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4. Rational Dispute Resolution
4.1 Rule of Law
4.2 Enforcement of Contracts
4.3 Commercial Dispute Resolution
In-Country Assessment Information

4. Rational Dispute Resolution

Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default

 

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4.1 Rule of Law

 

Core Question: Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime[h1] ?  No – Weak, the judiciary is subject to government influence.

Impartiality

4.1.1   What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Strong – Percentile Ranking – 57.7 Trend  

Source: Governance Matters 2011, World Bank, www.govindicators.org

Judiciary

4.1.2   Can members of the judiciary be held accountable for their actions? Yes – Score 69 out of 100 – Weak

 Source: Global Integrity Report 2010 –  https://www.globalintegrity.org/global/the-global-integrity-report-2010/turkey/

Costs of Crime

4.1.3   What are the business costs of crime and violence? Weak – Ranking 76th out of 144 – Score 4.8 out of 7

Source: The Global Competitiveness Report 2012-2013, World Economic Forum
http://www.weforum.org/issues/global-competitiveness

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4.2 Enforcement of Contracts

 

Core Question:  Are systems in place for timely and efficient enforcement of contracts?
Commercial – Yes –           Very Strong
  Residential –   Yes –  Strong

4.2.1 – Judicial Enforcement

Commercial – Very Strong – Ranking 40th out of 183 Trend

4.2.1.1 What is the number of procedures involved in resolving a commercial dispute? 36

4.2.1.2  What is the time between the filing of a lawsuit and resolution in judicial enforcements? 420 days

4.2.1.3  What is the cost of judicial enforcements as a percentage of debt value? 24.9%

Residential – Strong

Survey Questions

SQ 12  What is the time between notice of intent to foreclose and loan collection in judicial enforcements?  see Summary Proceedings

SQ 13  What is the cost of judicial enforcements as a percentage of property value?  see Summary Proceedings

 

4.2.2 – Summary Proceedings

SQ 14  Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders? 161 days – Strong

SQ 15  What is the cost of summary proceeding if available to lenders as a percentage of property value?  7.55% – Strong

4.2.3  Power-of-Sale

SQ 16  Power-of-sale agreements give creditors to power to sell properties after notice to the borrower without court intervention. What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders?  Unavailable – Very Weak

SQ 17  What is the cost of power-of-sale agreements if available to lenders as a percentage of property value?  Unavailable – Very Weak

Source – Financing Homes 2008, World Bank and International Housing Finance Corporation  http://www.cipe.org/sites/default/files/publication-docs/Financing%20Homes%202008.pdf

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4.3 Commercial Dispute Resoluiton

 

Core Question:  Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay?   Yes – Strong, but the courts are over burdened and slow.

 

Survey Questions

Commercial Courts

SQ 18  Do specialized commercial courts exist for the handling of property disputes and foreclosures? Yes – Strong

Source:  Turkey: Commercial Litigation in Turkey: How Does It Work?  http://www.mondaq.com/x/259062/Arbitration+Dispute+Resolution/Commercial+Litigation+In+Turkey+How+Does+It

Alternative Dispute Resolution

SQ 19  Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes?   Yes – Strong.

           

Commercial Treaties

SQ 20  What bilateral, regional and international commercial treaties exist concerning business between countries[h2] ?  Very Strong – Turkey has 17 FTAs in force; namely,  EFTA, Macedonia, Bosnia-Herzegovina, Albania, Israel, Palestine, Morocco, Tunisia, Egypt, Syria1, Georgia, Serbia, Montenegro, Chile, Jordan, South Korea and Mauritius

Source: Republic of Turkey, Ministry of Economy   http://www.economy.gov.tr/index.cfm?sayfa=tradeagreements&bolum=fta&region=0

 

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In-Country Assessment Information (as of 2013)

FQ 7. To what extent do practitioners report contracts as enforceable? 

The legal system in Turkey lacks experience in dealing with sophisticated real estate issues.

For example, in Bodrum, a master plan was put on hold indefinitely—stopping all new development—because the court was unable to make a ruling for a single case. The new master plan that was put in effect changed the land use for one property owner, who in turn sued the municipality for damages to his property value. The court, however, could resolve this issue. 

Source: Summer 2011 Field Research Visit by Lin Mao, CIPE Intern and student at Johns Hopkins University

 

 

 

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