Action for Annulment of Objection and Its Conditions

In cases of execution proceedings without a court order through general seizure, if the debtor raises an objection within the legal period, the execution is halted. Following the suspension, one of the means available to the creditor to continue the proceedings is the annulment lawsuit specified in Article 67 of the Execution and Bankruptcy Law. This lawsuit is filed by the creditor against the debtor who raised the objection. The part objected by the debtor in the execution proceedings forms the subject matter of the lawsuit. If the objection is raised against the entire debt or a portion thereof, the annulment lawsuit can be filed. Similarly, if the objection is raised against the signature or the interest, the annulment lawsuit can also be initiated.

"Article 67 - The creditor against whom the objection to the execution request is made can file a lawsuit for the annulment of the objection within one year from the date of service, proving the existence of their claim within the framework of general provisions.

If the unjustifiability of the debtor's objection is determined in this lawsuit, the debtor is sentenced to pay appropriate compensation, not less than twenty percent of the adjudicated amount, depending on the situation of both parties, the lawsuit, and the tolerance of the adjudicated amount. If the objector is a parent, guardian, or heir, the imposition of compensation against the debtor is subject to the establishment of bad faith."

The creditor who exceeds the period specified for the annulment of the objection as stated in the first paragraph reserves the right to sue for their claim within the general provisions. (Additional paragraph: 2/7/2012-6352/11 art.) In determining the execution denial compensation, bad faith compensation, and similar compensations envisaged in this Law, the request in the execution request or lawsuit is taken as a basis.

The creditor can initiate an annulment lawsuit in cases where both the signature and the debt are objected to. However, the annulment lawsuit can only be filed for objections related to the enforcement process. In cases related to objections to the enforcement law, an annulment lawsuit cannot be filed. In such situations, an application can be made to the enforcement court to lift the objection. For example, if the debtor objects to authorization or attachment, an annulment lawsuit cannot be filed, and instead, a case to lift the objection can be filed in the enforcement court.

1. Conditions for Filing an Annulment Lawsuit:

• Valid Enforcement Proceeding: To initiate an annulment lawsuit, there must be a valid enforcement proceeding in the authorized enforcement office against the defendant. In other words, it is essential for a non-judicial general enforcement proceeding to have taken place in the authorized enforcement office for the annulment lawsuit to be filed.
• Valid Objection by the Debtor: The debtor must raise their objection to the enforcement office within 7 days from the date of receiving the payment order. If the debtor objects to a part of the debt, they must clearly specify the portion and amount they are objecting to. In the case of an objection to the signature, this must also be clearly stated separately in the objection. Otherwise, the debtor is deemed to have acknowledged the signature on the document.

(Supreme Court 9th Civil Chamber 2007/14360 E, 2008/7511 K.)

"When a debtor wishes to object to a part of the debt in an enforcement proceeding initiated for a specific claim, they must clearly indicate the portion they are objecting to. If the debtor fails to comply with this requirement and objects to the entire debt, following the annulment lawsuit, they are obligated to pay execution denial compensation for the amount they owe."

- The Lawsuit Must Be Filed Within One Year: To file an annulment lawsuit, it is necessary for the debtor to initiate the lawsuit within one year from the date of the objection being served to the creditor. There is a statutory limitation period of one year for filing the lawsuit, and the court will automatically consider this period. If the one-year period elapses, the creditor cannot file an annulment lawsuit but can resort to a regular debt lawsuit.

- Legal Interest Must Exist: In an annulment lawsuit, one of the prerequisites is legal interest. There must be legal interest for the lawsuit to be filed. Legal interest implies that the plaintiff must have a genuine interest in bringing the case to court, seeking legal protection. In other words, the plaintiff must have a legitimate reason to file the lawsuit and request legal remedy from the court.

- No Final Judgment Should Exist: Another requirement is the absence of a final judgment related to the previously filed annulment lawsuit. It is important to clarify that by a "final judgment," it is meant that there should not be another case involving the same parties, subject matter, and cause of action as the annulment lawsuit. If there is a prior final judgment concerning the dispute in question, the lawsuit will be dismissed due to the absence of a legal basis.

