By its decision dated 21 March 2025, numbered 2022/2 E. 2025/1 K. (“Decision”), the Grand General Assembly of The Court of Cassation for The Case Law Unification Committee (“Court of Cassation Case Law Unification Committee”) held that a bank's imposition of a direct block on a retirement pension, pursuant to instructions of consent and authorization such as pledge, set-off, or assignment issued in relation to consumer loans, is legally valid. The Decision was published in the Official Gazette dated 17 July 2025 and numbered 32958.
The applicant's counsel requested the unification of conflicting precedents, stating that there were differences in case law and judicial practice among the General Assembly of Civil Chambers of the Court of Cassation, the 3rd Civil Chamber, the 11th Civil Chamber, and the now-abolished 13th and 19th Civil Chambers regarding whether a bank may impose a block on retirement pensions based on consent instructions such as pledge, set-off, or assignment, given in relation to consumer loans.
In essence, the 3rd, 13th (abolished), and 19th (abolished) Civil Chambers rendered decisions in favour of blocking within the scope of such instructions. In contrast, the 11th Civil Chamber rejected the practice of blocking retirement pensions, arguing that the relevant contractual provisions were in circumvention of the statutory exemption from seizure.
The decisions of the General Assembly of Civil Chambers also showed inconsistency over time. While the Assembly accepted blocking in its decision dated 7 March 2018, it rejected this practice in its decisions dated 24 June 2021, 10 February 2022, and 22 February 2022, but later reverted to its original position in favour of blocking in its decision dated 31 January 2024.
These divergent rulings reflected two main legal approaches. The first approach defended the primacy of contractual freedom, asserting that blocking should be permitted as long as enforcement proceedings had not yet commenced. The second approach argued that contractual freedom could be restricted by law in the public interest and that therefore Article 83/a of the Enforcement and Bankruptcy Law No. 2004 (“EBL”) also prohibits blocking. The Grand General Assembly of the Court of Cassation ultimately adopted the first approach in the Decision.
Legal Guarantees, Freedom of Contract, and the Principle of Pacta Sunt Servanda
The foundation of the Decision lies in the classification of consumer loan agreements as private law contracts. In such contracts, the principal governing rule is the freedom of contract. Indeed, consumers who are party to consumer loan agreements are free to enter into the contract, choose their counterparty, determine the type and form of the contract, modify it, or terminate it entirely. This freedom is also constitutionally guaranteed under Article 48 of the Turkish Constitution.
In this context, Article 82 of the EBL regulates assets that are completely exempt from seizure, while Article 83 covers those partially exempt. Furthermore, Article 83/a explicitly provides that agreements which allow for the seizure of such assets in advance shall be considered null and void. Retirement pensions, which are the subject of this Decision, fall under the category of receivables that cannot be seized pursuant to Article 82/1 of the EBL, and, as clearly stated in the law, individuals cannot waive this protection in advance.
However, although the prohibition of the seizure of retirement pensions through compulsory enforcement is clearly established by statutory law, the Grand General Assembly of the Court of Cassation adopted a narrow interpretation of this exception. It concluded that such prohibition cannot be extended to cover disputes that are not yet in the enforcement stage. The Court emphasized that ruling otherwise would violate the principles of legality and pacta sunt servanda (the binding force of contracts). It stated that a block (bloke) is not a compulsory enforcement measure, but rather an authorization concerning the manner of debt performance.
As a result, it was accepted by majority vote that a consumer's instruction to place a block on the retirement pension account held with the lending bank, limited to the amount of the debt under the loan agreement, shall be considered valid.
Points Raised in the Dissenting Opinions
The dissenting justices argued that imposing a block on retirement pensions violates the principles of the social state and the right to social security enshrined in the Constitution. They further stated that the decision renders ineffective the provisions of the EBL concerning exemption from seizure, as well as the prohibitions on attachment and assignment set out under Law No. 5510.
They also emphasized that a block may have more severe consequences than formal enforcement, as it grants the creditor a form of direct control over the funds without providing the debtor with an opportunity to object, and may apply to the entire amount of the pension.
Finally, the dissenters noted that banks already have recourse to collateral mechanisms such as guarantors and mortgages to secure their claims, and that seeking an additional block despite this contradicts the principle of good faith. They argued that even low-value loans could cause undue hardship and therefore expressed disagreement with the majority opinion on the grounds that the decision is inconsistent with the principles of equality, equity, and fairness.
The full text of the decision is available at the following link. (Only available in Turkish)
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