Category: Turkiye

The 12th Civil Chamber of the Court of Cassation ruled with its decision numbered 2022/9954 (E. 2022/6460) and dated October 6, 2022 (the “Decision”) that the prohibition on determining a contract value in foreign currency or indexed to foreign currency which introduced by the Decree No. 32 on the Protection of the Value of Turkish Currency (“Decree No. 32”) concerns public order and must be taken into account by the judge ex officio (automatically) even if it is not raised by the parties during the proceedings.

A) Evaluation of the Decision within the Scope of Turkish Legislation

Pursuant to the Decree No. 32, which was adopted for the purpose of protecting the value of the Turkish Lira, the contract value and other secondary payment obligations arising from the movable and immovable property sales and lease agreements (including vehicle and financial leasing), employment agreements, service and contractor agreements etc. which entered into force between Turkish residents, cannot be determined in foreign currency or indexed to foreign currency.

Article 63 of the Enforcement and Bankruptcy Law stipulates that the debtor who objects to a payment order, is not entitled to expand or change the grounds and objections raised against a debt before the enforcement office, during the proceedings. Furthermore, pursuant to Article 27/1 of the Turkish Code of Obligations, the contracts whose subject matter is against the mandatory provisions of the law, morality, public order, personal rights or whose subject matter is impossible, must be deemed invalid.

During the case subject to the Decision, the court ruled that the rental fee determined in foreign currency in violation of the Decree No. 32, concerns public order and although not objected by the debtor during the enforcement proceedings, must be taken into account by the judge ex officio during disputes. In summary, in case of a contract value determined in contrary to the Decree No. 32, the Article 63 of the Enforcement and Bankruptcy Law will not be applied, and the judge will ex officio consider such violation of the Decree No. 32, during its decision making process, for the purpose of preservation of the public order.

B) What Does the Decision Aim?

Considering the purpose of the Decree No. 32, it is observed that the public order introduced by the laws are reflected in legal practice through the Decision. Meaning that, it has been aimed to disseminate the economic public order which is to be protected by the Decree No. 32, in all areas of the law.

By Cerensu Cetin Yenigun, Senior Associate, and Selin Ivit, Associate, Moral, Kinikoglu, Pamukkale, Kokenek

Hengeler Mueller has advised Salzgitter Mannesmann on the sale of its 50% stake in Europipe US-based subsidiary Berg Pipe to Istanbul-based Borusan Mannesmann.

Salzgitter Mannesmann and Borusan Mannesmann are steel companies. Berg Pipe is a Florida-based manufacturer of large-diameter line pipes for the oil and construction industries. 

Hengeler Mueller’s team included Germany-based Partners Simon Patrick Link, Sarah Milde, and Gunther Wagner, Counsel Alexander Bekier, and Associates Gulsah Civelek, Sebastian Dworschak, and Tobias Schwab.

Hengeler Mueller did not respond to our inquiry on the matter.

Editor’s Note: After this article was published, Paksoy announced it had advised Salzgitter Mannesmann as well. The firm’s team included Partners Elvan Aziz, Omer Collak, Togan Turan, and Sansal Erbacioglu, Senior Associates Asli Eryilmaz and Busra Akture, and Associate Irem Deyneli.

Following the 7.8. and 7.5. magnitude earthquakes occurred in Kahramanmaraş on 06.02.2023, the Presidential Decree on the declaration of the State of Emergency for 3 months in the cities affected by the earthquakes was adopted by the Turkish Grand National Assembly on 09.02.2023 and was published in the Official Gazette No. 32100 dated 10.02.2023. A number of measures concerning work and social security field were also envisaged in the scope of the State of Emergency.

With the said Decree No.125, for earthquake victims in the regions where the State of Emergency was declared, some measures were taken regarding the provision of cash wage support and the extension of certain deadlines stipulated under the Law on Trade Unions and Collective Labor Agreements, as well as measures regarding short-time working allowance and prohibition to dismiss employees, which we remember from the pandemic period that we have recently experienced.

