One of the routes most frequently chosen for the collection of claims is the mechanism of enforcement without a judgment under enforcement and bankruptcy law. On this route the creditor has no need of a court decision; proceedings may be commenced on the strength of a document held by the creditor or of the bare assertion of a claim. In practice these files are most often founded on ordinary written documents bearing a signature.
The fact that an ordinary written document may be made the subject of enforcement without a judgment does not tie the debtor’s hands entirely. The debtor may raise an objection to the signature by asserting that the signature beneath the document is not their own, and with that objection the proceedings are halted. From that stage onwards the creditor can carry the process forward only by applying to the court.
The legal instrument that then comes into play is the action for the provisional removal of the objection, governed by Article 68/a of the Enforcement and Bankruptcy Act No. 2004.
In this briefing note we examine systematically the conditions required for that action, the manner in which the proceedings before the Enforcement Court are conducted, and the legal consequences that may arise for each of the two parties.
Objection to the Signature in Proceedings Founded on an Ordinary Written Document
When one speaks of documents containing an unconditional and unqualified monetary debt, the first that come to mind are the promissory note, the cheque and the bill of exchange. In practice, however, ordinary written documents — drawn up by the parties of their own volition, not possessing the character of a negotiable instrument and merely setting out a particular monetary debt — are also in widespread use.
The Concept of the Ordinary Written Document and Its Legal Character
An ordinary written document is a written instrument of a private character which sets out the debt relationship between the parties, is not subject to requirements of official form, and yet bears a signature. In Turkish law, unlike official deeds, ordinary written documents are drawn up freely by the parties rather than before a notary or an authorised public officer.
The elements a document must display in order to count as an ordinary written document are few:
- It must bear the wet-ink signature of the person assuming the debt
- It must be drawn up in written form
- It must set out an admission of the debt in clear terms (which may be an unconditional and unqualified monetary debt)
Under Art. 199 et seq. of the Code of Civil Procedure No. 6100, ordinary written documents carry the value of written evidence in debt relationships and may be used to prove the assertions advanced by the parties. That said, and unlike negotiable instruments, such documents cannot be made the direct subject of negotiable-instrument proceedings under the Enforcement and Bankruptcy Act. A creditor wishing to collect a claim on an ordinary written document therefore has a single option: enforcement without a judgment, that is, the general attachment route (Example No. 7).
In practice, promissory notes that fail to meet the formal requirements, or cheques lacking a mandatory element, are treated as ordinary written documents once they have lost their validity as negotiable instruments. Although such a document has forfeited its negotiable character, it retains the quality of written evidence and is therefore suitable for proceedings by way of the general attachment route.
Consequences of an Objection to the Signature in Enforcement Without a Judgment
When the creditor commences proceedings by the general attachment route on the strength of an ordinary written document, the enforcement office issues an Example No. 7 payment order and serves it on the debtor. The debtor’s time limit for contesting that payment order is 7 days from service. The objection may be directed to the request for enforcement, to jurisdiction, to interest, to the debt itself and, in particular, to the signature on the document.
An objection to the signature is the debtor’s clear assertion that the signature on the document relied upon in the proceedings is not their own. It is not enough for that objection to be made by a mere declaration of “objection to the debt”; the words I object to the signature must appear expressly in the notice of objection or in the record of it. Otherwise the signature on the document is deemed to have been acknowledged, and it is accepted that what lies before the court is an objection directed to the debt alone.
Where the signature is denied, the picture that emerges is as follows:
- The creditor cannot overcome that objection unless the creditor proves by written evidence that the signature beneath the document belongs to the debtor.
- The proceedings are halted in their entirety and the creditor cannot proceed with attachment measures within the framework of enforcement without a judgment.
- A single route remains open to the creditor for continuing the proceedings: the action for the provisional removal of the objection (Enforcement and Bankruptcy Act, Art. 68/a).
- Recourse to the final removal of the objection is not possible, because under Art. 68 of the Enforcement and Bankruptcy Act an ordinary written document whose signature has been denied no longer counts as a document within the scope of that article.
Conversely, a debtor who has not expressly objected to the signature cannot raise the matter later. The signature cannot be opened to argument in an action for the final removal of the objection; only defences relating to the debt are heard. The possibility remaining to the debtor is to advance the assertion concerning the signature by bringing an action for forgery (an action for a negative declaration) before the general courts.
Conditions Required for Bringing the Action
Where, in enforcement without a judgment commenced on the strength of an ordinary written document, the debtor expressly objects to the signature on the document, the proceedings are halted. From that moment the document forfeits the quality of a “document whose signature has been acknowledged” within the meaning of Art. 68 of the Enforcement and Bankruptcy Act; the creditor accordingly cannot resort to an action for the final removal of the objection.
