What are the Supreme Court rulings on collusive transactions?

Supreme Court Decisions on Collusive Transactions: 

11th Civil Chamber, Case No. 2024/588 E., Decision No. 2024/8875 K.

"Case Law Text"

COURT: İzmir Regional Court of Appeals, 20th Civil Chamber CASE
NUMBER: 2021/380, Decision Number: 2023/1784
JUDGMENT: Dismissal on the merits; dismissal of the case
FIRST INSTANCE COURT: Aydın 2nd Civil Court (acting as Commercial Court)
CASE NUMBER: 2015/404 E., 2020/258 K.

The Regional Court of Appeal's decision was appealed by the parties' attorneys; after a preliminary examination regarding the appeal requirements and other procedural deficiencies, the appeal petitions were accepted, and after hearing the report prepared by the Examining Judge, the documents in the file were examined and the necessary considerations were made:
DECISION
CASE I
The plaintiff's attorney stated in the lawsuit petition that; even though the plaintiff's name is not listed in the defendant company's share register, the plaintiff owns 7.25% of the company's shares; that the share register is for informational purposes only; that the plaintiff was not invited to the general assembly meeting of the defendant company on February 20, 2015; that the plaintiff learned about the general assembly meeting externally and that their representative was not admitted; that the general assembly was held with individuals who were not shareholders; therefore, the general assembly is void; the decisions taken at the meeting are absolutely null and void; and that the defendant company's aim is to transfer its operating license to a company in which the company's board members are partners, in order to evade auditing collusive transactions Alleging that the company was mismanaged and that the decisions taken at the defendant's 2014 ordinary general assembly meetings on February 20, 2015, were null and void due to the deliberate exclusion of a shareholder from the meeting, the absence of a general assembly meeting or general assembly decision, and the participation of non-shareholders, reserving the right to claim further damages process The petitioner requested that the decisions be declared null and void due to a violation of the principle, as well as the deprivation of the partners' inalienable rights to attend and vote at the meeting; if this is not possible, they requested the annulment of the general assembly decisions that are contrary to the principle of good faith, the law, and the articles of association.

II. ANSWER
The defendant's attorney stated in the answer brief: The plaintiff claims that the plaintiff's shares were sold to a third party through auction, subsequently transferred, and the new shareholder was registered in the share register; that the plaintiff was not a company partner at this stage and was not registered in the share register; that the decision not to send an invitation to the general meeting and not to allow the plaintiff to vote at the general meeting was lawful; that the ordinary general meeting in question was announced in the Trade Registry Gazette, registered mail was sent to all shareholders, the meeting was recorded in minutes, and full participation was ensured; that according to the special auditor's report, the company's assets as of 2014 were stated, and therefore, the allegations that the company was depleted are untrue; that the general meeting was held in accordance with procedure and law; that, without implying acceptance, the holding of the general meeting without the plaintiff's participation could be a reason for annulment, not nullity, under Article 446 of the Turkish Commercial Code No. 6102; and that the other plaintiff holds a 5% share, but according to the effect rule, only 7.25%. The defendant argued that the plaintiff, who may have shares, could not influence the general assembly's decision and requested that the case be dismissed.