In addition, the Decree also discussed the functioning of certain practices in the field of social security in terms of health service providers in the cities affected by the earthquake. 

What Are The Measures Implemented by the Decree?

A Short-Time Working Allowance Will Be Ensured.

• During the State of Emergency, a short-time working allowance will be given without waiting for the completion of the eligibility determination, upon the application of employers to the Turkish Employment Agency for workplaces located in cities/districts, to be determined by the Ministry of Labor and Social Security from the area where the State of Emergency is declared, and/or workplaces documenting that they were destroyed, to be destroyed immediately , severely or moderately damaged due to earthquake “according to the earthquake effect status”.
• The extra payments which were made due to the incorrect information and documents provided by the employer will be collected from the employer together with legal interest.
• Applications can be made via E-Devlet.

Cash Wage Support Will Be Provided From the Unemployment Insurance Fund

• A Daily cash wage support of 133.44 Turkish Liras will be provided from the Unemployment Insurance Fund, during the period of short-time working or the period of unemployment, not exceeding the duration of the State of Emergency for the employees who have an employment contract as of 06.02.2023 in the cities where the state of emergency is declared and who fulfill the following conditions
• Those who don’t have a new entitlement based on the short-time working application made by their employer on the grounds of regional crisis caused by the effects of earthquakes and
• Those, whose employment contract was terminated after 06.02.2023 due to the shutdown or closure of the workplace due to the effects of earthquakes and who don’t have a new unemployment benefit entitlement under the same Law,
• Applications can be made via E-Devlet.
• In terms of providing cash wage support, the condition of not receiving an old-age pension from any social security institution will be sought and cash wage support will be provided after the remaining periods of entitlements that can be started before, if any, are completed.
• Among those who benefit from cash wage support, those who are not covered by the general health insurance holder or the dependents of the general health insurance holder, will be considered as general health insurance holders and their premiums regarding the general health insurance will be covered by the Unemployment Insurance Fund.
• The overpayments due to the incorrect information and documents provided by the employer will be collected from the employer together with legal interest.

Prohibition of Dismissal was Stipulated in order to Safeguard the Continuity of Employment

• Any employment or service contract in the cities where the State of Emergency has been declared, cannot be terminated by the employer during the State of Emergency, starting from 22.02.2023, except the exceptions listed below.
• Employment or service contracts in the cities where the State of Emergency has been declared can only be terminated for the following reasons:
• Cases and similar reasons that don’t comply with the rules of morality and good faith figuring in the sub-paragraph of Article 25 of the Labor Law no. 4857 (“Labor Law”) titled “Cases and similar that do not comply with the rules of morality and good faith” and in the relevant provisions of other laws,
• Termination of the term in fixed term employment or service contracts,
• The closure of the workplace for any reason and the termination of its activity,
• The termination of the work in all kinds of service procurements and in constructions works realised according to the relevant legislation.
• The employer or employer’s representative who terminates the employment contract in violation of the provisions of this article, will be imposed an administrative fine by the Provincial Directorates of Labor and Employment Agency in the amount of the monthly gross minimum wage determined according to the Article 39 of the Labor Law.

Certain Deadlines Will Be Extended During the State of Emergency

The deadlines in the scope of Law No. 6356 on Trade Unions and Collective Agreements regarding; the granting of authorization determinations, the conclusion of collective labor agreements, the settlement of collective labor disputes, the resolution of collective labor disputes and strike and lockout will be extended for the duration of the State of Emergency in the cities where the State of Emergency has been declared as of 06.02.2023 (including this date).

• Pursuant to the third paragraph of the Article 38 of the Labor Law, “the one-month period stipulated for the deposit of penalty deductions from workers’ wages to the account of the Ministry of Labor and Social Security to be used and spent for the training and social services of workers” will be extended during the State of Emergency for workplaces in cities where the State of Emergency has been declared.

