Payment Instruments, Checks–Promissory Notes, and Security Packages in Turkey: Disputes, Priority, and Fast-Track Enforcement

Scope & context. Foreign investors extending credit to Turkish counterparties routinely rely on a mix of payment instruments (checks, promissory notes), bank guarantees, and in rem securities (pledges, mortgages, commercial enterprise pledges). Turkish law offers robust enforcement routes—especially bill-of-exchange (kambiyo) proceedings—provided the security stack is properly documented, registered, and aligned with the Enforcement and Bankruptcy Law (İİK) priority rules. This note highlights common disputes and sets out practical drafting and enforcement tips.

1) Recurrent disputes

Dishonored checks (çek) & promissory notes (bono).
Typical issues include late presentation, formal defects (missing mandatory fields, irregular signatures), insufficient funds (karşılıksız), and challenges to endorsement chains. For promissory notes, defenses often target capacity/authority, consideration, or alterations. The creditor’s leverage depends on the instrument’s formal validity—if intact, the kambiyo track under İİK provides a summary, fast-track route to attachment and sale.

Aval and bank guarantees.
An aval (bill-of-exchange surety) creates joint and several liability on the instrument; formalities must appear on the face of the bill. Bank letters of guarantee (on-demand/independent guarantees) are widely used for construction, trade, and leasing. Under Turkish law and settled case-law, independence is respected; the bank pays “on first demand without objection”, subject to narrow fraud/abuse exceptions. Expect disputes around scope (“performance vs. payment”), expiry, and whether URDG 758 or local law governs.

Default interest.
Parties may agree contractual default interest (subject to mandatory caps and public-order limits). In commercial dealings, Turkish rules permit higher rates than legal interest; however, compound interest is restricted and only permitted within defined commercial exceptions (e.g., interest on arrears after maturity/account stated if expressly agreed). Poorly drafted clauses invite reduction by courts.

Priority contests.
Where multiple creditors exist, fights arise over rank among mortgages, movable pledges, commercial enterprise pledges, and assignment of receivables—especially if registrations or debtor notifications were missed, or negative pledge/pari passu covenants were breached.

2) Designing a bankable security package (and getting priority right)

Core stack.
Combine (i) cash collateral/escrow, (ii) on-demand bank guarantee or standby LC, (iii) assignment of receivables (with debtor notification/acknowledgment to perfect opposability), (iv) movable pledge over machinery, inventory, vehicles, IP, and bank accounts (registered in the TARES movable pledge registry), (v) commercial enterprise pledge (covering trade name, equipment, IP, etc., where appropriate), and/or (vi) mortgage over real estate (rank fixed by Land Registry order of registration).

Priority “waterfall.”

• Mortgages (ipotek): Priority by registration rank; later mortgages take junior rank. Intercreditor agreements can contractually reorder distributions but do not defeat third-party registrable ranks.
• Movable pledges (Law on Pledges on Movable Property in Commercial Transactions): Priority follows registration time in TARES; purchase-money-type arrangements and specific asset categories may enjoy super-priority if properly described and registered.
• Commercial enterprise pledge: Rank depends on registry entry; coordinate with other movable pledges to avoid collisions.
• Receivables assignment (alacağın temliki): Enforceability against the debtor requires notification; priority among multiple assignees typically turns on notification/acknowledgment chronology.
• Retention of title and set-off can supplement the package; spell out tracing, commingling, and proceeds language.

Intercreditor & negative pledge.
Use a subordination/pari passu deed, turnover provisions, and negative pledge to police new liens. Add perfection covenants (post-closing registrations, debtor notices) and events of default for breach.

3) Fast-track enforcement: kambiyo, provisional attachment, and injunctions

Bill-of-exchange route (İİK).
Valid checks/promissory notes permit accelerated enforcement: the court issues a payment order swiftly; debtor objections are narrowly circumscribed (formal defenses). Creditors can obtain provisional attachment (ihtiyati haciz) based on bills of exchange more readily than in ordinary debt claims—courts typically require prima facie proof and a security bond, though the threshold and amount may be lighter in kambiyo cases. Speed here is a decisive advantage over general proceedings.

Provisional attachment (İİK 257 et seq.).
For monetary claims (due or, in limited cases, not yet due), seek ex parte attachment upon showing (i) a credible claim and (ii) risk to collection (e.g., dissipation). Tailor the contract to support this:

• Acknowledgments of debt, account statements, and delivery/acceptance certificates as prima facie evidence.
• Jurisdiction/venue clauses pointing to creditor-friendly courts.
• Security waiver or reduction where permitted (e.g., strong documentary instruments).
  Attachment should target bank accounts, receivables (via garnishment), inventory, vehicles, and real estate—mirroring your perfected security.

Provisional injunction (HMK 389 et seq.).
Use injunctions for non-monetary or hybrid protections: freezing specific assets pending registration, preventing transfers of pledged shares, accessing books/IT systems, or compelling debtor cooperation (e.g., delivery of original instruments). An injunction usually requires security and a showing of irreparable harm.

4) Drafting & operational disciplines

• Presentation mechanics for checks. Calendar presentment periods and bank cut-offs; mandate electronic image exchange where available; allocate the cost and logistics of re-presentment.
• Aval & guarantees. Put aval on the instrument; for bank guarantees, insist on on-demand wording, independent of underlying contract, with clear expiry/claim windows and governing rules (e.g., URDG 758) consistent with Turkish law and jurisdiction clauses.
• Interest & fees. State default rate, calculation basis, and triggers; include break costs and indemnities for enforcement expenses.
• Perfection checklists. Hard-wire post-signing obligations: Land Registry filings, TARES registrations, debtor notices of assignment, vehicle/IP filings, and corporate approvals.
• Evidence file. Maintain a live deal binder: originals of bills/guarantees, board resolutions, notarized signatures, delivery/progress certificates, reconciliations, and correspondence—so a judge can grant attachment within days, not months.

5) Bottom line

In Türkiye, a well-structured security package—aligned with İİK priority rules, perfected by timely registrations and notifications, and backed by kambiyo-grade instruments—translates into real leverage. Combine on-demand bank guarantees with registered pledges/mortgages and receivable assignments; pre-arrange contractual evidence and forum clauses; and be ready to file provisional attachment the moment of default. That is the difference between a paper claim and a recoverable one.