Two legal routes are available to the creditor in this situation:
- The action for the provisional removal of the objection (Enforcement and Bankruptcy Act, Art. 68/a)
- The action for annulment of the objection under the general provisions
The action for the provisional removal of the objection is a special route which affords the creditor the possibility of proving before the court, by written evidence, that the signature on the document belongs to the debtor, and which allows the proceedings to be continued on a provisional basis.
The Conditions Must Be Satisfied Together
The bringing of an action within the scope of Art. 68/a of the Enforcement and Bankruptcy Act depends upon the following conditions being present together:
- There must be enforcement proceedings without a judgment validly commenced.
- The proceedings must be founded on an ordinary written document and that document must contain an unconditional and unqualified monetary debt.
- The debtor must have expressly objected to the signature on the document within 7 days of service of the payment order.
- The creditor must not have taken the route of an action for annulment of the objection.
- The action must be brought within 6 months of the date on which the objection to the signature was served on the creditor.
Should even one of these conditions be lacking, the court will dismiss the action on procedural grounds.
Note: A creditor who has brought an action for annulment of the objection can no longer bring an action for provisional removal. The two routes have been framed so as to exclude one another.
The Proceedings and the Burden of Proof
The Procedure Applied Before the Enforcement Court
A request for the provisional removal of the objection is examined, under Art. 68/a of the Enforcement and Bankruptcy Act, before the Enforcement Court and within the framework of the simplified procedure. Under that procedure the evidence is assessed in a plainer and swifter manner. The parties are obliged to submit their evidence together with their first pleadings; evidence may be notified later only where good cause exists.
The Debtor’s Duty to Attend the Hearing
Art. 68/a of the Enforcement and Bankruptcy Act places the debtor under a duty to attend the hearing in person. Representation by a lawyer alone does not satisfy that duty.
If the debtor fails to attend the hearing without showing a valid excuse, the court will order that the objection be deemed withdrawn and that the proceedings continue. The purpose of the provision is to ensure that the debtor advances the objection in earnest and to prevent the creditor from suffering harm through arbitrary objections.
Examination of the Signature and the Expert Stage
If the debtor attends the hearing and persists in denying the signature, the court may refer the file to a court-appointed expert in order to establish whether the signature on the document does indeed belong to the debtor.
The following specimen signatures may be taken as the basis of comparison:
- Signatures held by a notary or by official authorities
- Specimens in the civil registry records
- Other signatures of the debtor present in the file
If the expert examination establishes that the signature belongs to the debtor, the court will order the provisional removal of the objection and the continuation of the proceedings.
Relationship with the Action for Forgery and the Preliminary Issue
Where the debtor maintains the assertion that the signature is not their own and a decision has been given against them in the action for provisional removal, the debtor may bring an action for forgery before the general courts alleging that the signature is forged.
The bringing of such an action does not, however, of itself halt the provisional removal process before the Enforcement Court. Conversely, should the action for forgery later be decided in the debtor’s favour, that may furnish the legal ground for bringing the proceedings to an end and, where payment has been made without justification, for bringing an action for restitution.
Sanctions and Compensation
This action does not merely produce a result concerning the continuation of the proceedings; it also carries penal and financial sanctions for the party found to be in the wrong. Those sanctions may be applied to the debtor and to the creditor alike.
The Judicial Fine (Enforcement and Bankruptcy Act, Art. 68/a(6) and (7))
If the court decides that the signature on the document belongs to the debtor, it will, under Art. 68/a(6) of the Enforcement and Bankruptcy Act, sentence the debtor to a judicial fine of 10% of the claim that is the subject of the proceedings. That fine is collected directly for the benefit of the State.
Two elements suffice for the fine to be imposed: the creditor must succeed in the action, and the debtor’s denial of the signature must be found unjustified.
Two exceptions have nevertheless been provided for:
- If, after the decision, the debtor brings an action for release from the debt, an action for a negative declaration or an action for restitution, execution of the fine is deferred until the action is concluded; if the debtor succeeds in the action, the judicial fine lapses.
- If the debtor acknowledges the signature at the hearing on the removal of the objection, or at the first sitting at which the creditor produces the document, no judicial fine will be imposed and the costs of the proceedings will not be charged to the debtor either (Art. 68/a(7)).
The Parties’ Liability in Compensation (Enforcement and Bankruptcy Act, Art. 68/a(8))
Compensation may also be awarded in this action upon the request of the opposing party. The aim is to provide a deterrent against the debtor’s unfounded objection just as much as against the creditor’s unjustified proceedings.
Compensation in favour of the creditor is subject to the following conditions: it must be established that the signature belongs to the debtor, the debtor’s objection to the signature must be found unjustified, and the creditor must have made a request for compensation. Where those conditions are satisfied together, the debtor will be sentenced to compensation of not less than 20% of the claim.
Compensation in favour of the debtor, on the other hand, arises in the following circumstances: the creditor must have commenced proceedings on the strength of a document whose signature does not belong to the debtor, it must be established that the signature does not belong to the debtor, and compensation must have been requested by the debtor. In that event the creditor will be obliged to pay the debtor compensation of at least 20%. Whether or not the creditor acted in bad faith is not considered here.