Measures Will Be Taken Regarding Social Security for Health Service Providers in Cities Where the State of Emergency is Declared

• Advance payments of health service providers located in and/or providing services in the cities where the State of Emergency has been declared will be exempt from Article 35 titled “Advance Payment” of the Public Financial Management and Control Law No. 5018 during the State of Emergency.
• Invoices, documents and annexes on which the payment of health expenses are based on and which should be submitted to the Social Security Institution (“SGK”) by health service providers located in and/or providing services in the cities where the State of Emergency has been declared, but which cannot be obtained due to the effects of earthquakes, may not be sought in the invoice audit.
• Overpayment and improper payment and contractual penal clause debts of health service providers, located in and/or providing services in the cities where the State of Emergency has been declared; can be postponed by SGK during the State of Emergency.

By Cigdem Soysal, Senior Associate, and Alperen Kocalan, Associate, Ece Aksel, Junior Associate, KP Law

In these days when 1.4 million workers in active working life in Turkey are expected to retire immediately by benefiting from the legal regulation regarding retirement age victims (“EYT”), it is important to evaluate the effects of this situation on employers, to determine in advance how employers will manage this process and, if necessary, to publish workplace regulations on this issue for the following reasons:

1– The mass demand for retirement and the fact that retired workers plan to continue their active working life to a large extent due to the abolition of the age requirement distinguish retirement within the scope of EYT from other retirement situations.

2– If a large number of workers terminate their employment contracts in order to receive retirement pensions, employers may face a shortage of experienced personnel.

3– The employee who terminates his/her employment contract due to retirement is entitled to severance pay and, if any, the wages of unused annual leave days. If a large number of workers are entitled to severance pay and annual leave pay at the same time, employers will face a serious financial burden.

4– In order to prevent the loss of experience memory and skills, it is possible that employers may want to employ some workers even after retirement. According to surveys, the majority of workers within the scope of the EYT regulation want to continue working after retirement due to the idea that they will not be able to live solely on their pensions and because they retired at an early age.

This situation has left employers with a number of legal questions, most of which are not answered in the law. It is important that these questions are answered by interpreting the existing legal regulations and that employers prepare for the EYT process in the light of this information:

1- Can the employer terminate the employment contract of an employee who is entitled to retirement within the scope of EYT due to retirement?

The employer does not have the right to terminate the employment contract only because the employee is entitled to retirement or has reached a certain age. Therefore, termination of the employment contract by the employer due to retirement results in the consequences of unfair termination. The right to terminate the employment contract due to retirement belongs to the employee and the employee is entitled to severance pay when the employment contract is terminated due to retirement.

2-Does the employer have to accept the employee’s request to terminate the employment contract due to retirement?

An employee who meets the conditions for a pension has the right to terminate his/her employment contract for this reason. This is because retirement is the legal right of the employee who meets the necessary conditions and the employee cannot retire while continuing to work. Termination due to retirement is a unilateral termination made by the employee and is not subject to the employer’s approval. However, a worker who meets the retirement requirements is not obliged to retire and cannot be forced to retire by the employer. The decision to retire belongs to the employee.

3-Does the employee who terminates his/her employment contract due to retirement need to notify the employer in advance?

The employee is not obliged to give a notice period in the process of leaving work due to retirement. The employee has the right to terminate his/her employment contract due to retirement without prior notice.

4-Can severance pay and annual leave pay of an employee who terminates his/her employment contract due to retirement be paid in installments or postponed?

Employers will face a significant financial burden since the employees who terminate their employment contracts due to retirement will earn severance pay and annual leave pay, if any. For this reason, employers may want to postpone or to make the payment of labor receivables in installments. Especially if the employee will continue to work in the same workplace after leaving the job due to retirement, postponing the payment of these receivables with an agreement is an issue that may come up frequently in the coming days.

As a rule, severance pay and annual leave pay must be paid immediately after the termination of the employment contract. There is no legislative provision or precedent decision on whether these receivables can be postponed with the agreement of the parties.