III. FIRST INSTANCE COURT DECISION
The First Instance Court determined that the auction, which resulted in the acquisition of the plaintiff's shares through compulsory execution, was annulled by a final court judgment; that the ownership of the shares remains with the plaintiff; that it has been proven that the plaintiff owns 2900 Class B shares, representing 7.25%, as alleged in the plaintiff's petition; that expert reports, both primary and supplementary, have been submitted to the file; that it is seen that the plaintiff, ..., is a shareholder of the defendant company by court order; that the matter of whether the plaintiff has the status of a plaintiff belongs to the Court; that the plaintiff HP Laub participated in the general assembly through a proxy and has the status of a plaintiff; that the shares subject to the auction were registered and announced in the name of the plaintiff ...; that this situation was notified to the company; that the defendant company was aware of the registration and announcement of the court decision regarding ...; that ... was not sent an invitation contrary to Article 414 of Law No. 6102; and that ... was aware of the meeting. It was determined that both plaintiffs would have cast a total of 4900 votes, representing 12.25%, at the general assembly in question, and that 35,100 votes, representing 87.75%, were cast in favor of the general assembly decisions. Therefore, even if the summons for plaintiff ... were not properly conducted, considering the principle of impact, even if the plaintiffs had voted negatively on the decisions, this percentage would not have affected the general assembly decisions, and thus the conditions for annulling the decisions were not met. Furthermore, considering the principle of impact, even if the summons for plaintiff ... were not properly conducted, the plaintiffs' negative votes would not have affected the decisions within the framework of Article 446/B of Law No. 6102. The plaintiffs did not prove in the file that the aforementioned irregularity had an effect on the general assembly decision. Therefore, it was decided that the conditions for annulling the decisions taken at the aforementioned general assembly meeting of the defendant company were not met. The judgment was appealed by the parties' attorneys.

DECISION OF THE 4TH REGIONAL COURT OF APPEALS
The Regional Court of Appeals ruled that there was no procedural or substantive irregularity in the court's factual and legal assessment; that the main and supplementary expert reports were appropriate to the specifics of the case, clear, understandable, suitable for review, sufficient for rendering a judgment, and consistent with the case file; that the total votes of the plaintiffs could not have influenced the decisions taken at the meeting; and therefore, even if the summons was irregular, the decisions taken were valid. For these reasons, the appeals filed by the parties' lawyers were rejected on their merits. The decision was appealed by the parties' lawyers.

V. APPELLATE REVIEW
1. Dispute and Legal Characterization
The lawsuit concerns the request for a ruling that the decisions taken at the defendant company's ordinary general assembly meeting for the year 2014, held on February 20, 2015, are null and void, or, if this is not possible, for their annulment.

2. Relevant Law
1. Article 353, paragraph 1, subparagraph (b), subparagraph 1, Article 369, paragraph 1, and Articles 370 and 371 of the Code of Civil Procedure No. 6100 (Law No. 6100).

Articles 414, 445, 446, and 447 of Law No. 2.6102

3. Assessment
Considering the legal rules that should be applied in respect of the trial conducted and the concrete dispute identified, it is understood that there is no error in the decision given by the First Instance Court, and therefore, it is deemed that the decision of the Regional Court of Appeal to reject the appeal on its merits in accordance with subparagraph (1) of paragraph (b) of the first clause of Article 353 of Law No. 6100 is in accordance with the procedure and the law, and it is necessary to decide to uphold the decision of the Regional Court of Appeal.

VI. CONCLUSION: For the reasons explained above, the appeals of the parties are rejected, and the decision of the Regional Court of Appeal is AFFIRMED in accordance with the first paragraph of Article 370 of Law No. 6100, and in accordance with Article 372 of the same Law.. process It was unanimously decided on December 10, 2024, that the case file be sent to the First Instance Court for further action, a copy of the decision be sent to the Regional Court of Appeal, the fees listed below be refunded to the plaintiffs upon request, and the unpaid appeal fee of 427.60 TL and the appeal application fee of 2,107.80 TL be collected from the defendant who filed the appeal.

(Closed) 17th Civil Chamber, Case No. 2011/12342 E., Decision No. 2012/2395 K.

