Following the decision of the Constitutional Court dated 10
April 2003, numbered E. 2002/112, K. 2003/33 that came into effect
as of 4 November 2003, Article 38 of the Expropriation Law (Law No.
2942) – governing the twenty-year statute of limitations
for claiming any unpaid expropriation price that was to be paid to
a landowner or his successors – was annulled.
Consequently, the twenty-year statute of limitations that ran from
the date on which the Expropriation Law was enacted, 4 November
1983, was abolished. However, the Constitutional Court's
annulment decision created a lacuna in the process for filing a
compensation lawsuit for prior expropriations, and the government
thus initiated the process of drafting a new regulatory scheme for
unpaid expropriations carried out between 9 October 1956 and 4
By adding a provisional article to Law No. 2942, new Law No.
5999 (the "New Expropriation Law")
regulates the rules for compensation for property expropriated
between 9 October 1956 and 4 November 1983. The Grand National
Assembly of Turkey approved the New Expropriation Law on 18 June
2010, and it was published in the Official Gazette on 30 June
Who is to benefit from the New Expropriation Law?
Persons whose property was taken over, but for which the
expropriation process was not duly completed, will benefit from the
New Expropriation Law. Claimants whose lawsuits were dismissed due
to the statute of limitations are also entitled to file a new
lawsuit for the compensation In brief, the New Expropriation Law
gives a right to claim compensation to persons from whom property
was expropriated between 9 October 1956 and 4 November 1983.
Two types of compensation process
There are two processes that could trigger the procedure for
compensation of unpaid expropriation prices: (i) reconciliation;
and (ii) litigation. Under the New Expropriation Law,
reconciliation could mean payment in cash, barter of government
assets, establishment of rights in rem on government
assets, or providing various zoning rights under zoning laws and
practice. Serious concerns have been raised with respect to the
last option, because there is no relevant provision under the
zoning laws. If the reconciliation process that is to be completed
within 6 months results in failure, the claimant may still choose
to initiate the litigation process within 3 months from the date
the minutes of the failed reconciliation process are drafted.
Calculation of the compensation amount is based on the value of
the asset as of the date of the claimant's request. A
significant point to be diligently evaluated is that if the court
determines a compensatory sum at the end of the litigation process,
the payment of this amount may be made in several installments but
within a limit of 2% from the yearly capital of the governmental
institution. Due to this 2% payment limitation, claimants who
choose to litigate may collect their compensation via long-term
installments, whereas claimants who opt for reconciliation would
collect compensation at once. In light of this, it appears to be
wiser to seek reconciliation instead of pursuing litigation.
It is noteworthy that the compensation amount subject to the New
Expropriation Law cannot be collected through an execution
proceeding unless the government makes the payment voluntarily.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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