- The Objection Should Not Have Been Lifted in the Enforcement Court: It is a requirement that the objection has not been lifted by the enforcement court. If the creditor has applied to the enforcement court and the objection raised by the debtor has been lifted, the creditor no longer has legal interest in filing an annulment lawsuit. In such a scenario, the filing of an annulment lawsuit would not serve any legal purpose.

2. Filing an Annulment Lawsuit: The annulment lawsuit is subject to the provisions of the Turkish Civil Procedure Code (CPC). The court where the lawsuit will be filed and the procedural rules applicable to the trial will be determined according to the CPC. The subject of the annulment lawsuit constitutes the claim for which the debtor raised objection in the enforcement proceeding. In this lawsuit, the creditor is the plaintiff, and the debtor is the defendant. The plaintiff creditor in the annulment lawsuit seeks the removal of the debtor's objection, a ruling stating that the objection to the enforcement is unjustified, and a decision indicating that the debtor is obligated to pay the claimed amount in the enforcement. Additionally, the plaintiff creditor may also request execution denial compensation from the court.

3. Competent and Authorized Court in the Annulment Lawsuit:

Jurisdiction in the Annulment Lawsuit: Jurisdiction pertains to public order and must be taken into account ex officio at every stage of the trial. In the absence of a contrary regulation, the court competent for property rights-related cases is the civil court of first instance. If the debt subject to the execution falls under the Consumer Protection Law, the annulment lawsuit is heard in the consumer court. If the debt subject to the execution falls under the jurisdiction of the Labor Court, the annulment lawsuit is filed in the labor court. However, in places where there is no labor court, it is heard in the civil court of first instance. (Supreme Court 9th Civil Chamber - Decision No: 2020/11925) "If the debt subject to the execution falls under the jurisdiction of the labor court, the annulment lawsuit is filed in the labor court. Therefore, according to Article 7 of Law No: 5521 on Labor Courts, an oral trial procedure is applied in the case."

Annulment lawsuits with a commercial nature are heard in the commercial court of first instance. (Supreme Court 19th Civil Chamber - Decision No: 2015/14521) "Since the lawsuit is an annulment lawsuit based on the general credit agreement signed between the plaintiff, who is not a party to the lawsuit, and the defendants as joint guarantors, and due to the unpaid credit debt, it must be accepted that the Commercial Court of First Instance was competent at the time the lawsuit was filed."

Authorized Court in the Annulment Lawsuit: Due to the close relationship between the lawsuit and the execution proceedings, the annulment lawsuit must be filed in the court located where the execution proceedings are conducted.

4. Burden of Proof: In terms of procedural rules, the annulment lawsuit is subject to general provisions. Unless there is a specific regulation in the law, the burden of proof belongs to the party making the claim. In the annulment lawsuit, the burden of proof generally lies with the creditor who filed the lawsuit.

5. Execution Denial Compensation: If the annulment lawsuit results in a decision that the debtor's objection is unjustified, the debtor, upon the creditor's request, can be sentenced to pay compensation, which is appropriate and not less than 20% of the claimed amount (Execution and Bankruptcy Law Article 67/2). This compensation is referred to as execution denial compensation. Execution denial compensation is designed to prevent the debtor from objecting to the enforcement unjustly and in bad faith. Otherwise, debtors might hesitate to object to the enforcement, even if their objection is unjustified, causing delays in creditors receiving their rightful payments.

6. Amendment in the Annulment Lawsuit: Amendment allows parties to partially or entirely correct procedural actions they have taken. Through amendment, the plaintiff can change the cause of action stated in the lawsuit or complete any missing details. The plaintiff can convert the annulment lawsuit into a debt lawsuit through amendment. However, it is not possible to amend the basis of the claim on which the enforcement request is based.

Pınar Öksüz

References:

I. Mahmut Coşkun, İtirazın İptali Davaları, Third Edition, 2016: Seçkin Yayıncılık

II. Baki Kuru, İcra ve İflas Hukuku El Kitabı, Second Edition, 2013: Adalet Yayınevi

III. Supreme Court 9th Civil Chamber, Decision No: 2007/14360 E, 2008/7511 K.

IV. Supreme Court 9th Civil Chamber, Decision No: 2020/11925

V. Supreme Court 19th Civil Chamber, Decision No: 2015/14521