"Case Law Text"

The judgment of the Civil Court of First Instance dated 17.12.2009 and numbered 2007/202-2009/900, issued by the ... Civil Court of First Instance regarding the lawsuit between the plaintiff ... and the defendants ..., ... Teks. San. and Tic. Ltd. Şti., was overturned by the Court of Appeals' decision dated 9.6.2011 and numbered 2011/3391-2011/5904. The plaintiff's attorney requested a correction of the decision within the prescribed time limit. The file was examined and the necessary considerations were made:

-DECISION-

The plaintiff's attorney alleged that during the enforcement proceedings initiated against the defendant, … Tekstil San. ve Tic. Ltd. Şti., due to its debt to the plaintiff, it was found that the defendant did not possess sufficient attachable assets to cover the debt, but that the defendant sold its immovable properties to the other defendant with the intention of evading creditors, and therefore requested the annulment of these transactions.
The defendants argued for the dismissal of the case.
The decision made by the court collusive The court ruled in favor of the plaintiff, accepting the claim and ordering the annulment of the transaction; the judgment was appealed by the defendant's attorney.
Following the appeal review, it was determined that the case concerns a request for annulment of a transaction filed pursuant to Articles 277 and subsequent articles of the Enforcement and Bankruptcy Law, and that for such cases to be filed, there must be a final enforcement proceeding initiated by the creditor plaintiff against the debtor defendant. Furthermore, Articles 388 and 389 of the Code of Civil Procedure specify the requirements that a court decision must contain, and the duties and rights granted to the parties by the decision must be clearly and explicitly stated in a way that does not create doubt or hesitation. The issuance of a contradictory judgment that does not comply with the aforementioned legal articles and creates hesitation in execution is contrary to procedure and law and necessitates reversal. In the specific case, the creditor plaintiff relied on multiple enforcement proceedings
The court ruled that the judgment should be overturned because the plaintiff filed a lawsuit for the annulment of a transaction, and while some of the enforcement proceedings relied upon did not involve any proceedings against the debtor defendant, the court's decision to accept the lawsuit and annul the transaction without making a distinction, thus creating uncertainty in enforcement. In this case, the court should have clearly stated in the judgment, in accordance with Articles 388 and 389 of the Code of Civil Procedure, which enforcement proceeding the annulment of the transaction relates to, but the judgment was rendered in a way that would create uncertainty in enforcement, which is deemed incorrect. The plaintiff's attorney has now filed a request for correction of the decision.
Considering the amendment petition dated 09/01/2009 and the petition dated 06/02/2009, which are included in the file with the plaintiff's attorney's request for correction of the decision, and the statements of the plaintiff's attorney at the hearing on 17/12/2009, it is understood that the case is related to a request for annulment based on Article 18 of the Turkish Code of Obligations. Therefore, it is not considered correct to overturn the court's decision by stating that the case is related to a request for annulment of the transaction based on Articles 277 et seq. of the Turkish Enforcement and Bankruptcy Law. The phrase "The case concerns a request for annulment of the transaction filed pursuant to Articles 277 and subsequent articles of the Turkish Enforcement and Bankruptcy Law. In order to file such a case, there must be an enforcement proceeding initiated and finalized by the creditor plaintiff against the debtor defendant." in the part of our Chamber's decision that is overturned is deemed incorrect and replaced with "The case concerns the request for annulment of the transaction in question, regulated in Article 18 of the Turkish Code of Obligations." collusive It relates to a request for annulment based on the allegation that it was done. As a rule, third parties, collusive If rights are harmed as a result of such treatment, this legal right, whether unilateral or multilateral, transactions They can argue that it is invalid. Because collusive a legal process Causing harm to third parties constitutes a wrongful act committed against them. However, third parties.. collusive process In order for it to be accepted that their rights have been harmed, they must.. collusive in the process They should have receivables from what is found and collusive process It must have been done to prevent the payment of that debt.
In such cases, third parties who claim to have suffered damages, collusive in the process The fact that they have initiated enforcement proceedings or filed a compensation lawsuit against the person alleged to be involved is not sufficient, by itself, for the acceptance of this lawsuit collusive in the process found to third parties
to determine that they owe money and to avoid paying that debt collusive legal process He must have done it.
The sales that are the subject of the lawsuit collusive If it is proven that this is the case, the plaintiff may also use the assets in question to collect the debt. The plaintiff's aim is to obtain the means to collect the debt as a result of the enforcement proceedings or proceedings he has initiated. However, collusive process Although cancellation and registration of title deeds were requested for this reason, according to the principle that the minority is included in the majority, collusive the process It is clear that the plaintiff requests that the proceedings or follow-up actions not produce any legal effect. In this respect, the provision in Article 283 of the Enforcement and Bankruptcy Law is guiding. However, since this right of the plaintiff will have personal, not real, consequences, collusive the process The local court's judgment should be overturned with a different reasoning in light of the above explanations, by adding the following statement: "If proven, Article 283/1 of the Enforcement and Bankruptcy Law should be applied by analogy, allowing the plaintiff to request the seizure and sale of the properties in question, enabling them to collect their debt without the need for cancellation and registration of the title deed. It is also incorrect that the court did not separately determine in which case the plaintiff's claim exists and in which cases the conditions for cancellation were met.".
CONCLUSION: For the reasons explained above, the request for correction of the decision by the plaintiff's attorney is accepted, and the judgment of our Chamber dated 09.06.2011, numbered 2011/3391 Case 2011/5904 Decision, is REVERSED with a modified reasoning. The advance fee for the correction of the decision shall be returned to the plaintiff who appealed, upon request. This decision was made unanimously on 29.02.2012.

