The Justice Commission of the Parliament accepted the Bill on Amendments to the Enforcement and Bankruptcy Code and Other Codes (“Bill“), also known as the Fifth Judicial Package. In line with the enactment of the accepted Bill, discussions began at the General Assembly of the Grand National Assembly of Turkey on Tuesday. With the Bill, significant changes are envisaged regarding the Enforcement and Bankruptcy Code to reduce workload and increase efficiency in enforcement and bankruptcy processes.
Important amendments to the Enforcement and Bankruptcy Code
The amendments that will be made regarding the Enforcement and Bankruptcy Code with the enactment of the aforementioned Bill are as follows:
- Auctions for the sale of seized goods will now be conducted entirely electronically. Auctions will be held without actual participation, through the electronic sales portal integrated into the UYAP (the National Judicial Network Platform), including the parts currently held in auction halls pursuant to the current legislation.
- The period for requesting the sale of movable goods will be increased from six months to one year. According to the current legislation, a sale can be requested within one year of the seizure of immovable properties, while the period for movable properties is within six months of the seizure. With the amendment, the period for requesting the sale of all movable and immovable properties will be one year from the seizure of the property.
- The appraisal of seized goods and the determination of the sales expenses will be carried out according to a tariff. In the current legislation, it is regulated that the enforcement officer who has conducted the seizure will conduct the appraisal of seized property and the determination of the sales expenses. With the amendment, the said transactions will be carried out according to a tariff to be determined by the Ministry of Justice. In this way, the differences in the sales expenses that arise as a result of the sale of similar goods by enforcement offices in different places will cease.
- It will be mandatory to pay the sales expenses in advance with the sale request for the seized property. Pursuant to the amendment, the sales expenses to be determined according to the above-mentioned tariff will have to be deposited in the enforcement case file in advance. Otherwise, if the expenses are not paid within 15 days, it will be decided that the sale request should be deemed not filed.
- Upon request, the debtor may be authorized to consensually sell the seized property. According to the amendment, the debtor may request the authorization for the sale of the seized property within seven days following the service of the appraisal. After the appraisal is finalized, the enforcement director will stop the forced sale transactions and give the debtor a period of 15 days. If the buyer, with whom the debtor has agreed, deposits the determined price to the enforcement case file, the file will be sent to the enforcement court for the approval of the sale. Pursuant to the amendment, the price in a consensual sale will not be less than the sum of either 80% of the appraisal or the preemptive receivables guaranteed by the seized property, whichever is greater, and the sum of the enforcement costs incurred up to this stage.
- At the appeal stage, the authority to decide on the stay of execution will be taken from the regional courts of justice and the Court of Cassation, and given to the enforcement court of the place where the enforcement proceedings took place. Since decisions on a stay of execution currently constitute an unnecessary workload for the regional courts of justice and the Court of Cassation, which require the pursuance of the debtor or its counsel and causes a waste of time, the task of rendering the decisions will now be given to the enforcement court at the place where the enforcement proceedings took place.
- With the decision of the enforcement court on the continuation of the proceedings, goods possessed jointly by the debtor and third parties claiming revendication can be taken into custody. Accordingly, if the third party claiming revendication accepts to act as a sequestrator for the seized property, the property will not be taken into custody. However, in the event that a decision for the continuation of the proceedings is rendered in accordance with the first paragraph of Article 97 of the Enforcement and Bankruptcy Code, the goods can be taken into custody, thus establishing a balance between the interests of the relevant parties and preventing grievances arising from the immediate custody of such goods.
- It will be mandatory to carry out the transactions for the custody, appraisal and the sale request together for motor vehicles registered on the registry.
The planned changes serve to eliminate the deficiencies in the current system and practice and to expand the use of technology in enforcement and bankruptcy law proceedings. In particular, the change, which envisages the electronic sale of seized goods, is an example of the intelligent integration of technology into judicial processes. In addition, it contributes to reducing travel and physical contact in terms of enforcement and bankruptcy proceedings during the COVID-19 pandemic.