Why is a duty (tax-like levy) penalty imposed by a municipality debated in the commercial court rather than in administrative jurisdiction?

Because the lawsuit is not directed directly against an administrative act, but rather at the annulment of a "Wholesale Market Arbitration Board" decision where one of the parties is a citizen. Since lawsuits cannot be filed against citizens in administrative jurisdiction, the dispute must be resolved in judicial jurisdiction (Commercial Court of First Instance).

How does this decision, reversed in the interest of the law, directly affect the parties to the lawsuit?

Decisions of reversal in the interest of the law do not change the existing legal outcome between the parties to the lawsuit and protect vested rights; however, they constitute a binding precedent for all lower courts in future similar cases.

COURT OF CASSATION RULING11 June 2026

Bad Surprise for Municipalities from the Court of Cassation: Jurisdiction Changed

Official titleDecision of the 4th Civil Chamber of the Court of Cassation

The 4th Civil Chamber of the Court of Cassation reversed the local court decision upon an appeal in the interest of the law, ruling that the judicial venue having jurisdiction over the annulment action against the Wholesale Market Arbitration Board decision regarding the market duty penalty imposed by the municipal executive committee is not administrative jurisdiction, but rather judicial jurisdiction (Commercial Court of First Instance).

Details of the Regulation

In the case underlying the decision, a market duty penalty amounting to 750.00 TL imposed on a citizen by the Bursa Metropolitan Municipality Executive Committee was annulled by the Adana Wholesale Market Arbitration Board. The municipality filed a lawsuit before the Adana 1st Commercial Court of First Instance to annul this decision, claiming that the arbitration board lacked jurisdiction. The local court accepted the lawsuit and annulled the arbitration board's decision on the grounds that the subject matter of the dispute constituted municipal revenue and therefore should be resolved within administrative jurisdiction. Upon this decision, the Ministry of Justice filed an appeal in the interest of the law, stating that the local court's recognition of administrative jurisdiction as competent was contrary to procedure and the law. During its review, the 4th Civil Chamber of the Court of Cassation emphasized that, pursuant to Article 10/5 of Law No. 5957, application to wholesale market arbitration boards is mandatory for disputes below a certain amount, and these decisions can only be challenged before civil courts of first instance. The Chamber also pointed out that, pursuant to the Code of Administrative Procedure No. 2577, lawsuits cannot be filed against natural persons within administrative jurisdiction. It was clearly determined that the venue for resolving an action for the annulment of a wholesale market arbitration board decision filed by a municipality against a natural person is judicial jurisdiction. Accordingly, due to the local court's erroneous reasoning that administrative jurisdiction had competence, the decision was reversed in the interest of the law without affecting the outcome.

REGAS Commentary

This decision is of great importance in terms of clarifying the competent court in commercial disputes such as market duties and similar matters between municipalities and citizens. Citizens and tradesmen will not suffer loss of rights in cases where municipalities direct them to administrative jurisdiction against decisions rendered by wholesale market arbitration boards; they will act knowing that such objections will be resolved in judicial jurisdiction authorities (Civil Courts of First Instance). The decision definitively puts an end to the jurisdictional conflict among branches of the judiciary.

Questions You Might Have

Why is a duty (tax-like levy) penalty imposed by a municipality debated in the commercial court rather than in administrative jurisdiction?: Because the lawsuit is not directed directly against an administrative act, but rather at the annulment of a "Wholesale Market Arbitration Board" decision where one of the parties is a citizen. Since lawsuits cannot be filed against citizens in administrative jurisdiction, the dispute must be resolved in judicial jurisdiction (Commercial Court of First Instance).
How does this decision, reversed in the interest of the law, directly affect the parties to the lawsuit?: Decisions of reversal in the interest of the law do not change the existing legal outcome between the parties to the lawsuit and protect vested rights; however, they constitute a binding precedent for all lower courts in future similar cases.

Key Terms

Hal Hakem Heyeti: A specialized arbitration board tasked with resolving disputes between municipalities and wholesale market users or among themselves in wholesale markets.
Kanun Yararına Bozma: The process whereby final court decisions that are subsequently understood to be unlawful are reviewed by the Court of Cassation and reversed without affecting the final judgment between the parties, with the purpose of guiding future applications.
Adli Yargı: The general branch of the judiciary that resolves disputes arising from private law relations and the application of criminal laws.
İdari Yargı: The branch of the judiciary where lawsuits filed against administrative acts and actions of the state and public institutions are heard.

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