1st Civil Chamber, Case No. 2020/2359 E., Decision No. 2021/1486 K.

"Case Law Text"

COURT: PRIMARY CIVIL COURT
TYPE OF CASE: CANCELLATION AND REGISTRATION OF TITLE DEED

In the case heard between the parties;
The plaintiffs claim that their deceased grandfather, ..., transferred his properties numbered 24 and 1183 to the defendant, ..., on January 15, 2010, and that the defendant is the maternal uncle of the spouse of ..., who is the deceased's son and not a party to the lawsuit the process with the aim of defrauding inheritance and collusive They claimed that the deceased lived with his sons, ... and ..., and that the disputed properties were in the possession of ... and ..., and requested that the title deeds be cancelled and registered in their names in proportion to their inheritance shares, or failing that, that the shares be reduced.
The defendant argued for the dismissal of the case, stating that he purchased the properties for a fee, that there was no family relationship as alleged by the plaintiffs, that the deceased had a retirement pension and other properties, and that he leased the disputed properties to one of the heirs, … …, and received the rent.
The court ruled that the assignment collusive Upon appeal of the decision accepting the case on the grounds that "...the plaintiff's witnesses do not know the third-party defendant and have no firsthand knowledge that the transfer was made with the intention of concealing assets, however, the transfer..." collusive The defendant's witnesses testified that they believed this to be the case the process It has been reported that there was a genuine sale, and although the properties are being used by ... from the heirs of the deceased ..., ... is a co-owner of the property numbered 1183 and the lease agreement they made with the defendant has also been submitted to the file, considering all the facts and evidence together, the transfer is deemed to have taken place collusive not, the process The decision was overturned on the grounds that "while the case should have been dismissed given that it was a genuine sale, the written decision was made based on an error in the assessment of the evidence, which is not considered correct," and as a result of the trial conducted in accordance with the reversal order, the transfer was determined collusive not, the process The case was dismissed on the grounds that a genuine sale had taken place.
The decision was appealed in a timely manner by the plaintiffs' attorney; the report of the Examining Judge ... was read and his opinion was taken into consideration. The file was examined, and the matter was discussed and considered accordingly.
-DECISION-
As indicated in the reversal decision that was complied with process The decision was made as follows: The appeal of the plaintiffs, which was deemed unfounded, is rejected, and the judgment, which is in accordance with the procedure, the law, and the grounds of the reversal decision, is AFFIRMED. The remaining affirmation fee of 4.90 TL, as stated below, shall be collected from the appealing plaintiffs. The decision was made unanimously on March 16, 2021.