1) Party capacity vs standing: the first distinction that prevents early dismissal
In Turkish litigation, party capacity is the ability to be a party to a lawsuit. The Civil Procedure Code links party capacity to the ability to enjoy civil rights.
This is different from standing (proper plaintiff/defendant). A foreign company may have party capacity, yet the claim may still fail procedurally if it is directed against the wrong entity within a corporate group. In cross-border structures, this mistake is common and costly.
2) Litigation capacity and representation: legal entities act through their organs
Even where party capacity exists, a separate question arises: who can conduct litigation steps? Turkish procedural law ties litigation capacity to the ability to exercise civil rights and regulates representation where the party cannot act personally.
For legal entities, the substantive framework is clear: legal persons are generally capable of rights and obligations except those inherently human; they acquire capacity to act when they have the necessary organs and express their will through those organs.
Therefore, cross-border disputes are often not blocked by “capacity in theory” but by “proof of representation in practice.”
3) Which law governs the capacity of foreign legal entities? The Private International Law rule
The core conflict-of-laws rule is found in the Turkish Private International Law and Procedural Law Act (Law No. 5718). For legal entities and associations of persons/assets, capacity is, as a rule, governed by the law of the statutory administrative center; if the actual administrative center is in Turkey, Turkish law may be applied.
This translates into a workable litigation approach:
- Existence, dissolution, corporate organs, and authority to represent are primarily assessed under the entity’s status law.
- Where management is effectively carried out in Turkey, capacity discussions may shift toward Turkish law.
The same legislation also addresses entities without a “status” and groups lacking legal personality by referring to the law of the actual administrative center.
This is particularly relevant to unincorporated associations, consortium-style structures, and some joint ventures: the court must first identify what kind of subject it is dealing with.
4) Foreign companies: capacity is rarely the real problem—evidence and authority are
In commercial practice, foreign companies usually have party capacity once their legal personality is established. Turkish private law accepts broad legal capacity for legal persons in line with the Civil Code framework.
The consolidated texts of the Turkish Commercial Code also demonstrate the tight integration of commercial entities with the Civil Code system.
However, Turkish courts typically require clear answers supported by documents:
- Does the company currently exist (good standing / registry extract)?
- What is the exact legal name and registration data (to avoid suing the wrong entity)?
- Who has authority to bind the company (board/management authorization, signature authorities)?
- Who issued the power of attorney, and is that person authorized under the status law?
In practice, legalization/apostille requirements and sworn translations often become the “real battlefield,” even if the legal theory is straightforward.
5) Foreign associations: party capacity is distinct from operating permission in Turkey
For foreign associations, two tracks must be separated:
(i) Party capacity / ability to litigate: If the association has legal personality and capacity under its status law, the Private International Law rule allows Turkish courts to assess party capacity through the governing law of the administrative center.
(ii) Permission to operate, cooperate, or open a branch/representative office in Turkey: Turkish Association Law introduces an authorization regime for foreign associations to conduct activities or cooperate in Turkey and to open a representative office/branch.
A lack of operational permission does not automatically erase party capacity, but it can generate additional legal and compliance arguments depending on the factual scenario. For litigation strategy, both the capacity rule (Law No. 5718) and the operational regime (Association Law) should be evaluated together.
6) The branch trap: who is the correct party—head office or branch?
Cross-border disputes frequently arise from Turkish operations conducted via a branch or representative structure. If the plaintiff names the “branch” as if it were a separate legal person (when it is not), the case can face complications around service of process, proper defendant identification, and enforceability.
In short: party capacity may exist, but correct party designation is the practical key.
7) Time-sensitive capacity issues: liquidation, merger, name changes
Capacity questions can become time-dependent:
- Was the company in liquidation when the claim was filed?
- Did a merger or acquisition occur during the proceedings?
- Has the legal name changed in the registry?
If these changes are not documented properly, the dispute may stall before reaching the merits. Courts expect updated registry and authorization evidence in order to continue with a legally valid representative.
8) A related procedural reality: security for costs for foreign parties (Law No. 5718, Art. 48)
Even when party capacity is satisfied, foreign natural and legal persons who sue or initiate enforcement in Turkey may be required to provide security for costs as determined by the court.
This requirement is separate from capacity, but it is often encountered in the same files and must be planned from day one.
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