However, there are high court decisions stating that severance pay can be paid in installments with the mutual agreement of the employee and the employer. In these decisions, it is considered valid for the parties to install the severance pay in installments with an agreement, except in the event that the employee claims that his/her will has been revoked and proves this claim. In our opinion, if the parties can make an agreement on the date of payment of the severance pay by installments, the postpone of the payment of the severance pay by mutual agreement of the parties should also be considered valid.

However, the conditions for the postponement of severance pay must be carefully agreed upon in the written agreement to be concluded between the employee and the employer. Otherwise, the employer may face additional obligations in a possible lawsuit.

5-Does it constitute a violation of the employer’s obligation of equal treatment if some of the employees who retired within the scope of the EYT are re-employed in the same workplace while others are not?

According to the decisions of the Court of Cassation, the principle of equal treatment is valid in all areas of law and the employer is under the obligation to act equally among the employees working in the workplace unless there is a justified and objective reason.

Since the age requirement is abolished within the scope of the EYT regulation, it is expected that the majority of workers who leave their jobs to retire will continue their working life. Employers will also prefer that some workers continue to work in the workplace in order to avoid the loss of experience memory and skills.

At this point, it may be considered that the employment contract of the employee has ended due to retirement, the employer is free to re-hire the employee or not, and if the employee is re-hired, the contract to be concluded is a new employment contract. In our opinion, it should be accepted that the employer has the freedom to decide which employees to re-hire. However, there are decisions of the high courts have ruled that the same employment contract continues if the employee continues to work in the same workplace uninterruptedly after leaving the workplace, and they have reached a conclusion on the claim subject to the lawsuit with this acceptance. For this reason, it is important to determine the objective and subjective criteria, to determine the workers who will continue to be employed after leaving the workplace due to retirement based on these criteria, and to keep the information and documents related to this determination in order to demonstrate, against the possibility of a claim of violation of equality.

By Cigdem Soysal, Senior Associate, and Alperen Kocalan, Associate, KP Law

Web scraping refers to several techniques used to collect data from the internet and is also known as screen scraping or data mining. With the web scraping method, the content available on someone else’s website on the Internet is collected through software that simulates website browsing and is used on the scraper’s websites or services. The best-known examples of web scraping are various price comparison sites, flight tracking programs, and news-curated websites.

The concept of web scraping is related to the fact that data can now be traded like a commodity, given the technological advancements. However, the fact that content is available on the internet does not mean that it can be used again. Whether the data owner’s rights have been violated is crucial. There are various legal regulations to prevent these violations.

Web Scraping Under EU, US, and Turkish Law

In EU legislation, Directive 96/9/EC [the “Directive”] has been issued to protect databases from intellectual property rights violations that may be caused by web scraping. The Directive makes a distinction based on database originality and provides copyright protection for original databases. In terms of non-original databases, the Directive on Copyright in the Digital Single Market [the “DSM Directive”] regulates “sui generis” protection.

Although regulations regarding web scraping are still rare in US law, the primary regulation in this area is the Computer Fraud and Abuse Act of 1986 [the “CFAA”]. According to the CFAA, unauthorized access to a computer system is a criminal offence. However, the term of unauthorized access has been debated since the CFAA came into force. In the hiQ v. LinkedIn decision dated 2022, the Court of Appeal held that the scraping of publicly available data was lawful and did not breach the CFAA. However, hiQ was found to have violated the LinkedIn User Agreement by creating fake profiles. Although the lawsuit was settled before a final decision was rendered, the court’s decision is important because it excludes web scraping from the definition of fraud.

While there is no direct regulation on web scraping in Turkish law, Law No. 5846 Law on Intellectual and Artistic Works [the “Copyright Law”] regulates the protection of databases in parallel with the EU Directive.

Copyright Protection of Databases under Turkish Law

The relevance of data scraping to copyright is whether the use of the data would violate the copyrights of the data subjects. Based on various Court of Cassation decisions, it can be stated that the general tendency in Turkish law is to protect websites as databases and database protection is regulated in Copyright Law. In this context, Copyright Law regulates both the protection of original databases, that is, databases that are obtained by selection and compilation of data and materials according to a specific purpose and a specific plan, and Sui Generis database protection.

