Introduction
Unpaid commercial receivables arising from the sale of goods, provision of services or other contractual relationships may directly affect a company’s cash flow and business continuity.
Where an invoice, agreement, purchase order or commercial correspondence demonstrates that a payment has become due but remains unpaid, the creditor may consider initiating enforcement proceedings or filing a commercial receivables lawsuit.
However, recovering a commercial debt involves more than simply submitting a petition to the court. The legal basis of the claim must be identified correctly, the relevant evidence must be preserved, mandatory mediation must be completed where applicable, and the competent court must be determined.
This guide explains the principal stages of commercial receivables litigation under Turkish law and the key matters that should be considered before commencing proceedings.
What Is a Commercial Receivables Lawsuit?
A commercial receivables lawsuit is a legal action filed to recover an unpaid monetary claim arising from a commercial transaction or a legal relationship connected with a commercial enterprise.
Commercial receivables commonly arise from:
Sale of goods agreements
Service agreements
Distributorship and dealership relationships
Supply agreements
Construction and works contracts
Transportation and logistics agreements
Current account relationships
Other transactions between commercial enterprises
Whether a dispute qualifies as a commercial case must be assessed by considering the legal status of the parties and the connection between the dispute and their commercial businesses.
What Should Be Reviewed Before Filing a Lawsuit?
Before proceedings are initiated, the legal and commercial basis of the claim should be examined in detail.
The following matters should be reviewed:
The agreement or transaction from which the claim arises
Whether the payment has become due
Whether invoices and delivery documents are available
Whether any payment has already been made
Whether set-off or a current account relationship exists
Whether the claim is time-barred
Whether the agreement contains a jurisdiction or arbitration clause
The appropriate legal strategy should be determined following this review.
Is Mediation Mandatory?
For commercial claims concerning the payment of a specific amount of money, mandatory mediation may be a prerequisite before filing a lawsuit.
Where mandatory mediation applies, filing a lawsuit without first completing the mediation process may result in the claim being dismissed on procedural grounds.
During mediation, the parties may agree on:
Full payment of the debt
Payment by instalments
A negotiated reduction
Provision of security
A revised payment schedule
If no settlement is reached, a final mediation report is issued and court proceedings may then be initiated.
Which Court Has Jurisdiction?
Where the dispute qualifies as a commercial case, the competent court is generally the Commercial Court of First Instance.
However, the competent court must be determined by considering:
The legal status of the parties
The source of the dispute
The nature of the agreement
Any specific statutory provisions
In locations where no separate Commercial Court of First Instance exists, the Civil Court of First Instance may hear the case in its capacity as a commercial court.
How Is Territorial Jurisdiction Determined?
Territorial jurisdiction may vary depending on the circumstances of the dispute.
Relevant factors may include:
The defendant’s place of residence or registered office
The place of performance of the agreement
A valid jurisdiction agreement between the parties
Specific jurisdiction rules applicable to the dispute
Merchants and public legal entities may enter into jurisdiction agreements, provided that the statutory requirements are satisfied.
How Can a Commercial Receivable Be Proven?
Evidence plays a decisive role in commercial receivables litigation.
Depending on the dispute, relevant evidence may include:
Written agreements
Invoices
Delivery notes and acceptance documents
Purchase orders
Current account records
Bank statements and payment records
Email correspondence
WhatsApp and other digital communications
Commercial books and accounting records
Notices and formal demands
Witness statements
Expert examinations
The evidential value of commercial books depends on whether they have been maintained in accordance with the applicable rules and whether they are consistent with the other party’s records.
Is an Invoice Alone Sufficient Evidence?
An invoice may constitute important evidence of the commercial relationship and the amount claimed. However, it may not be sufficient in every case.
The court may also consider:
Whether the invoice was delivered to the other party
Whether an objection was raised against its contents
Whether the goods or services were actually provided
Whether delivery or performance is supported by additional documents
Agreements, delivery records, purchase orders and payment correspondence should therefore be retained together with the invoice.
Enforcement Proceedings or a Lawsuit?
Depending on the circumstances, the creditor may consider commencing enforcement proceedings or filing a receivables lawsuit.
Enforcement Proceedings
If the debtor does not object, the recovery process may progress more quickly.
If the debtor objects, additional proceedings may be required to remove or annul the objection.
Receivables Lawsuit
A lawsuit may be preferable where there is a substantial dispute concerning the existence, amount or legal basis of the claim.
The appropriate method should be selected by considering the available evidence, the debtor’s financial position, the amount of the claim and the applicable limitation periods.
Can Interest Be Claimed?
Depending on the nature of the commercial receivable, default interest or contractual interest may be claimed.
The following factors should be examined:
The due date of the debt
The date on which the debtor entered into default
Any contractual interest clause
Whether the transaction qualifies as a commercial transaction
Any special legislation applicable to the claim
The correct determination of the interest rate and commencement date may significantly affect the amount awarded.
Can a Provisional Attachment Be Requested?
Where recovery of a monetary claim is at risk, a provisional attachment may be requested if the statutory conditions are satisfied.
A provisional attachment does not itself result in final recovery. It is a temporary protective measure intended to secure the creditor’s prospective right of recovery.
The court may assess whether the claim has been demonstrated on a prima facie basis and whether security must be provided.
How Long Does the Lawsuit Take?
The duration of proceedings depends on several factors, including:
The complexity of the dispute
The number and nature of the documents
Whether an expert examination is required
Objections raised by the parties
The workload of the court
It is therefore not possible to provide a fixed duration for every commercial receivables case.
Common Mistakes
Common mistakes in commercial debt recovery include:
Failing to execute a written agreement
Failing to document delivery or performance
Not retaining invoices and commercial correspondence
Ignoring mandatory mediation requirements
Filing the case before the wrong court
Incorrectly determining the commencement date of interest
Missing limitation periods
Delaying the assessment of the debtor’s assets
These mistakes may prolong the proceedings or reduce the prospects of successful recovery.
Conclusion
Commercial receivables litigation is an important legal mechanism for companies seeking to recover unpaid amounts arising from goods or services.
A successful recovery strategy requires the legal basis of the claim to be identified correctly, the evidence to be prepared comprehensively, mandatory mediation to be completed where applicable and the competent court to be determined accurately.
Documenting commercial agreements, delivery procedures and payment obligations from the outset may considerably strengthen the creditor’s position if a dispute subsequently arises.
Frequently Asked Questions
Is mediation mandatory before filing a commercial receivables lawsuit?
Where the claim concerns the payment of a specific amount of money and falls within the statutory scope of mandatory mediation, mediation must be completed before proceedings are initiated.
Which court hears commercial receivables cases?
Where the dispute qualifies as a commercial case, the Commercial Court of First Instance is generally competent. Any specific jurisdiction rules applicable to the case must also be examined.
Is an invoice sufficient evidence?
An invoice is important evidence, but it may need to be supported by agreements, delivery documents, purchase orders and commercial correspondence.
Can enforcement proceedings be initiated directly?
Depending on the nature of the claim, enforcement proceedings may be initiated. If the debtor objects, a lawsuit or another legal remedy may subsequently be required.
Can interest be claimed?
Interest may be claimed depending on the nature of the receivable, the default date and the contractual provisions. The applicable type and rate of interest must be assessed in each individual case.
This publication is intended solely for general informational purposes and does not constitute legal advice.
