Turkey: Winds Of Change

In 2011, Turkish authorities had been anticipating an exciting year with major elections coming up and with new economic and welfare packages en route. The only remaining factor on the current government's agenda was to win the election, make their mark on Turkish political history, and to continue building on their previous terms with another 4 years of a "Term of Expertise," so to speak.

Great legal changes had been promised, with Europe's largest courthouse being inaugurated in Istanbul, coupled with the new Turkish Commercial Code and Code of Obligations entering into effect. These major overhauls in the legal system were expected to pave the way for a more efficient commercial system with endless opportunities, both for local and foreign investors. While we were bracing ourselves for these legal winds of change to sweep through, yet another gale was blowing the Arab Nations asunder: Tunisia, Egypt, and Libya were all caught up in the storm, and suddenly the prime focus of the world shifted from Iraq to these nations, and while the Arabian Peninsula barely managed to contain itself against the storm, Syria faltered.

What began as an ordinary year turned out to be one of the most historic years of the Millennium. Amidst the storm, however, Turkey continued to shine, with its unprecedented growth rate for the first quarter even surpassing the ferocious Asian Tiger, China. The second-quarter growth for Turkey was slower, but it was still an impressive climb for a country that stood in the middle of the storming world, with its eyes hungrily focused on new business opportunities. When the dust settles, the legal implications of the "Arab Spring" will start to unfold.

Turkey is a major investor in all of the affected countries, especially Libya, with over 10,000 expats fleeing the country, along with their companies and investments. Their return trip is bound to have more than a few bumps in the road, and as the closest "prospering" Muslim country with a brilliantly overhauled legal system, Turkey is ready to set the example of "how things should be done." This year, the Republic of Turkey celebrated her 88th birthday and, during this period, Turkey has been caught in the middle of everything from wars to petroleum shortages – one did not have to look far to see a problem then, and one does not have to look far now.

Looking back on previous years, Turkey has gained much ground regarding legal restructuring, and is still making incredible strides forward. This newsletter takes a look at the numerous changes that are eagerly awaited by some, and not so by others. In the later part of 2011 and 2012, it remains to be seen whether we will be able to effectively complete spin-off transactions, and whether implementation of the United Nations Convention on the International Sale of Goods will be utilized successfully.

We will also be dealing extensively with real estate issues. With the enactment of the "Re-allocation of Land that has Lost Forest Status Law" - in short, "Law 2b," disputes will surely ensue between the public and the government. Along with the Preservation Board's authority being divided into separate cultural and natural asset administrations, the volume of real estate transactions and disputes is bound to increase.

Looking upwards to the sky into the invisible world of the airwaves, this, as well, will no longer be the same with the enactment of the New Broadcasting Law that has given this sector somewhat of a jolt as it has been caught resting on its laurels.

Employer obligations will come with subtle twists as of July 12, 2012 with the enactment of the Code of Obligations. Perhaps all of the solutions to our problems lie with the alternative dispute resolution method - that is, mediation, but the question which begs answering is whether or not we will start using it effectively. Most people are unaware of the existence of mediation, and even less are aware of its implications. Perhaps instead of outbursts of law-enacting we need to slow down, cool down and refresh.

Nevertheless, the new and upcoming changes to the railway system will keep us occupied with the new high speed rail lines being put into service and the next step of privatizations most likely targeting the railways. We anticipate looking forward to a greener future, both concerning the environment and legal matters, perhaps encouraged by the amendments to the Law on the Utilization of Renewable Energy Resources for Electricity Generation.

This past year has also been a "windy" year for Hergüner with the expansion of our Arbitration Team through welcoming 'Of Counsel' Mr. Noyan Göksu, and the invaluable 'Of Counsel' addition of Ms. Esra Biçen to our Corporate Team. Although we were saddened by the departure of our veteran partner, Mrs. Itır Sevim-Çiftci, the winds also carried Mrs. Aslı Budak to the status of partnership with Hergüner Bilgen Özeke, at the start of her 5th year with the fi rm. We take this opportunity to introduce both Mr. Göksu and Ms. Biçen, along with our newest Partner Ms. Aslı Budak, as part of the ever-dynamic and strong Hergüner Team, wishing them great success in the coming years.

Ms. Aslı Budak is a Partner specializing in, Hergüner Bilgen Özeke's General Corporate Practice. Working mostly out of our Ankara working premises she provides legal and business advice given in general corporate matters of project fi nance, and especially within the areas of mergers, acquisitions, joint ventures, securities transactions, and foreign investment. She has also participated in extensive negotiations with governmental and private counterparties.

Mr. Kurtcebe Noyan Göksu is Of Counsel heading the fi rm's arbitration practice. His practice draws on his diverse experience in international arbitration and litigation. He has acted for or advised states and private parties in ad hoc and institutional arbitrations under the ICC, ICSID, LCIA, AAA, Stockholm Chamber of Commerce, GAFTA, FOSFA, and the Hamburg Stock Exchange rules. Among other fi elds, he particularly focuses on disputes involving energy projects, engineering and construction projects, FIDIC contracts, government procurement contracts, JVs and M&As, telecom services, agency and distribution contracts, and cross-border commodity sales.

Ms. Esra Biçen is Of Counsel to the Firm's General Corporate Group and Dispute Resolution Group. She has extensive experience in Turkey and in the United States. Her Turkish practice involves providing advice in mergers and acquisitions, crossborder fi nancings and commercial disputes. In the United States, she practiced complex civil litigation matters with a leading US law fi rm focusing on mass tort actions. Prior to joining Hergüner Bilgen Özeke, she was general counsel to one of the Big Four accountancy fi rms in Turkey. She is certifi ed by the ICC International Court of Arbitration and is licensed in Istanbul and New York.

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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