Turkey: Law On Mandatory Use Of Turkish In Agreements Still Very Much In Force Says Turkish Court Of Appeals

Enacted in 1926 (only three years after the young Republic of Turkey was founded), Law no. 805 on Mandatory Use of the Turkish Language for Corporations ("Law no. 805") requires all Turkish companies and enterprises to execute agreements they conclude in Turkey with other Turkish entities or individuals in the Turkish language.

Law no. 805 also requires foreign companies to use Turkish in their transactions and correspondence with Turkish entities¹ and any documents submitted to governmental authorities in Turkey. The law allows foreign entities to use a different language for these purposes, in addition to Turkish; adding, however, that the Turkish version prevails over the foreign language version.

The Law provides explicitly that any documents not adhering to these formal requirements will not be taken into consideration to the benefit of the non-complying company or enterprise.

Although not annulled or superseded by any other laws, there has been some confusion in legal circles over whether this strict 1926 law is still enforced in Turkish courts. Two consecutive decisions of the Turkish Court of Appeals dated 2006 and 2009, regarding a lawsuit filed by a Turkish bank customer in Istanbul show that, indeed, Law no. 805 is still very much in force.

While the bank customer argued that the spot/forward exchange agreement between the bank (also a Turkish entity) and the customer was invalid as it was executed in English and no translations were provided to the customer; the local court dismissed the lawsuit on the ground that the bank customer, who held a high-limit account in the bank, should have been aware of the type of transaction conducted with the bank. The Court of Appeals overruled this decision in 2006, stating that the bank may not rely on the validity of the spot/forward exchange agreement which was solely executed in English – with explicit reference to Law no. 805.

The local court complied with the Court of Appeals' decision and accepted the bank customer's claims in 2008. When the local court decision was appealed again (this time by the bank), the Court of Appeals approved the decision in 2009, referring again to Law no. 805.

Footnotes

1. Law No. 805 does not specifically refer to "agreements" under the article concerning foreign entities. This omission indicates that the Law no. 805 allows the execution of an agreement between a foreign entity and a Turkish entity in a foreign language.

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