The Validity of German Bankruptcy Decisions in Turkey: A Detailed Guide for Individuals, Limited and Joint-Stock Companies

Introduction

With the development of international trade and business, the legal effects of bankruptcy decisions made in one country in other countries have become increasingly important. The application of bankruptcy decisions made in economically strong countries such as Germany in Turkey is a complex issue. This article will examine in detail the legal validity, recognition, and enforcement of bankruptcy decisions given for individuals, limited liability companies (GmbH), and joint-stock companies (AG) that become bankrupt in Germany in Turkey.

Legal Nature of Bankruptcy Decisions in Germany

1. The Bankruptcy System in Germany

• The bankruptcy system in Germany is regulated for both natural persons (individuals) and legal entities (limited liability companies, joint-stock companies, partnerships, etc.).
• Bankruptcy decisions can also be made for individuals. The bankruptcy process for individuals in Germany is designed to protect those unable to pay their debts.
• For limited liability companies (GmbH) and joint-stock companies (AG), a bankruptcy decision initiates the process of distributing the company’s assets to creditors.

Comparison of Bankruptcy Law in Turkey and Germany

2. Bankruptcy of Individuals is Not Regulated in Turkey

• In Turkish law, bankruptcy is not a legal concept for individuals. In other words, the bankruptcy of individuals is not legally defined.
• Therefore, bankruptcy decisions made for individuals in Germany are neither recognized nor enforced in Turkey.
• In cases where individuals cannot pay their debts, different legal remedies (such as enforcement proceedings, composition agreements) apply in Turkey.

3. Bankruptcy of Limited and Joint-Stock Companies in Turkey

• Bankruptcy law is regulated for limited liability and joint-stock companies in Turkey.
• If the company’s assets are insufficient to cover debts, the court can issue a bankruptcy decision and initiate bankruptcy proceedings.
• In such cases, the bankruptcy decision of a limited or joint-stock company bankrupt in Germany can be recognized in Turkey.

Recognition and Enforcement of German Bankruptcy Decisions in Turkey

4. What Are Recognition and Enforcement?

• For court decisions made in another country to be valid in Turkey, recognition and enforcement procedures are required.
• Recognition: Acceptance that the decision is legally valid in Turkey.
• Enforcement: Official approval required to implement the decision.

5. Recognition of German Bankruptcy Decisions

• There is no specific international agreement between Germany and Turkey for mutual recognition of bankruptcy decisions.
• To recognize a German bankruptcy decision in Turkey, a recognition and enforcement lawsuit must be filed in Turkish courts.
• The court examines whether the decision was properly issued and whether it conflicts with Turkish public policy.

Detailed Examination: Individuals, Limited and Joint-Stock Companies

6. German Bankruptcy Decisions for Individuals and Turkey

• Bankruptcy decisions can be made for individuals in Germany, providing an opportunity to discharge debts and return to economic life.
• Since bankruptcy is not legally defined for individuals in Turkey, such German bankruptcy decisions are not recognized or enforced there.
• Individuals bankrupt in Germany are subject to different legal procedures in Turkey regarding debt collection.

7. Limited Liability Companies (GmbH)

• GmbHs can go bankrupt in Germany, and courts can issue bankruptcy decisions.
• Such decisions become valid in Turkey for assets or activities located there after recognition and enforcement procedures in Turkish courts.
• The bankruptcy decisions of limited companies equivalent to GmbHs in Turkey can also be recognized similarly.

8. Joint-Stock Companies (AG)

• Bankruptcy decisions for AGs in Germany can be recognized and enforced in Turkey.
• Bankruptcy proceedings can be initiated for assets located in Turkey.
• After recognition and enforcement lawsuits, creditors can exercise their rights over the bankrupt company’s assets in Turkey.

HÖMK and Recognition of International Bankruptcy Decisions

9. HÖMK (Jurisdiction and Enforcement Agreement in Civil and Commercial Matters)

• Since both Turkey and Germany are parties to HÖMK, its rules can apply for mutual recognition of general court decisions.
• However, there is no comprehensive regulation specifically for bankruptcy decisions; thus, separate recognition and enforcement processes are required for each bankruptcy decision.