Overview
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 November 1983.
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 2010.
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.