Article 6/b.11 of the Copyright Law protects the first type of database and is a kind of protection of work in terms of its legal nature. In this context, the owner of an original database will be able to benefit from all the work protection provisions of the Copyright Law for violations to which the database may be subject, just like the owner of a literary, musical or cinematographic work.

Databases must meet the requirements of containing content selected or arranged according to a specific purpose and within a particular plan that is accessible in any way in order to be eligible for copyright protection under Art. 6/b.11 of the Copyright Law. It should also be kept in mind that in order for a database to benefit from the protection of work and therefore from the protection of Copyright Law, it must both bear the characteristics of its author and fall within one or more of all kinds of intellectual and artistic products that are deemed scientific, literary, musical work or work of fine arts or cinematographic work.

It may not always be possible to consider every content on a website as a work as explained above. For example, it is clear that prices per square meter by neighbourhood compiled from real estate websites or comparative price information of a mobile phone cannot be defined as copyrighted work. The sui generis protection regulated in the additional Art. 8 of the Copyright Law might apply in this situation. Accordingly, the relevant database producer (the creator of a database – the investing database producer) has the right to permit or prohibit the permanent or temporary transfer of a substantial part or all of the contents of the database to another medium by any means and any form, and the distribution, sale, rental or communication to the public in any way. Certainly, it will also be possible to claim compensation for damages in the event of a breach.

Finally, although it is not the subject of this article, it should be noted that personal data related to scraped data may be subject to separate protection and websites may face claims of breach of membership or user agreements. In the EU case Ryanair v. PR Aviation, in which the Directive was applied, it was held that the use of the database of the website of Ryanair, an airline company, by the price comparison website PR Aviation through ‘screenscraping’ was not subject to copyright or sui generis protection. However, it was ruled that data scraping from databases can be limited by contractual obligations (user agreement, membership agreement, etc.), provided that it is in accordance with national law.

Conclusion

Turkish law does not yet have a regulation directly regulating web scraping. Nonetheless, it appears that websites may be protected against right violations caused by data scraping under work protection or Sui Generis protection provisions, if they meet the requirements stipulated in the Copyright Law according to the type of database.

By Nihat Ozbek, Partner, Guleryuz & Partners

Aksan has advised Simya VC on its investment in AI-powered content creation tool developer Evercopy.

Simya VC provides investment capital, mentorship, and network support to early-stage startups.

Aksan’s team included Partner Alper Onar, Managing Associate Emre Subasi, and Associate Doruk Gokoglu.

Aksan did not respond to our inquiry on the matter.

Paksoy, working with Latham & Watkins, has advised Rivulis on its acquisition of a part of the international irrigation business of Jain Irrigation.

According to Paksoy, “the transaction covers the acquisition of Jain Sulama Sistemleri in Turkey and successfully closed on April 3, 2023.”

Rivulis is a portfolio company of Temasek and a micro-irrigation business focused on promoting a sustainable agri-food supply chain.

Jain Irrigation is an Indian multinational company operating 33 manufacturing plants spread over four continents. 

Paksoy’s team included Partner Togan Turan and Senior Associate Simge Sengun.

Paksoy did not respond to our inquiry on the matter.

Paksoy, working with Winston & Strawn, has advised MCC Verstraete on its acquisition of Korsini-Saf Ambalaj from Korozo Ambalaj and Enrico Corsini.

MCC Verstraete is a supplier of premium label solutions and a subsidiary of the Multi-Color Corporation.

Korsini-Saf Ambalaj is a manufacturer of in-mold labeling.

Paksoy’s team included Partners Elvan Aziz and Serdar Ildirar and Associates Tugcan Akalin and Ece Bezmez.

Paksoy did not respond to our inquiry on the matter.

