Interest Receivable?
When the debtor is in default, interest must be paid to the creditor for the unpaid days. Interest receivable is a secondary obligation related to the principal receivable. However, in cases where the judicial proceedings are prolonged, the interest receivable may exceed the amount of the principal receivable.
There is no regulation in the legislation regarding whether a precautionary attachment decision can be rendered for interest receivables.
As such, there is no clarity as to whether a precautionary attachment will also be requested for the interest receivable, which has a secondary nature, when requesting a precautionary attachment. In practice, this situation creates uncertainty, especially in the following two areas:
According to the decision of the 15th Chamber of the Court of Cassation dated 2 November 2015[4], a precautionary attachment decision may also be rendered for interest receivables in precautionary attachment requests based on a judgment. It is emphasized in this decision that a precautionary attachment decision may be issued for the interest receivable, provided that the type and starting date of the interest are clearly stated in the judgment.
However, it should be noted that the precedent of the 15th Civil Chamber of the Court of Cassation stating that “precautionary attachment should also be granted for interest receivable in precautionary attachment requests based on a judgment”. has not led to uniformity in practice. Many courts of first instance reject requests for precautionary attachment for interest receivable.
The application of precautionary attachment to interest receivable in claims that are not based on a judgment may lead to more disputes due to variables such as the type of interest, starting date and the methods of calculation. It is generally not possible for judges to examine these details in cases where a prompt decision, such as a request for precautionary attachment, is required. For this reason, it is not very common for the courts of first instance to render a precautionary attachment decision for interest receivables in claims that are not based on a judgment.
Conclusion
A precautionary attachment decision may be requested for monetary claims that are due and not secured by a pledge or for claims that have not yet become due, provided the conditions specified in Article 257 of the EBL are met. Nevertheless, there is no consensus among the courts of first instance regarding the issuance of precautionary attachment for interest receivables.
Although the decisions of the 15th Chamber of the Court of Cassation regarding precautionary attachment requests based on a judgment indicate that a precautionary attachment decision may be rendered for interest receivable, this precedent is not sufficiently taken into consideration in practice. This results from the lack of a legal framework regarding precautionary attachment request for interest receivables in claims that are not based on a judgment.
[1] KURU, Baki, İstinaf Sistemine Göre Yazılmış İcra ve İflas Hukuku, 6. Baskı, Yetkin Yayınları, 2021 Ankara, p. 355
[2] ÖZEKES, Muhammet, İcra ve İflas Kanunu’nda İhtiyati Hacze İlişkin Değişikliklerin Değerlendirilmesi, Yeditepe Üni. Huk. Fak. D., 2. Sayı, p.106
[3] UYAR, Talih, D.E.Ü. Hukuk Fakültesi Dergisi, Prof. Dr. Şeref ERTAŞ’a Armağan, C-19, Özel Sayı-2017, p. 2604
[4]Decision of the 15th Chamber of Court of Cassation, 2 November 2015, E. 2015/4699 K. 2015/5439.