Türkiye’s 12th Judicial Reform Package: Key Changes

The Grand National Assembly of Türkiye has adopted the “12th Judicial Reform Package” (the Law Amending Certain Laws to Ensure the Effective and Efficient Functioning of the Judiciary). The package amends a number of statutes. Set out below are the changes of greatest relevance to enforcement proceedings, commercial disputes and monetary claims.

Enforcement and Insolvency

The package introduces a specific rule for sales of inherited co-owned property. Where all co-owners are heirs and no third party holds a share, the first auction will be conducted once and exclusively among the co-owner heirs. For judicial sales more generally, the electronic sale notice must also reflect the revised rules on security, bidding and bidder default:

A creditor requesting the sale may bid without providing security to the extent that its claim is already secured. The Treasury is exempt from the security requirement altogether.
As a general rule, bids must exceed 50% of the appraised value. The threshold is 100% where the first auction is restricted to the heirs. At a second auction, the bid must exceed the higher of (i) 50% of the appraised value and (ii) the aggregate amount of prior-ranking secured claims, together with the costs of realisation and distribution.
A successful bidder who fails to pay within the prescribed period forfeits its deposit, which is applied first towards the costs of sale and then distributed to the persons entitled. Where the defaulting bidder is the creditor that requested the sale, an amount equal to 10% of the appraised value is set off against its claim. In all cases, the defaulting bidder is also subject to an administrative fine equal to 5% of its bid.

Administrative and Tax Litigation

A broader range of disputes will be heard by a single judge. Subject to the statutory exceptions applicable to regulatory acts, this includes annulment and full-remedy actions concerning administrative acts with a value of up to TRY 486,000 for 2026, corresponding tax disputes up to the same amount, and certain specified civil-servant and student matters.

The package also makes targeted changes to appeal and cassation. A regional administrative court that agrees with the outcome but not the reasoning may substitute its own reasoning and dismiss the appeal. It may quash and remit by final decision only in the expressly listed cases, including lack of jurisdiction, participation of a disqualified judge, a petition that should have been rejected, incorrect constitution of a party, failure to rule on a claim, or the absence of a required site inspection, expert report or hearing. As regards cassation, the principal changes concern the monetary thresholds: the route applicable to cases between TRY 270,000 and TRY 920,000 that are re-decided following quashing is removed. Cassation is also unavailable where the difference between the first-instance and regional-court awards is TRY 55,000 or less for 2026 and, in single-judge cases up to TRY 486,000, even where that difference is higher.

Civil Procedure, Interest and Damages

The principal changes affecting monetary claims are as follows:

The action for an indeterminate receivable is abolished. A claimant who brings a partial action may instead increase the amount claimed once, until the close of the investigation stage, without being barred by the prohibition on expanding the claim. Limitation in respect of the increased portion is interrupted as of the filing date of the action.
Save where reasons are expressly stated, hearings may not be scheduled more than three months apart. For parties attending by audio-visual link, wet-ink signature requirements no longer apply, except in relation to admissions, oaths, waiver, acceptance and settlement.
Where a regional court of appeal gives a fresh decision on the merits, cassation is available only if the statutory monetary threshold is exceeded. Below that threshold, cassation is unavailable where the difference from the first-instance award remains below the threshold or where the decision concerns costs or attorneys’ fees only.

Following the Constitutional Court’s annulment, the statutory interest regime is recast. In the absence of an agreed rate, interest accrues at 80% of the Central Bank’s short-term rediscount rate as at 31 December of the preceding year. The rate is reset mid-year if the rediscount rate changes by five percentage points or more as at 30 June. For claims concerning loss of earning capacity and loss of support, interest runs from the date of the event on the portion calculated by reference to known earnings, and from the date of judgment on the portion relating to the period for which earnings are not known. Payments made before the investigation stage begins are deducted proportionately.

Fraud — “IBAN Renting”

A new paragraph added to Article 158 of the Criminal Code provides for a 50% reduction in sentence where a person’s involvement in fraud or aggravated fraud is limited to enabling another person to use a bank, payment, brokerage, payment-service or crypto-asset account by providing the relevant information or means. The amendment is directed at the practice commonly referred to as “IBAN renting”.

The package amends a wide range of statutes, and its provisions will not all enter into force on the same date. Certain amendments will take effect only after specified transitional periods, and the final wording and commencement dates will be confirmed upon publication in the Official Gazette. We are reviewing the implications for pending and prospective matters and would be pleased to discuss how the changes may affect your business.

Please contact us should you require any further information or wish to discuss the potential impact of these amendments.