Deferral and Lapse in the Collection of Compensation
If, following the decision on provisional removal, one of the parties brings an action for release from the debt, an action for a negative declaration or an action for restitution, collection of the compensation awarded is held over until the action is concluded. Where the proceedings are decided in favour of the party sentenced to pay compensation, the earlier award of compensation likewise falls away.
The Action for Release from the Debt and Complementary Protection
When the provisional removal of the objection is ordered, the debtor’s objection is set aside and the proceedings continue. That decision does not, however, constitute res judicata. A debtor who remains of the view that they are not indebted has the possibility of bringing an action for release from the debt and proving that assertion before the general courts.
The Time Limit for the Action and the Security Requirement
The action for release from the debt must be brought within 7 days of service of the decision on provisional removal. The action is heard before the general courts and according to the simplified procedure.
The Enforcement and Bankruptcy Act places a debtor wishing to bring that action under a duty to deposit security amounting to 15% of the claim that is the subject of the proceedings. The function of the security is to prevent the debtor from leaving the creditor in suspense once more by bringing an arbitrary action.
The security deposited is treated, at the close of the proceedings, as the counterpart of the compensation to be awarded against a debtor found to be in the wrong; where the debtor succeeds in the action, it is returned to them.
The Effect of the Outcome of the Action on the Proceedings
The bringing of an action for release from the debt does not of itself halt the enforcement proceedings. The debtor may request the court to stay the proceedings by way of an interim injunction; the court will assess that request in the light of the existence of the security and the seriousness of the action.
Where the debtor succeeds in the action, the consequences are as follows:
- The security deposited is returned to them.
- The enforcement proceedings are annulled.
- Any judicial fine and compensation awarded fall away.
Otherwise the proceedings continue from where they left off and the decision given against the debtor becomes final.
Jurisdiction and Appellate Remedies
The Limits of the Enforcement Court’s Review
The court with subject-matter jurisdiction to examine a request for the provisional removal of the objection is, under Art. 68/a of the Enforcement and Bankruptcy Act, the Enforcement Court sitting in civil matters.
The court’s field of review has been kept narrow and is confined to the following matters:
- Whether an objection to the signature has been made in due form
- Whether the signature on the document relied upon in the proceedings belongs to the debtor
- Questions relating to compensation, security and time limits
Matters going to the substance — such as the legal character of the claim or the creation or extinction of the debt — lie outside the assessment of the Enforcement Court. Disputes of that nature can be resolved only through an action for annulment of the objection or an action for release from the debt brought before the general courts.
Appeal and Appeal on Points of Law Against the Decisions
Decisions of the Enforcement Court ordering the provisional removal of the objection, or dismissing such a request, are not final in character. The routes available against those decisions are as follows:
- Appeal: An appeal may be brought within 2 weeks of service of the decision (Code of Civil Procedure, Art. 341). The appeal is made through the court that gave the decision.
- Appeal on points of law: Where the decision of the Regional Court of Appeal given upon the appellate examination is amenable in law to an appeal on points of law, that route too is open.
Recourse to an appellate remedy does not halt the proceedings. At this stage the debtor may request a stay of enforcement. The request must be advanced together with the notice of appeal or of appeal on points of law, and security is generally required.
Independent Legal Assessment
An objection to the signature is a declaration that changes the direction of the process entirely in enforcement without a judgment. The mistake most frequently encountered in practice is confining the objection to a general formulation in the shape of an “objection to the debt”; the signature is then deemed to have been acknowledged, and the debtor’s strongest means of defence is exhausted at the very first step. On the creditor’s side, missing the six-month time limit for bringing the action causes the proceedings to founder despite a serviceable document.
Nor should the financial consequences of the action be taken lightly. If the signature turns out to belong to the debtor, a judicial fine of ten per cent of the claim and compensation of at least twenty per cent arise together; if it emerges that the signature does not belong to the debtor, that same burden of compensation is directed at the creditor, without any requirement of bad faith. The parties should therefore assess their position at the outset of the proceedings.
In a concrete file the following headings should be given priority:
- Expressing the objection to the signature in the notice of objection clearly and in terms that leave no room for doubt
- Calculating, on the creditor’s side, the six-month time limit for bringing the action from the date on which the objection was served
- Bearing in mind the duty to attend the hearing in person and the consequences of failing to attend without excuse
- Assembling in advance the comparison signatures to be used in the expert examination
- Planning, in the event of an adverse decision, for the seven-day time limit for the action for release from the debt and for the fifteen per cent security
- Assessing the risks of a judicial fine and of compensation in quantitative terms before proceedings are commenced
Independent Legal provides advisory services and conducts litigation in relation to the management of signature disputes in proceedings founded on ordinary written documents, actions for the provisional removal of the objection, and processes for release from the debt.