As part of the measures to combat the COVID-19 pandemic, the time limits (e.g. statute of limitation) in legal proceedings are suspended until April 30, 2020. The General Assembly of the Grand National Assembly of Turkey enacted this measure through a provision added to the Amendments to Certain Laws (“Law“) on March 25, 2020. This legal change aims to prevent the loss of legal rights due to COVID-19.
What Does the Law Say?
According to the Law:
The time limits will start to run the day after the suspension period ends on April 30, 2020 (May 1, 2020). The time limits that expire in 15 days or less as of the suspension period (March 13 or March 22), will end in 15 days as of April 30, 2020.
The following time limits are excluded from the Law’s scope:
Payments made during the suspension period will be accepted and the parties can request that actions in favor of the other party be taken.
If the sales (sale of seized assets) day declared by the enforcement and bankruptcy offices regarding goods or rights correspond to a date during the suspension period, then, after the suspension period ends, the enforcement and bankruptcy offices will announce the sales day without parties’ request in that regard.
The composition periods will continue to bear their legal results on the creditors and debtors throughout the suspension period.
As per the Law, all other measures to be taken, including the postponement of hearings and negotiations, and the related procedures and principles will be determined by the Cabinet for the Court of Cassation and Council of State; by the Supreme Council of Judges and Prosecutors for first instance courts and regional courts of appeal; and by the Ministry of Justice for justice services. Services carried out in the enforcement and bankruptcy offices, penal institutions and notary offices are within the scope of justice services to be determined by the Ministry of Justice.
The Law regulates that if the pandemic continues, the President of the Turkish Republic can extend the suspension period in question once and narrow its scope. This extension period cannot exceed six months.
Moreover, there are no explicit measures taken in relation to arbitration proceedings. Arbitration proceedings are an alternative to court proceedings resulting in a tribunal rendering a final and binding decision, similar to court judgments. In this respect, we believe that, at this stage, concluding that all time limits in arbitration are suspended is not possible. Therefore, we believe that it would be risky to deem this approach de facto. Indeed, this may be of a nature which may cause parties to lose their rights and thus, it may not be appropriate to adopt this approach without having an order from the arbitral tribunal. Furthermore, although there is no clarity, due to the flexible nature of arbitration and its ability to be conducted virtually, depending on the resources that arbitral institutions offer, we believe it would be possible to proceed with the pending arbitration proceedings if the parties and the arbitral tribunals so agree. However, in light of the measures taken against COVID-19, if the parties wish to suspend the proceedings, they can request that the arbitral tribunals temporarily suspend the proceedings considering the procedural orders and timetables agreed during the proceedings. New arbitration proceedings may be initiated by considering the measures that arbitral institutions take against the COVID-19 outbreak.
COVID-19 has substantially affected Turkey and the Turkish litigation practice. Within the scope of the measures taken under the Law, almost all time limitations in legal proceedings, with exceptions, are suspended until April 30, 2020 in order to prevent any right loss. If the pandemic continues, the President of Turkish Republic may extend the suspension period once for not more than six months and narrow the scope of it. We would like to emphasize that time limits are suspended retrospectively from March 13, 2020 or March 22, 2020 depending on the nature of the time limit. Time limits will start to run by the end of the suspension period. However, if a time limit is to expire in 15 days or less as of the initiation of the suspension period, then such time limits will end on May 15, 2020. In addition, for the arbitration proceedings, the parties, together with the arbitral tribunals, may agree on the continuity or suspension of the proceedings for a certain period.