Since the parties cannot resort to state courts as long as there is an arbitration agreement (Article 5 of the ICC and Article 413 of the CCP), the parties may be deprived of the right to resort to state courts if the arbitration proceedings take longer than necessary. On the other hand, one of the most important advantages of arbitration is that arbitral proceedings can be completed in a shorter period of time than state courts. Taking these principles into consideration, the legislator has limited the arbitration proceedings to a time limit in the International Arbitration Law and the Code of Civil Procedure.

The sanction for failure to comply with this time limit is the annulment of the arbitral award rendered after the expiration of the arbitration period upon the request of one of the parties (Art. 15(A)(1) of the IAA, Art. 439 of the CCP).   There are statutory provisions on the duration of the arbitration and how to extend the arbitration period in the event that the arbitral award cannot be rendered within the time limit (Art. 10 ICC and Art. 427 CCP). These provisions are not mandatory. Therefore, institutional arbitration rules have different provisions on the duration of the arbitration and how to extend the arbitration period (Art. 31(1) of the ICC Arbitration Rules (Art. 33(1) of the Istanbul Arbitration Center (ISTAC) Arbitration Rules). In arbitrations subject to institutional arbitration rules, the duration is determined according to these rules. In Ad Hoc arbitrations not governed by institutional arbitration rules, the provisions of the Law shall apply.

The Court of Cassation held that in arbitrations governed by the CCP, the authority to extend the time limit belongs to the courts of institutional arbitration centers. However, in arbitrations governed by institutional arbitration rules, the Turkish courts do not have the authority to extend the arbitration period 

In the arbitration proceedings subject to the Court of Cassation decision, the seat of arbitration was Turkey and the proceedings were conducted in accordance with the Arbitration Rules of the International Chamber of Commerce (ICC). The Court of Arbitration of the International Chamber of Commerce granted 18 extensions of time in accordance with the ICC Arbitration Rules. The award was rendered within the time limit set by the Court. During the arbitration proceedings, the claimants requested additional time from the Turkish courts pursuant to Article 424 of the Code of Civil Procedure (CCP). However, the fifth request for additional time was rejected by the court. The respondent therefore claimed that the award was not rendered in time and requested the annulment of the untimely award pursuant to Article 439 of the CCP.  The Regional Court of Justice (RCJ) annulled the award on this ground. The Court of Cassation, on the other hand, held that the extension of the arbitration period in arbitration proceedings subject to the ICC Arbitration Rules is exclusively governed by the ICC Arbitration Rules. The Court of Cassation stated that Article 424 of the CCP, which regulates the procedure for the extension of the arbitration period, is not a mandatory provision and that the parties may make a different arrangement on the extension of the arbitration period. The Court rejected the request for annulment of the arbitral award as it was rendered within the additional period granted by the ICC Court.  

This decision of the Court of Cassation is very important for implementation. After this decision, in arbitrations subject to institutional arbitration rules, if the parties cannot agree on the extension of the term, the term will be determined according to the institutional arbitration rules (ICC Rules of Arbitration Art.31(1) Istanbul Arbitration Center Arbitration Rules Art.33) In this case, a decision of the Turkish courts to grant or deny an extension of time will not determine the  time limit for the arbitration. Accordingly, there is no need to request an extension of time from the Turkish courts in ongoing arbitrations subject to the ICC and ISTAC Arbitration Rules. In ad hoc arbitrations that are not subject to institutional arbitration rules, if the parties cannot determine the duration of the arbitration by agreement, the courts are exclusively authorized to determine the duration of the arbitration (Article 427 of the CCP and Article 10 of the IAA).

By Cemile Demir Gökyayla, Partner, Berk Recber, Trainee, KP Law

Kumkumoglu Ergun Cin Ozdogan has advised Robeff Technology on its USD 200,000 seed investment round led by Yildiz Tekno GSYO and supported by Adventures GSYF. The Guclu Law Firm advised the lead investors.

Robeff Technology produces fully autonomous delivery robots.

KECO Legal’s team included Partner Ozkan Ozdogan and Associates Alper Katirci and Can Ergun.

The Guclu Law Firm team was led by Founding Partner Umur Guclu.